The Providence news. (Providence [R.I.]) 1891-1906, 1896-07-18
THE MAKING" OF MONEY.

Government does not "make" money
does net manufacture money.
1ne government furnishes the people
with what IL commonly called "money,"
but first the people have to furnish the
government with the raw material Of
money.
II the government IL rich IL is because
the people are well-to-do. When the
people arc poor the government
is poor. Wien the government
is poor II can borrow money to
keep along with. The credit OF the gov
ernment is good. 1t is good amply be-
cause 1t has the resources OF the country,
the ability of the people to produce from
those resources, the known enterprise OF
the people to sccompli ish such produc-
tion.
In war times tho Confederate govern
ment and the Union government both
"made' money. They "made" II out OF
paper. IT was accepted at value cor
responding with the confidence OF those
who exchanged com. .nodities for IL that
the respective governments, that is, the
people OF the two sections, would be able
to redeem the paper. "War prices" pre-
vailed North and South. That is, the
paper money was always accepted at its
printed face value, but corresponding
TO the value the seller OF goods placed
upon 1t, 1t took greater or fewer
number OF dollars TO buy the goods.
Fortunes were made in icipating
fluctuations in this confidence. Goods that
were sold for piece of paper Ia belled dol
lar on one day could, " held onto for
few days. be sold for two such pieces of
stamped paper. With faith that the gov
eminent would eventually be able to re-
deem the paper ut It's printed ..'promise
to pay" value the man who held ON to
the goods and only let them go when the
paper money was at its lowest accepted
valuation made speculative profit OF
the difference. 1t was far more than the
profit on the sale OF the goods. AS the
war progressed and the Confederacy was
crowded toward its "last ditch" ii took
more and more OF the Confederate money
and less and less OF the Federal money
TO buy goods. OF course the falling off
of production had something to do with
the increase in prices" But most OF
that increase was due to the uncertainty
as to whether The governments would
ever be able to pay the dollars that they
promised to pay on the paper money that
they "made."
These debts OF the Confederacy have
never been paid ana never will be. The
debts OF the United States have. not been
all paid but the "war prices" have long
ago ceased to prevail, the government
paper is exohangeable dollar for dollar in
government gold without premium
and the "money'' that the government
made" during the war became "good
money" just as soon as the government
was secured by the action OF the people
in end ing the war and turning TO the
pursuits Of peaceful industry.
The government, barring government
lands, buildings, and minor possessions
has no property. II has no fixed income
bearing stocks and securities. 1t is not
bloated bondholdsr or a capitalist with
its pockets full OF ready cash. 1t does
not buy goods and sell them. 1t does not
do a banking or brokerage business
hand that it loans out at interest. II
does not secure income from property as
do states and towns. It's income is al
most all derived from assessment OF taxes
on imports and certain "internal reve-
nue." taxes, the manufacture OF liquor for
instance. IL It cannot secure O su iiicient
revenue to pay its expenses OF say half
billion dollars n year, ii cannot pay
them by manufacturing moLey. 1t has
TO borrow money just as the citizen does
who doesn't do business enough to
"make" IL.
The old-time Greenbackers assumed That
the government could print all the paper
dollars 1t chose and put them in circula-
tion. In later years we have heard pro-
position advanced that the government
could print all the money that an esti-
mate OF gold undug in tho hills represent
ed That Wns rather morn sane than tho