The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-01-13
CONSTITUTIONAL MONEY AND LEGAL


A correspondent OF the Journal asks
whether we can have IA permanent monetary
system without amending the Constitution.
and implies that we cannot. He argues
that as the Constitution practically recog-
nized gold and silver as the only legal ten
der and standard of value, and as Congress
has, with the approval of the Supreme
Court. made greenbacks legal tender. we
have broken away from the Constitution
and are on an open and limitless sea where
Congress may make anything legal tender.
IL we have no constitutional standard of
value our correspondent wants TO know
what the consequences will be. He says:
Plainly. our monetary system will become
the football of co~ntending partisans; one
Congress may make gold the standard of
value, and the next may discard gold and
substitute silver, and Il succeeding Con-
gress may demonetiZe both gold and silver
and issue greenbackS ad libitum, and make
them the only standard of value. Are the
moneyed men of the countryside bondhold-
ers. bankers and money lenders-ready for
such Il monetary system as this? Are they
ready to abandon MIR. Websters theory
and throw away a constitutional shield
they may never recover? Are they ready
to put into the hands of Congress the pow
er to provide for the payment of all debts
with deprecated paper money? Are they
ready TO pull down the constitutional
breaStworkS which now protect them from
all serious harm, and to fight an army.
twenty times their own number in an open
field? If so, l can only say they would
make poor generals.
This seems to cover an ambushed argu-
ment in favor of the remonetization of
silver. the inference being that the So
called demonstration of silver has de-
stroyed the constitutional standard and
loft HS without 1nV haGiS Tho rpDlV
to this is easy. Silver has not been demone-
tized. All that has been done is to stop
the free coinage of silver. The legal-tender
quality has not been removed from a single
dollar. 1t follows that there has been no
abolition of the constitutional standard. 1t
is the same that ii ever was. As a matter
of fact, the Constitution did not establish
any standard at all and did not make gold
and silver legal tender. 1t simply de-
clared that no State should max anything
but gold and silver coin legal tender. After
the Constitution was adopted it took an
act of Congress to make them legal tender.
The Constitution does not authorize and
never contemplated the issuing of notes
by Congress and making them legal tender,
departed from sound financial methods.
The fact might be justified as a war meas
ure. but never on financial grounds. Yet
while it was n departure from the constitu-
tional idea of money it did not abolish the
so-called constitutional standard. and the
country is not at sea on that phase of the
question. 1t is still competent for Congress
to establish the free coinage of silver if it
sees fit to do so. and it is still unconstitu-
tional for any State to make anything but
gold and silver coin legal tender. The pro-
visions of the Constitution remain I'M
changed. though the maintenance in cir
c~ulation of a large volume of legal-tender
notes is a plain violation of it's spirit. The
retirement of all outstanding government
legal-tender notes would leave gold and
silver the MY legal-tender money in cir
culation, of which we have about $3.50, 900, 900
of the former and $3.50, 600, 600 of the latter,
full legal tender. There can be no doubt
that one of the weakest features of our
present monetary system and a real dam
ger point is the outstanding mass of gov
eminent paper money. of which Il large
proportion is legal tender and must at all
hazards be maintained at par with gold.
Legal tender is not a necessary quality of
money. and is only enacted for the con-
venience of the public or to give artificial
credit and forced circulation TO paper
money. The gold coins of the United
States would nave the same value and
would circulate as freely if they were de-
prived Of the legal-tender quality altogeth-
er. Our legal-tender notes are the only
ones in the world issued directly by a gov
eminent or legislative body. Great Brit
ain, France and Germany have banks of
issue under government control. but the
idea would not be tolerated i'm those coun-
tries of having legal-tender paper money
issued by a parliamentary body. The first
step towards restoring IA constitutional
standard Of money is the retirement of
legal-tender notes. This would contribute
TO the safety of our monetary system and
add to the dignity of gold and silver. No
constitutional amendment would be neces-
sary. because the act itself would be a re-
turn to constitutional principles and meth
obs