The representative. [volume] (St. Paul, Minn.) 1893-1901, 1897-03-17
BONDS AND GOLD.
How Democratic Gold Bug Paper
Lies-Quadrupling Debts by
Vicious Laws.
Few Cole Bug Facts Knocked Out by the
Truth as Known by All Who Read
History Carefully.
milwaukee Adyance,1

milwaukee Advanced
One OF our subscribers, Mr.. VIM. Ul-
rich, Of Buffalo county, Wisconsin, sub
scribed for the ST. Paul Globe, but the
trash it scattered was too much for
him. So he wrote communication
to the paper giving his views as fol.
lows:
To the editor of the Globe: Will you
please answer a few questions? l see
you are liberal in answering questions
and 1T should be so. as only through
the press the people are able to learn
something.
During the last campaign the great
fight was whether our national bonds
and all legal obligations should be
paid in gold or it's equivalent. The
gold men won. So far, all we'll and
good; whether to the advan tage Of the
people or not the future will learn.
1t was told that all the coin the gov
ernment received during the last civil
war was only $3.50, 900, 600 and the war
debt was nearly $4,000, 100000. Now,
1T naturally appears that this enorm-
Gus debt was made with paper money,
and should be paid with the same kind
that those bonds were bought with.
If l am wrong, l wish you would ex-
plain. VIM. Ulrich.
To this the Globe replies:
''The question raised by our cores.
pondent is one that puzzles a great
many people who are not fam liar ith
the financial conditions of the period
during which the national debt was
created. The government, during the
war, issued, from time to time, green.
backs, called United States notes,
which it made legal tender at their
face value. 1t also borrowed money
to carry on the war for the union by
selling its bonds. No matter what
prices were paid, all financial transac-
tions then. as now. were conducted on
the basis Of the gold standard. Thus,
although the greenback was nominal
ly worth its face. it fuctuated up and
down, and its actual value as currencg
was measured by the premium on gold.
So, during the year 1864, the average
value Of the paper dollar was 40 cents.
The government at the same time, dis
posed of its bonds for cash on the gold
basis, and it mattered nothing whe tn
er gold or greenbacks were paid for
them, because they were sold iE the
open market, and it was precisely the
same thing whether they were paid
for with one dollar in gold or two dol
lars in green backs, when gold was sell
ing on the exchange at two to one
with paper money. The question is
not what was received In fair and
open transaction, to which both par
ties agreed, but what ought to be paid,
If a man holds mortgage on good
property for $1,000, and the stress of
his circumstances is such that, after
Offering it openly to all purchasers. he
can get only $500 in cash, that is his
misfortune and closes the transaction
as far as he is concerned. II the mort
gagor afterward pays up the entire
principal of 81, 900, it does not vitiate
the sale Of the paper.
''The real point to be considered in
this case, however, is that no bonds
whatever are now outstanding which
were issued during the war period.
Every dollar of the bonded debt of the
United States today represents bonds
issued either in exchange for those
earlier ones, under the authority of va
rious refunding acts, or bonds actu-
ally sold and paid for in gold, as those
issued during Mr.. Cleveland's admin
istration. All these transactions are
SGFlCCly Ou Cut SOlu UdSlS. liz JULIUS
are papable by their terms in coin of
the United States. The United States
has repeatedly pledged itself to main
tain all its currency on the level of
the gold dollar. Every holder of a
government obligation today, there
fore, is man who gave either gold or
it's exact equivalet in the shape Of an
other bond, for the evidence Of debt
that he holds. There is no such thing
as "intrinsic" value. Purchasing pow
er is what we understand our cores
pondent to mean, and to keep this
stable it is necessary that the gold
standard be maintained"
The debts of the United States at
the close of the war were 81, ,273, 100000
ceive more than $s7, 10000 all told in
gold and silver The reports of the
secretaries of the treasury show this
plainly. No doubt large part of this
was paid in three, four and five times.
but the grand total was as stated.
To make the assertion under these
circums tances, that the bonds were
sold for cash on gold basis is one
that only an impudent gold bug of
the Globe school would dare to make.
Take it's own figure that the aver
age value" (price in gold it means)
was only 40 cents during 1864. For
convenience let us give them the odd
cent and say SO cents. A banker hav-
ing $4,000 in coin buys $1,000 III
greenbacks (purposely deprecated for
that purpose according to John Sher-
mans authority and exchanges gov
ernment bonds, payable interest in
coin, and principal in whatever the
law says is money.