Norwich bulletin., 1912-07-30
LETTERS TO THE EDITOR.
THE EARLY MONEY.

MT. Editor: From 1792 until 1861 the only money in the United States was stamped on gold and silver. Un- derstand, that to be money it must be legal tender. 1t is true there were state bank bills, but they were not money, only a promise to pay money. The only money the people had with which a debt could be paid during the time from 1793 to 1881 was gold and silver. The gold and silver money was not owned by the government, al . though made by the act of Congress. All this money was privately owned by individuals, who owned the bullion. The government coined it for the own CTS free of expense. It is an indis- putable fact then that the bullion owners owned the money, all of it. Article l. section 10, paragraph 1 of the constitution reads: No state shall coin money, emit bills of credit, make anything but gold and silver coin a tender in payment of debts" The states then had to borrow from the money owners, even the United States itself had to borrow from the men it coined it for. Of course the govern ment taxed the people, but the money had to be borrowed from these same money owners. Not being anywhere near gold and silver money enough to supply the people, some way must be provided for 8 substitute. So the owners of gold and silver coin con- cocted the scheme of state banks.
 This plan was to get a charter from the state to organize a bank and say to put in the bank $100 of gold and silver, and issue $500 paper promises to pay, a swindle to start with These bills were debts of the bankers which they loaned to the people for interest. thus living on the interest of what they owed" Usually when a person Is in debt he has to pay interest, but the bankers drew interest on what they owed, Another thing about the system was that it was unconstitu- tionaL The constitution says. as not ed before. No state shall emit bills of credit" The dictionary says "to emit is to put in circulation as bank bills'
 The question is. If the state has no right, in fact Is forbidden to emit bills of credit, how can it grant the privilege it does not have? That the banks under that system issued more than three times the amount of specie in the bank was proven in hundreds of cases.
 For illustration, in March. 1909, the Farmers Exchange bank of GIouces- ter, R. L, was investigated by legis- lative committee and it found the bank had S580,00O of its notes in cir culation, and only SS6.16 in coin to re- deem it. That is the gist of the old state bank system. The system re- mained in this way until the breaking out of the civil war. The state bank +N fhoSp ct a hank bills tothe government, but the secre- tary of the treasury, Salmon P. Chase, said they were not worth the paper they were printed on. In 1861 there was only $250,000, ,000 of coin in the country This was owned by the bank CTS and private individuals. During the year this amount, all except $20,- 900 900, vanished, so that in 1862 there was only the S25,00G, ,000, and this con tinued for 13 years, or until 1876. This amount was in circulation, mostly On the Pacific coast. This was the cOndi- ton of the government when the war broke out, MT, Sparkling, the first thing in his history, says. "fhe United States, at the breaking out of the f5- beIlion, had nc national bank currency, and no gold or available means in the treasury, or sub-treasury to carry on the war for the union. :" There was but one course te pursue and that was for Congress to create a legal tender paper money and pay its eX- penses with it, which it did, te the amount of over two billion dollars, It is thus proven that gold is net te be relied on in time of danger. Money is a creation of law, Ne one ever saw a piece of gold OF silver that was money until the law said it was,
 J. c. VALLETTE.
 North Franklin.