The evening times. [volume] (Washington, D.C.) 1895-1902, 1902-10-06
GREENBACKS DIVIDED
INTO FOUR CLASSES
Treasury Official Defines the
Distinctive Features.
PURCHASING POWERS EQUAL
An Anomaly by Which Several Kinds Of
Money of Unequal Value Attain
Equal Results.

1T is surprising how few people
really know what paper money is, and
what its limitations are, said an Off
ciaI of the Treasury Department yester-
day The paper money Of the United
States is in the form OF promissory
notes of two kinds. namely, converu-
bic or coin notes. and incOnveruble
notes. The former consists Of gold Ger
tifcates, silver certificates. and Treas
ury notes.
a gold certificate is a note or bill
containing a declaration to the effect
that there has been deposited in the
United States Treasury a sufficient
amount OF gold coin 10 redeem the GER
tificate on demand Of the holder A sill
yer certificate is note or bill con
tanning the same declaration with ref
erence TO silve rcoin. Treasury notes
are mer- q promises to pay in coin with
out spec wing gold OF silver Incon-
vertible / Nes are those which simply
bear a pro Use TO pay without reference
to time or manner in which they shall
be paid
National bank notes are one form Of
incouvertibIe paper These notes do not
bear the premise of the Government to
pay. but that OF the bank by which they
are issued They are secured by Gov
eminent bonds deposited with the
United States Treasurer, and are pay
able on demand in some form Of legal
tender money. but not necessarily coin
Thus, It will be seen that the peo-
pI OF the United States are using four
kinds Of doIIars-the gold dollar. the sill
yer dollar. the paper dollar, which may
De exchanged for coin, and the paper
dollar which cannot be exchanged for
coin. They circulate at par, that is. the
purchasing power Of one is equal 10 that
OF any OF the others
Coin is universally acknowledged to
possess greater intrinsic worth than any
other kind OF money; so it would natur-
ally seem that its purchasing power
would be greater; but it must be re-
membered that the purchasing power Of
a paper dollar is not based upon its
own intrinsic value. but upon The coin
for which it IS exchangeabIe.
The purhasing power Of an incon-
vertible naper dollar. however, is based
upon nothing but confidence in the Gov
eminent. Such note has no value in
itself. nor is there any provision what
ever. made for its redemption in coin
Yet. such is the confidence in the Gov
ernuents promise to redeem them at
some time and IN some manner. not
specified, that they are exchanged at par
with the other kinds of paper money.
Indeed. confidence is an element that
enters largely into the value OF all
money We do not know that q gold
coin contains all that is claimed for It
in the way OF purity OF weight, but We
have confidence IN the Governments
stamp upon It. and we receive it with /
1out question. Nor do We know for /
certainty that there are sufficient silver |
coins in the Government Treasury 10 /
make good all silver certificates.
Thus We see how several kinds Of /
money with unequal values can be /
made 10 circulate with equal purchas- /
ing power; yet this equality IN purchas- /
ing power may be destroyed A notable /
example Of depreciation Of paper money
happened during the civil war At the
beginning Of the war the Government /
borrowed large sums Of money by the
issue of bonds. The war continued and
the money was soon exhausted. Unable
TO procure any more funds in this way. /
Congress voted TO issue inconvertibIe /
notes These notes were called green |
backs, and were simply promises to /
pay at some tine OF other. nobody knew
when OF how They were made legal /
tender and everybody was Obliged 10 /
accept them in payment Of debts. As
confidence in the Government sank The
purchasing power OF the "greenback"
became less At one time, the price Of
gold went 70 $3.50. that is. it took 81 so
in greeuback money TO equal in mr.
chasing power. 81 in gold"