The Manchester journal. [volume] (Manchester, Vt.) 1861-current, 1920-12-09
WHY OTHER NATIONS MONEY
rs WORTH LESS THAN OURS

An esteemed reader or the Fre
Press asks Us 70 explain why Canadia
money is not worth as much as Amer
can money. That looks like q simpl
query but il really is all comprehend
ing. II will be easier to emphasize tn
manifold influences and factors enter
/ ing into the answer 20 this question
II we extend the various other ques
tons with il.
Why is Mexican money worth o
much less than American money
Why is Russian money worth so little
In the money Of every other gresi
country Why is the note Of ons
neighbor worth less than the word oi
another Why is Britain's pound
sterling worth only s349 or so in
American money instead Of s4.S4 anc
fraction as usual before the war!
Money is merely the medium Of ex'
change between individuals as between
nations. It is merely promise to pay
unless actual precious metal changes
hands in the transaction. Your neigh
Dor may be worthy Of your credit in
every way. and yet you may not have
credit to extend to him. In that case
lack Of money on your part and not
the good standing Of your neighbor, Is
chief factor in fixing the rate Of in
dividual exchange. II you have plenty
of money, you lend il on more gen.
erous basis than il money is scarce.
II now in addition, man Of question
able financial standing asks for credit,
you lave stiu another factor in the es-
tab..shing Of the rate of exchange.
A nations financial legislation and
currency system and monetary stand
ards may combine to depreciate its
money. It will help TO understand this
whole question of international ex-
change ii we study for a moment the
history ard some Of the outstanding
features Of our own nations medium
of exchange. American credit is 30
high and our financial system now so
thoroughly established it is difficult
for us Of the present to realize other
nations once regarded American mon
ey e wildcat currency and the rate
OF exchange was overwhelmingly
against the American people.
Thomas jefferson opposed Alexan-
der Hamilton's proposition to incor-
porate the Philadelphia bank on the
ground that it exceeded the powers
conferred on the federal government
by the Constitution of the United
States, just as jefferson opposed the
Of the States debts by the
lew government.
In 1915 A. j. Dallas, secretary of the
treasury, recommended the creation of
a national bank to relieve the country
from the terrible condition to which
its finances had been reduced by the
second war with Great Britain and by
almost constant conflicts with the In
dians. The first bill passed by Con-
gress was vetoed by Madison on the
ground it would not accomplish the
desired end. In 1916, however, bill
was passed and approved by the Pres
ident chartering for twenty years only
The National Bank with a capital Of
s35 900 900, Of which the federal gov
ernment was to subscribe $1,000, 900.
In 1880 President Andrew jackson
opposed the renewal Of the
charter Of the bank, which would soon
expire, on the ground that the i'm
mense power it had gained had been
grossly abused. II had twenty-five
branches throughout the country, and
L also disburyed all Of the govern
ment's moneys. The brokers and a.
gents Of the bank started an artif-
.ial panic to force jackson to yield,
but he was adamant. After a long
struggle with the presidential veto
figuring conspicuously, the National
Bank, having failed to secure the en-
ietment Of national Legislation to re-
rev its charter, secured charterfrom
he Pennsylvania Legislature In 1899
he National Bank finally suspended
having sunk all Of its
.apitSl. In the meantime the United
States sub-treasury system Of deposits
lad been established under Van Buren,
o assure security.
After the closing Of the National
bank numerous State banks we're re-
led upon throughout the country.
These issued an enormous quantity OF
,aper money. there being no central /
,ower of regulation As a conse-
uence speculation was stimulated to
he danger point and = disastrous
.aric swept over the country il 1887.
'ee0re now living can recall q time
revions e TIE Civil War when tie
arrnrr = State banks caE nued 3
Banks is ne Eate
to ~ ne Bills 81
a without
II