Norwich bulletin., 1911-08-07
LETTERS TO THE EDlToa
Another Letter from MT. vaIIette.

Mir. Editor: A news item in The Bulletin of July 20 reads: Vanderbilt drew $3.66 minute,' on government bonds, of which he is said to have owned $48, 8,050,000. drawing an interest of $1.922,000 a year. In connection with this wish to inquire first what the government issued bonds for, and, second, what kind of money did the government receive for the bonds it issued? I anticipate the answer from s9 out of every 100 to be, ITO borrow money" but when an answer to the second question is attempted, 99 out of every 100 will be like a fly on sticky flypaper. all tangled up. Did it ever occur to you, MT. Reader, that if the government issued the bonds to bor- row money, it must have borrowed it to use. and it must have used the money it borrowed? Now, what kind of money did the government use to pay the soldiers? :? If you are not sure, ask some old soldier and he will tell you "Greenbacks." Now, let me ask you who made the greenbacks? The answer will be 'the governmental Well, if the government made them and paid them to the soldiers, of whom did it borrow them? Please not all answer at once. Then, if it didn't borrow them what did it issue the bonds for? These are simple questions and easily an swered. But, says someone, "the bonds were issued to back up the green backs. This could not be, for the greenbackS were made and paid out long time before the bonds were sold. At least, that is government statistics. It is true the bonds were authorized February 25. 1862. but were not issued for year or more afterwards. Inside of thirteen months from this date, 450 million dollars of greenbacks were authorized and issued by paying war expenses
 In oho 3o+ oJ lars of f<bonds were authorized, but not sold. Let us find out if possible what the bonds were really authorized to be issued for. if not to borrow money. On February 1@. 1863. E. G. Spalding, a congressman from the Buffalo dis trict of New York, said: Instead of the government issuing this national currency direct to the soldiers and oth- CT creditors without interest, it sells it's own six per cent. bonds to the banking associations, and takes its pay in legal tender notes The above speech was made on the floor of con- gress and can be found on page of the appendix to his financial history.
 Now, let us dissect this matter. The national currency referred to was bank bills. The legal tender notes" were greentaclls. What congress did do was to get rid of the greenbacks which had been made and paid to the soldiers and other creditors without interest" and substitute government bonds and national currency, both of which drew interest
 This was a special privilege granted by act of congress. The principal ob- ject was to have something that%would draw interest The greenbacks were issued direct to the soldiers and other creditors without interest. I could never understand, and have never found any one to explain to me why the government. having the power to create a legal tender paper money. with power to pay any debt in the United States, by what authority it can create a debt and tax the people to pay interest. But some one says: Congress cannot create paper money The supreme court says it can, either in time of peace or war. Here is an other point worth considering: Con- and promises to pay at a specified time. The debt must or is to be paid with money when it is due. How will congress get the money to pay with when the debt comes due? Will it tax it from the people? The people cannot create money. Will congress create the money and pay the debt when due? If so, can it not create the money, in stead of creating the debt and thus save the interest to the people? If congress has the power to create the to pay a debt, it certainly has the power now. Then why run the people in debt. unless to provide interest for somebody? 1 would like for some wise person to say if this is in ac- cord with the constitution.
 J. c. VALLETTE.
 Mo- Franklin. Conn, July 26, 1911.