The morning news. [volume] (Savannah, Ga.) 1887-1900, 1898-05-29
A Bit of Financial History.


Senator Lindsay, one Of the abiest Dem
ocrats in Congress. in a speech in the
Senate a few days ago showed quite con-
clusively that the Democrats in Congress,
in their efforts to please the Populists,
have drifted a long way from the position
once occupied by the Democratic party on
financial questions. Their proposition is
that instead of issuing bonds for war pur-
poses there shall be issued $l50,Oo0000 of
greenbacks and $42,0OO.OOO of silver certi-
ficates against what is called the silver
seigniorage. Senator Lindsay pointed out
that no longer ago than the civil war the
Democratic party was bitterly opposed TO
issuing greenbacks. When Mr. Chase,
who, at the time. was Secretary of the
Treasury, proposed to issue greenbacks
every Democrat in the House and every
Democratic senator except three voted
against the proposition. Afterwards the
Supreme Court declared the greenbaeks
Illegal and when the court. having been
reorganized, reversed that decision the
Democrats declared that the court had
been packed in order to have the decision
reversed.
The effect of the greenbacks was to
greatly impair the credit of the govern
ment The people did not want to take
them and the government found It diff
cult to collect taxes, and even more diff
cult to borrow money on bonds The
Democrats were right in the position they
took, although the issuing of greenbacks
at that time was regarded as a necessity,
and was justified on that ground.
But why is il that the Democrats who
were so hostile to greenbacks in 1862 are
so friendly to them now? Are not the
arguments as to their harmful character
as strong now as they were then? Would
they not be as effective in imparing the
nations credit now as they were then?
What is the situation? There are already
outstanding $4,000 900 of greenbacks and
500 100000 of treasury notes issued under
the Sherman silver purchasing act. If
the proposed $3.50, 600 of greenbacks
should be issued there would be outstand-
ing 60O,OOOCO COO Fiat paper money which
the present administration stands pledged
to redeem in gold. And there would be
only $1OO,O0O,0CO of gold with which to re-
deem them, because it is the proposition
that all other gold in the treasury shall
be used to pay current liabilities. Is it
not clear that the treasury would be in
condition to be easily ralded by specula-
tors? They could send gold to a premium
and force the government to a paper or a
silver basis unless the government sold
bonds for gold with which to maintain its
credit
1t is apparent that under such circum-
stances the government could not sell its
bonds al home or abroad advantageously.
If a paper or silver basis were actual or
threatened IL would have to pay a very
much higher rate of interest than if it's
finances were on a solid gold basis. The
chances are therefore that instead of saw
ing money it would be a great loser If
$50, 100000 of greenbacks should be issued.
AS already stated the Issuing of green
backs in 1862 was regarded as an over
whelming necessity. No such necessity
exists now The United States are rich
and their credit is of the best. They can
borrow money at a very low rate of inter
est. Why not then borrow it instead of
risking the quicksands of greenback finan-
ciering? There is no reason, as far as
we can see, except a desire to get into
harmony with the Populists. But the
Democrats, if they are not watchful VIII
lose more than they will gain by playing
politics in connection with the war. They
were earnestly in favor of the war and
are in a large measure responsible for it.
They cannot afford to insist upon finan-
clal policy that would impair the ability
of the government TO carry on the war.