The representative. [volume] (St. Paul, Minn.) 1893-1901, 1896-07-22
$1.OO A Year, in Advance.

able proportion to the annual revenues.
such money will be precisely as good az
the issuing government; no better, no
worse.
To show that this broad and sound
foundation for money ia not new, call
attention to the testimony of Mr.. E. q.
| Spaulding, chairman Of the sub-commit-
tee Of ways and means in the house Of
representatives in 1862. On Sept 80, 1865,
in letter to J. U. Orvis, president Ninth
National bank, New York, Mr. Spaul-
ding, arguing against the necessity Of
coin redemption of bank notes, said:
Every time hundred-dolaar bill passes
from one person to another, 1t is a prac-
tical redemption of it by the person who
takes it. Every time merchant at Chi
cago pays to farmer five hundred dol
lars in national currency for carload Of
wheat, the farmer by the operation re-
deems such national currency, not in
greenbacks, nor In gold, but in commod-
lty better than either, namely, wheat, q
staple article, useful to ALL So every
merchant in New York that sells bale
Of cotton goods and receives his pay for
1t In currency, redeems such currency.
not in the way that banks redeem 1t, but
IN cotton goods, which is far better, be-
cause 1t performs the true functions Of
money by facilitating the legitimate sale
OF commodities. So every time that mer-
chant or manufacturer pays his internal
revenue tax to the United States collector
In national currency, the government re-
deems such currency by receiving and
discharging such tax. So every mechanic
or laborer, that receives national curren-
cy for his services redeems such currency
by the labor performed. So 1T will be
seen that just SO long as the national cur
rency Is practically redeemed every day
IN Its passage from hand to hand in the
payment OF commodities and services,
and in the ramified operations Of trade
and business, both with the government
and the people, whose operations 1t great
ly facilitates, there is not the slightest
necessity for resorting to the expensive
and risky operation Of asserting and
sending it home for redemption. -Spaul-
dings History, appendix, page 10.
That Is the safe and broad redemption
advocated by the present paper money
party in America. Without such redemp-
tion there can be no good or safe money.
With 1t no other redemption 10 necessary.
And yet, Mr.. c., understand, calls q
money so redeemed, ''unredeemahle.
That is the style and languate ii the
money changers, because such redemp-
tion does not create and sustain special
market for their gold.
As to fiat, there can be no good money
without it. Gold must have it or it be-
comes very cheap commodity. To illus-
trate this important point let us take a
noted historic example:
Ancient Peru was rich in gold and
silver, but the people did not use them an
money. They were used for ornamental
ton about the temples Of worship and In
the palaces and public buildings. but not
as money. Now the question arises what
is the value of gold, for example, In a
country where there is no law creating
monetary demand for it? On certain
occasion in Peru, there was quantity Of
gold collected in Cuzco, the capital of the
| country, for shipment to Spain. In q
small way 1t was bought, sold and swap
ped as commodity for other commodi-
ties, and thus its value was ascertained,
as compared with the values Of other
property.
In Prescott's contest of Peru (vOl. 1. o.
51O), 1t Is stated that gold bullion Of the
weight OF $116 in coin was the price Of
quire of paper; gold bullion Of the
weight of $500 was the price of bottle of
wine gold bullion of the weight of $3.50
was the price of a sword: gold bullion Of
the weight of 81 ,160 was the price of a
cloak gold bullion Of the weight Of 1894
was the price of pair of shoes and gold
bullion of the weight of $4,000 was the
price of good horse.
So then, when left to itself as a mere
commodity, gold in Peru possessed very
little commercial value. But when ship
ped to Europe where the laws had created
a monetary demand for it, the commercial
value was very great"
Mr. n CO.. oil fhA int
have abandoned the experiment Of using
as legal tender currency demand notes
on which the government is the promisor
| and have substituted metal as the only
legal. tender, their paper currency issu-
ing from the banks
Technically, there is some truth In that
statement Practically there Is none.
Take the English currency as the first ex-
ample. The notes are issued by the bank,
but the government guarantees their re-
demption to the amount of thirty million
pounds sterling ($150,0O ,O00). The notes
to that amount rest on government stocks
and not on gold. Beyond that amount
the notes rest on gold. And then, the gov
ernment makes them legal tender for
gold bullion, and for almost every pur-
pose except in payments to bondholders
and on debts owed by the bank. Take
| 0Ws CA0S AC60A SOAuCl 4udHty auU tho
British bank notes would not be safe
money.
The case Of the French currency Is sim
pier than the English. It is so nearly n
full legal tender for all purposes. that
swapping it for coin is never thought al.
And the French finances rank among
the safest and soundest in the world.
On several occasions the government
bank Of France has been called upon 4t0
save the Bank Of England from bank.
ruptcy during the past fifty years.
The currency OF Austria is q stiu pIain-
er case. A large share Of 1T Is issued 1,v
direct by the government. It is by nv
receivable in the government revenues
and there is no provision for redemrtion
OF that class of notes in coin.
In the case Of our own bank currencv
the government prints the notes and s..
mains responsible as the ultimate ssnrorn.
isor" for their redemption, and adds q
special legal tender for certain purpost.s.
Dut permits to the banks the entire prof-
Its OF loaning the circulation to the neo.
pie. This is the special currency which
Mr.. G. favors. All the good and safe fes1-'
uree II possesses are derived from IN
government. Then why should not 10
government and the people. enjoy IL
| profits Of the issue? 8
Continued Next week,