The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1896-07-03

10 IL, II dollars worth OF silver could be
placed in dollar" You must know that 1t
IL not the amount Of silver In a coin that gives
1t It's value, for the trade dollar, which con-
tained four hundred and twenty grains Of sill
ver was worth but eighty cents, when the
standard silver dollar containing four hundred
and twelve and one-half grains was
tender, but 1t did make the standard
silver dollar legal tender. So there is posi-
tive evidence that It is the stamp on the coin
and the law back of 1t, making 1t legal ten
william Kellogg.
Valley Greek. June 80. 1896.
Like a great many others who send
communications to the newspapers,
Mr.. Kellogg would have done better to
study carefully the article in the
Globe upon which he comments be-
fore venturing remarks that are so
wide of their purpose. The Globe did
not say that the treasury notes issued
under the act of 1890 are to be redeem
ed in bullion. 1t said, as Mr. Kellogg
himself quotes: 1.-THE bullion is kept as
security for their REDEMPTION" In
other words, if Mr.. Kellogg should
buy thousand bushels Of wheat and
give his note for 1t payable In ninety
days, it is to be supposed that he
would either keep the wheat as Sc
curity for the payment Of the note or
dispose Of it for money or some other
commodity which also should be kept
as pledge for the redemption of his
promise. That Is to say, he would
have no moral right to sell the wheat
and spend the proceeds for some other
purpose, unless he knew how his note
was to be paid when it became due.
This is precisely the case with the
notes issued under the Sherman act,
all of which are mere promises to pay,
for whose redemption particular pro-
vision must be made. These notes are
redeemable under the law in either
gold or silver, and have been redeem
ed in either according to the demand
of the person presenting them. This
policy was imposed absolutely upon
the treasury by the act repeating the
Sherman law, which declared it to be
the policy of the United States to
maintain all it's different forms of
money at a parity. If this Is to be
done, no discrimination must be made:
the man who asks for silver dol
lars, must receive silver dollars,
and he who wants gold dollars receive
gold dollars, or else one will go to a
premium at the expense of a CORES
ponding depreciation in the other.
AS to the so-called seignorage, we
will explain again for Mr.. KeIlogg's
benefit the difference which it seems
SO difficult for many people to master
Between actual value and credit. The
silver dollar and the paper dollar of
the United States pass at par and are
received Unfortunately solely be-
cause the faith of the government has
been pledged to redeem all of them in
the best money of the market, and the
people have faith that this pledge will
be kept. AS long as this confidence is
not strained the credit of the govern
ment will float a certain amount of
credit money without depreciation.
The volume of such money is not, how
ever, capable Of expansion Indefinite
iy. Let us illustrate. We do not
know what Mr.. Kellogg's circum
stances are, but we will assume that
his promissory note for 500, payable i
thirty days after date, would pass
readily in the community in which he
lives, and be accepted just the same as
hundred gold dollars or silver dol
lars or horse worth 500. or anv
other commodity Of equal value. This
is not because Mr.. Kellogg's penman-
ship and sign manual possess some
mysterious power which can create
value out of nothing, but because his
neighbors and friends know him to
be man of means and honor such
that his promise will be kept. At the
same time, we are probably making no
disparaging reflection upon Mr.. KEEL
logg when we say that IL he were to
issue similar promissory notes to
total of $1,000. 100000 and scatter them
throughout the community he would
find that they would not be accented
at par or for any other sum. And
somewhere between 500 and 81 ,0o0. ooo.
coo he would strike a point where his
credit was exhausted, and where no
further promises to pay would be ac-
cepted until he had shown both will
lingness and ability to discharge
those alredy outstanding.
This Is precisely the case with the
government It's credit vastly exceeds
that Of the richest Individual in it. but
1t has it's limitations just the same.
1t Is only a difference Of degree. Sew
eral hundred million dollars OF cur.
rency Of one kind and another have
been taken by the people regardless
of the material Of which it Is compos-
ed, not because the government stamp
has worked a miraculous metamor-
phosis, but because the people believe
that it can and will take I'D this fat
money and give actual value for Ii
instead on demand. If the gov
eminent overdoes the business,
however, and goes on forever is
suing currency which is not in itself
worth in the market its face value.
then 1t must sometime reach the limit.
when the faith of the people In the re-
demption Of that money : begins to
waver, and they will decline to ac-
cept further issues unless at a dis
count
This point we have finally reached.
By fatal mistake of legislation, the