The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-01-25

Sherman notes IS the best form of paper
money! 1T was the Judgment of the COM
mission that it is not; and the plan recon-
mended by il provides for the retirement of
these notes by a gradual process extending
over a period of ten years or more. is that
wise recommendation?
The Republican party has been the friend
of the greenback. At first we had to de-
fend ii against the attacks of those who
opposed its issue, and denounced it when
issued as worthless rags. Then its adver-
make fiat money of it by issuing it in unlim-
tied quantities with no provision for its re-
demption. We stood. by it as an honest
rote. honestly issued and to be honestly
paid. We won that fight when John Sher-
man opened the treasury doors on Jan. l.
1879 and said Il am ready; here is gold
for your greenbacks.'
Later it was proposed to dishonor the old
note by paying it off in ffty-cent dollars,
and again we came to its rescue and saved
its good name. 1t is not strange that Re-
publicans should be attached TO the green
back.
But the question is not one of sentiment
It is cold business. Are government notes
the best form of paper currency-best for
us, best for the government. and for all
interests concerned? If the greenback has
spent Its day of usefulness we shall honor
1t and ourselves most by paying it off in
good gold and retiring it from service. In
that spirit let us take UP this subject.
PAPER MONEY.
The first requisite of good paper money
is, that it shall be easily and certainly ex-
changeable for gold. No other test of it's
value is possible, and that test is adequate
only when it is easily applied. This certain
ty of redemption must be not merely for
a day, but for all the foreseeable future. 1t
must be a certainty resting on safe and
permanent system
The next requisite is, that it shall come
into existence quickly when it is needed
and go out of existence as quickly when it
is needed no longer; or, to use the common
phrase. IL must respond in it's volume to the
demands of trade. Paper money is not
value measuring tool it is an exchange
making tool. 1t is better tool for that
purpose than gold. 1t is of the essence of
a good monetary system that it shall be
able TO create these paper tools when they
are needed, and as many as are needed
Ihey ought to circulate rapidly and come
nome often. A note of any kind is prom
lse to pay money. note never paid is an
unreal promise. The maker of such a note
is liable to forget that he is under any Obli-
cation to pay 1t, and neglect to keep him
self In readiness to pay it. Every redemD-
ton OF a note is a demonstrat ton of it's
value, and quick circulation and frequent
redemption is the highest proof of the
sOundness of the system. Paper money is
sued by the government is wanting in this
requisite. 1t IS impossible to give it an
elastic quality. Laws can be passed only at
long intervals. Every act of legislation in
wolves debate. If Congress were to under
trade with suitable supplies of money it
would be debating the money question all
the time, and then with great liability to
error in its conclusions The future de-
mand of trade for tools is like all it's other
demdndS-bSyond the fOreknOWledge of the
wlsest men, The only way to meet it with
always enough and never too many is to
let the supply grow out of the demand-let
trade furnish it's own tools.
INSTABILITY OF A GOVERNMENT
CURRENCY.
But the most serious weakness in a paper
currency issued directly by the government
is the impossibility of securing its stabil-
ity. Nothing keep such a subject out
of politics. There will always be some
proposition on foot to do something with
1t, and there will always be party ready
to take up such a proposition
History demonstrates the proneness of
men to make one great mistake over and
oVer-to imagine that hard times can be
cured cured by the issue of more money. The
mistake is a perfectly natural one When
business Is dull money ceases to circulate
freely. There appears to be a scarcity of It,
Wnat more obvious remedy than to create
more OF 1t? As long all that is necessary
70 the creation of 1t is an act of Congress
there will be ciamor for such legislation
conditions.
Another delusion quite as seductive as this
Is tnat cheap money is a blessing to the
Ject the fallacy of the proposition is clear
enough. Cheap money is money of little
value; and, being Of little value, will buy
little else that is valuable Hence a man
gains nothing by cheap money 1t is lust
as much less valuable to spend as it is
easier to get. But there are millions of men
whose neadS do not seem to be able to
hold both of these ideas at once TO get
money is blessed thing; cheap things are
easier to get than dear things; therefore
cheap money is a blessed thing to a poor
man; and there the reasoning ends. The
dlsparfties of condition among men will
never cease, and while they exist there will
De claSS-and In times of distress it is
liable TO be a large class-who will believe
that cheap money would make things bet
ter for them
Against these tendencies which have their
origin deep in the constitution OF human
nature, it requires a constant struggle to
hold currency issued directly by the gov
eminent up to it's standard And the worst
feature of the struggle is that business is
always haunted by the fear that the effort
may fail and some disaster occur
This is no mere theorizing of mine: it is a
SIMPLE recital of experience. Some ques-
ton has been pending in respect to our gov
eminent currency, some threat of change in
the air. some possibility of trouble ahead
every day for twenty-five years. 1t is not
In human nature to stand up forever under
such strain. 1T is like suStain.ns a weight
upon ones extended arm
IL may be said that the money question
Will always figure in politics, no matter
what system we may have. Perhaps il will
But that element would not be so disturb
ing If the money of the country were not
within such immediate reach of political in
huence and legislation AS it is now, Con-
greSS has but to stretch out its hand to
make or unmake The situation invites agi-
tation. If we had money system set on
a foundation of its own beyond the control
or Congress otherwise than by innovation
upon or destruction of the system the
danger OF inJudicious change would be i'm
mensely decreased. Every piece of paper
money would be Il contract enforceable by
law. The conditions of its issue would be
prescribed by law. The whole system would
rest on law and be protected by the sane
tity of contract. A government note is pay
able II the government wills; all of which
is as the people, or a majority of them,
will, for the time being.
Our school system and our postal system
are creations of legislation. but they rest on
law. 1t would require tremendous revolu-
ton to overthrow them. No one fears such
a revolution. Our monetary system ought
TO have a similar stability, and would have
If 1t were removed from the immediate con-
troll of Congress and given an independent
existence under the guaranty of law.
PROGRESSIVE RETIREMENT.
The plan proposed by the commission
contemplates very gradual withdrawal of
the greenbacks and Sherman notes and the
substitution of bank notes in their places
in such manner as to produce no appre-
c!able contraction in the currency or effect
upon business. The division of issue and
redemption will pay the notes as they are
presented, just as the treasury is paying
them now, and must continue to do if the
government is to maintain its credit al all
NO bonds are to be issued unless it should
become necessary in order to maintain the
redemption fund, just as we must do now
The notes redeemed n ha cd 10