The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1896-04-17
PAPER MONEY.
w. d. Willard Reads an Able Paper
Thereon to the S. S. Club.
Briefly Traces its History and Points
Out its Dangers.

/
members at the meeting of the Social
Science club Tuesday evening and the
theme discussed was paper money.
Mr. w. d. Willard read carefully
prepared paper and covered the SUBJ
| ject as extensively as possible in the
short time allowed him. The paper
is too extended for reproduction en-
| tire, so we give few Of the most i'm
| portant features.
He said that of all the definitions
of money that he had seen none was
more satisfactory than that of Francis
A. Walker, who said, "Money is what
money does" The functions of
| money are, first as a medium of eX-
| change; second, measure or common
denomination of value; third, to serve
as standard of deferred payments.
The aggregate funded debts of ma
tions, states and cities in these days,
made this last function Of exceeding
| Importance, and just at present this
function of money is under serious
| consideration in our own country.
mot all kinds of money perform
these functions with equal excellence.
There are grades and quality in it
as in other things" Good money is
that which passes freely from hand to
hand in the final discharge. of debts
and full payment of services, and
| which every man will accept freely.
And that is the best money which
fluctuates the least in value through
out the year.
He then turned to the cOnSidera-
tiOn of paper money, showing that it
was no new thing, but was known in
China as early as the 9th century.
All nations have tried it and America
has not been behind in the matter of
experiment and has at times fairly
deluged herself with it. There are
two kinds of paper mOney-gOvern-
ment notes, and bank notes. The
former is some times legal tender for
all debts, public and private, and
some times for government dues
only. Paper money may also be class
ed as redeemable and irredeemable.
That paper money, of no valve in it,
self, will circulate and fulfill the
functions of money is one of the
strange phenomena of society, and
has led many men to suggest that a
piece of paper with government
stamp" upon it is the only kind of
money we need. But the limits of
paper money are extremely narrow.
He called attention to two laws of
money. One that the supply of value
money in country is regulated by
the general law of supply and de-
mand. The other, the s0-called
Ores ham law, that the poorer money
will always drive the better money
out of circulation. He did not want
to be understood by this that a coun-
try using silver or paper money will
necessarily have no gold, but be on a
silver or paper basis. But that the
trade of country will use just so
| much money and no more, and be
healthy-and any increase of supply
will cause rise of prices, importation
Of goods and expectation of money
value, not as money but as the cheap
est commodity. There ase two reasons
for the issue of paper money. First,
it's convenience, second, it's cheapness.
Some profess that the issue of paper
adds to the capital and wealth of the
country. 1t does SO in but one way,
in that it sets free large amount of
specie that can be used for other pur-
poses. He then followed the ex-
perience of France, England, and
other countries showing the good and
evils that had befallen them from
their experiments with paper money
and then took up the history of paper
money in this country. No country,
he said, has had such experience with
paper as the United States. He gave
brief account of the colonial expert
ence with it. These early issues, he
said, did not pretend to be immedi-
ately convertible into coin, but rested
their values on one of three things
mortgage security of land; pledge of
future taxes, and pledge of the gov
eminent to receive the bills in pay
ment of taxes. But the result of
these early issues were all the same
imitation, and depreciation and de-
mand for further issues because of
scarcity of funds. So the states were
thoroughly demoralized when the re-
! volution occurred land the continental
congress with no power of taxation,
was forced to issue more notes. The
total issue of paper money by congress
and the states reached S451, 900, 900.
AT the close of 1880 the issues of con-
gresS were worth IS to l of coin. and
! year later 1000 to l, sand it expired
Wi hO1f NJ t.