The representative., 1900-10-11
A BITTER PILL

Now, I want to ask what kept this note
in active circulstson during all tina,
time when there was no coin on hand
to redeem it WITH No money Of ulti.
mate redemption in the treasury az a
basis for it? 1, will tell you what i,
was. The people said: I'VE will re-
deem it in any of the products of our
labor; we will exchange for our whea.
our corn, our cattle and hogs, or any
of the surplus products of our labor
And that is what gave it value and
kept it in circulation-it was based upon
the entire wealth of the nation and
went forth on its mission performing all
the functions of money that it was in
tended to perform, and was the strong
arm of the government in bringing the
war between the states to a successful
close. The trick Of redeeming in coin
is for the benefit /, Of the bullionist,
brokers and bankers who speculated
during all that time in coin.
We are told tnat during that period
these notes went at discount, and SO
they did, but 1t was because the gov
ernment, at the instigation of the bank
ers and bullionists. Disseminated against
them-would not receive them for GUS
tom dues, nor pay them as interest
on the public debt. AS coin had to be
secured for these two purposes it Great
ed demand for it. AS the coin. was
held by spectators who persuaded the
government to- create the demand for
it, they took advantage of the situation
by putting a premium on the gold which
they held. That is the way in which
the greenbacks are said to have gone
at discount. II that exception clause
had not been placed upon the green
back there is no doubt that they would
have circulated right along at par with
gold and silver, SO far as these metals
would have been in circulation. Sixty
millions Of paper money that had not
the exception clause did so The fact
of the government printed on q piece
of paper making it a legal tender and
receivable for all taxes is equivalnt 20
an agreement Of all the people receiving
that piece Of paper at the value ex-
pressed on It's face. for anything they
may have to SELL It is not that legisla-
tion makes the paper worth any more,
from a commercial point of view. but
that the inscription placed upon the pa
per by seventy millions of people with
all their wealth to make 1t good as long
as the government lasts. And right
here I want to say that we have ar
rived at point instle discussion Of this
fiat money question where great many
people stumble. Twill try and not be
tedious. but + want to make this point
clear. When the people exchange. their
products for paper money they do not do
it on account of the value
which the piece of paper con-
tains within itself, for that
is almost nothing, but because of the
fact that they can In their turn change
that piece Of paper for something they
need-something OF real value within
itself. And this same reasoning applies
to gold and silver. Let me illustrate:
Jones, Smith and Davis come to me for
work. Jones says he is out Of -four and
wants work so that he can get some
flour. Smith says he is out Of meat and
wants to work for meat, while Davis
says his wife and children need some
dress goods. and he wants work so that
he can sst thein. ! aay: well, gentle