The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1896-04-17

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money. This experience led to the
prohibiting of states by the constitu-
tion to emit bills of credit or make
anything but gold and silver legal
tender. And while the United
States is not prohibited, neither is it
authorized to emit bills of credit, and
he did not believe it was the inten-
tion that congress should have that
power, and this view was confirmed
| by the debates Of the time. He then
followed to considerable extent the
history Of bank issues through the
earlier years of the republic and the
troubles which befell the people there
from when man needed bank note
detectOr for use in all his transac-
tions, and was then not sure that
his money would be good over night.
Such was the condition of the coun-
| try up to the war of the rebellion. He
referred briefly to the the troubles
which confronted the government
during the war to get money to carry
on the struggle, and briefly traced the
history of the issues of greenbacks
and the establishment of the national
banking system. The close of the
war found the country with a paper
| circulation of S720 million worth 70
cents on the dollar. Over $50 mil
lions Of this circulation consisted of
| greenbacks and fractional currency.
The policy of the treasury was the
contraction of this paper circulation
and in 1868 the greenbacks had been
brought down to 1856 million, when
congress stopped further contraction.
were about 300 million and the gold
value of currency about 20 cents. Its
value continually grew, SO that when
the date for resumption of specie pay
ments in 1879 came, confidence was
entirely restored greenbacks were at
par, and none were presented for re-
demption. He looked upon the action
Of the government in maintaining the
greenback circulation, as unWiSe, and
referred to the experience of the last
| three years, -and the trouble the gov
eminent has had to maintain the
gold reserve. He called attention to
four facts. That on 100 millions, or
less, of gold is resting for redemption
total of 800 millions of greenbacks,
silver certificates, treasury notes, etc.
That the greenbacks are nothing
| more than pump, to pump gold out
of the treasury as fast as it can be got
ten into into it. That the govern
ment has at present no means of in
creasing it's stock of gold except by
purchase, as scarcely none at all is
paid in for duties. That for several
years we have had an over issue of
money, the greater part of which was
not full value money.
The remainder of his paper was de-
voted to the discussion of various
plans for the issue of currency that
would take the place of our present
composite system, referring among
others. to the Canadian banking sys-
TEN, which while answering admir-
ably the needs of Canada, he did not
think would be equal to cope with
the speculative spirit of the people on
this side of the border. He also re-
ferred to the latest plan which is now
before the house committee in con-
gress, and in which he saw much to
endorse. In closing he said:
| In committing these practical
points to you for discussion want to
repeat certain general propositions
with regard to mixed currency. l
mean currency behind every dollar
of whose paper is not dollar of
metal.
L. That paper issues as long as
they are within the; limit of safety
do not increase the circulating money
of community.
2. That cheap money in the sense
of an abundance of paper, or of silver,
means dangerous money.
3. That paper issues always tend
toward excess, such is the competi-
tion both between issuers and be-
tween borrowers.
4. That excess of money brings
higher prices and a consequent eX-
portation of specie
5. That the natural result out of
this export of specie is that contrac-
tion, the longer delayed, the more
disastrous.
6. That this contraction is intensi-
fed by the proportion of paper to
coin reserve. If the reserve is 25 per
cent S4.O0 of paper must be withdrawn
from circulation for every dollar of
coin exported.
I. That this necessary and intense
fluctation is very injurious to coun-
try, but especially disastrous to its