The Cape Girardeau Democrat., 1896-08-08
TWO ERAs OF CHEAP MONEY.
Occurred IN the United States Dur
ing war-Their Enormous Cost

= Occurred In the United States Dur
ing war-Their Enormous Cost
The people of the United States have
twice made an experiment in cheap
fiat money, but it is only just to them
to say that in both instances it was
done under the imperious necessities
of war. 1t is we'll at this time, when
there is an organized effort to plunge
the country again into the cheap mon
ey slough of dispair, to turn back and
count the cost of the two experiments
already made in that line by our
Government
When the people of the colonies
were struggling to achieve their indie
pendence they had no resources but
their own strong arms and patriotic
hearts to sustain them in tthe unequal
contest. England studied to make
them poorer by denying them the right
to produce anything that could be
purchased in the mother country, and
when the Revolution began the people
had little money. and the improvised
Government had no basis on which to
found credit for the issue of paper.
AS early as 17I5 the Continental
Congress. looking to the impending
Revolution, issued irredeema BILE notes,
commonly known as continental mon
ey, to the amount of $3,OO0,000. AS
there was no specie to maintain their
credit they rapidly deprecated, and
before the close of the year 1916 men
were subject TO mob violence. to so
cial and political ostracism, and even
to Imprisonment by the military au-
thority, for refusing TO receive this
deprecated currency in the payment
of debts.
Long before the close of the Revo-
luton continental money had so
greatly deprecated that it was next to
valueless, and Gen. Washington is
credited with saying that wagon
load Of money would scarcely buy a
wagon load of provisions. BY 1871 the
whole miserable system was completely
broken down, and Congress was COM
PEELED to provide that all debts due to
or from the Government should be
paid in specie or its equivalent. At
that time the continental currency had
reached S242, 900, 900 or $50 per capita.
SO utterly worthless had the paper
money of the country become that in
l771S single Spanish dollar would
legally pay a debt of S2.400 in the
State OF Virginia.
The continental money was not re-
deemed for the reason that the 3,0OO.-
600 of people of the colonies were un-
able to pay in full to the holders of
the money. who had received it at a
mere fraction of its face value, and
for which the GovernmerS had received
but IA small fraction of value. The
cheap fat money issued JS aid the in
dependence of the colonies was pard-
5onable on the principle of absolute
necessity. During our civil war the
people OF this country we're unpre-
pared for the enormous expenditure
neceSSitated by a war of the greatest
magnitude The entire revenues of
the Government in 1859 were only
;s!sOIt SO NM. 900 per year and for
s.=xerai wears OF the war itS, cost MAS
fully double that amount per month. |
The entirs money of the country in
lS-sp was 42,OO0, 900. 3:i-O09- -o0s of |
which were gold and silver and the |
remainder notes issued by State banks. |
In IS6+, when the war was at the /
highest point of expenditure, We had |
nearly S.NO,0O0,O0O of igredeemable
paper In circulation, and gold that |
year averaged a premium of tOa> clearly |
demonstrating that our Issue of ire
deemabie money, although legal tender
fo: the payment of debts, WAS reduced !
in its purchasing value sEer 80 per |
cent. In other words, the man xho |
earned Al in 1864 could purchase less |
than SOC worth of the neeessaries of !
life because OF the depreciation Of the
caarency-
The aggregate cost of this depneeia-
ton OF our currency during our civil |
war has been carefully estimated from |
official figures. and the, total loss to |
the Government of the United States |
by reason of depreciated morey was
over 81, ,100, 900, 900. In other words, |
the people of the United States paid |
81 .O0. .Gl9,O 600 as the price of the enforc-
ed cheap money experiment necessitat-
ed by the war for the maintenance of |
the Union.
Notwithstanding the people of the
country were left with 4 funded debt of
over $1,000, 100000 payable in gold,
after having submitted to enormous
taxation for many years they stood up
resolutely for the maintenance of the
national credit. The greenback craze
then had its tidal wave like the silver
craze of to-day 1t partially swept
the Democratic National Convention
of i>to ,,~ay from its honest financial
but i!.:.: body, in declaring
fD,. u ,F l.lt- in |