Marietta daily leader. (Marietta, Ohio) 1895-1906, 1897-09-18

| pItStlldllOl VI OllC lIcutN QutSlIUIl Is
made BY Charles II. Swan, Jr., in little
book entitled Monetary Problems and
| Reforms" 1t is the last number OF
| Putnam's" Questions of the Day Series
The author believes that legal tender
laws are a great curse and are respon-
sible for most of our monetary evils.
He makes good case. His arguments
are well calculated to upset not only
sixteen to one ideas, but all belief in
favor of fiat or cheap money. This be-
| ing the heart of his discussion, we quote
the following extracts from the chap
ters on Fiat Money and Legal Tender:
From an economic point of view
there can be no difference between an
obligation to deliver what happens to
be a medium of exchange and an oblga-
| tion otdeliver some other article. In
either event the selection has been
made by the agreement of the parties,
and the obligation is as to certain
quantity of a certain thing. 1t is thus
that we may say that in economic con-
temptation any obligation to deliver
specified goods is a debt. Itwould seem
that the obligation made by the agree
ment of the parties should be adhered
only by the agreement of the parties.
1t would seem further that the oblga-
tion should not be altered indirectly by
changing the definition of terms used
in the agreement. Nor should the fact
that the law looks on a debt for money
in different light from the way in
which it looks on debt for other goods
make any difference as to impairing the
obligation.
ut is nevertheless true that no des.
potic power of government in disre gard
of property has been oftener or more
universally employed than this power
of tampering with contracts, and that
too, not only by governments, profess
sedly despotic, but even by those claim
ing to be actuated by the principles of
justice and liberty.
These, then, are the three ways of
debasing the standard coin OF a country
either TO reduce the weight of the
piece and make the reduced piece a
Legal tender for the old piece, or to coin
the same pieces as before, but decree
that each shall be legal tender on en-
isting contracts for more than it's old
name implied. or to coin pieces of the
same weight as before. but of reduced
tineness and TO make them legal ten
der with the old However, it is not at
all unusual to find that when one of
these methods is employed in scheme
OF debasement the others are also as
sociated with it. DebasemeEt. properly
speaking, refers simply to applying the
old name to lesser amount of metal.
and in order to effect an impairng Of
contract rights must be accompanied
by legal tender law. for otherwise
creditors would not receive the smaller
coins for more than their market value
as stamped metal. but the act of Gebase-
ment is so universally poisoned with
this legal tender law that the term de-
basement is generally used 10 cover
both operations.
The method above described for
tampering with the money of a country
namely, to debasc the coins in weight, |
fineness or nomenclature and apply le- !
gu. tender laws-is so barefaccd and |
self-eviGent a fraud that il is almost |!
universally denounced, and il is of late |
years seldom used by civilized govern
ment. There is. however. another meth |
cd by which the same nefarious end |
can be attained under the plausible pre- /
text of regulating the value of money |
as if money needed any other regua-
tion than to be let alone to find its own |
market ldvel This idea of regulating |
the value of money has its enthusiastic |
advocates in all countries of the present |
day and has permeated 10 individuals |
in all classes of society. 1t is based on |
the idea that the order of the govern |
ment, the fiat of law. gives money its |
basic value. 1t is therefore called the |
doctrine of fiatism, and money that is |
tainted with this idea is called fiat |
money.
"A legal tender law. however.
which makes less an equivalent for
more takes no account of any mans
ability to fulfill his contracts. but with
one fell swoop strikes horizontal re-
duction of debts for all alike and is in
effect a universe! bankrupt act. When
it is said. as sometimes is, that a legal
tender law is necessary to avoid bank
ruptcy. such law is in reality rot an
escape from bankruptcy, but the most
emphatic confession of bankruptcy.
Among the wrongs done in liberty's |
name legal tender must hold a promi. |
nent place. 1t seems to be almost a
mania to rush to legal tender in any
public crisis. At the very time when
business confidence is most needed the
most deadly blow is struck at that con-
fidence.
Again. the lawmakers may believe
that there is not enough of one metal
to supply the needs of trade and so may
think it necessary to make two metals |
legal tender at a fixed ratio. If the gov
ernment simply stamps coins of both
metals. that is perfectly harmless pro-
ceeding, and business men can use
either or both, as they find convenient,
but if they do not find both convenient
that is the very best reason in the world |
why the undesired metal should not be
forced upon them. The desire. then, to
m rndIpa "a Dayu n