Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1922-01-31

beginning Ol tHe COuHIiy J cAiSlSHSS'
The power to create money is vested
in congress by Article VIII of the con-
stitution, empowering that body ito
coin money and regulate the value
thereof, and of foreign coin," while
Article x says, mo state shall coin
money, emit bills of credit or make
anything but gold and silver legal ten
der for the payment of debt" This
is all the Constitution provides on the
subject of money. All other regula
ton is by statutory law:
From the beginning Of our national
finances until the present day, unfor-
tunately, the power to issue money
has been delegated to banks. Robert
Morris, whose master mind is credited
with guiding the Republic through the
trying days Of its Infancy, was ap-
pointed superintendent Of the finances,
and recommended a plan for organiz-
ing a national bank which was adopt
ed, the government holding majority
of the shares.
When Gold Was Cheaper Than Silver.
q In 1891, on the recommendation Of
Alexander Hamilton, then secretary Of
the treasury, congress chartered for 20
years the first Bank Of the United
States-Robert Morris's bank mad
been called "the Bank Of North Amer
ica"-and in 1916 the second bank of
the United States was chartered, its
charter expiring In 1885.
From the foundation of the govern
ment until the time Of the Civil war.
except for certain treasury notes bear
ing interest and not generally used for
money although payable to bearer, the
issues of these two national banks and
the banks of the District OF Columbia,
were the only national currency.
Banks of issue under the state
charters, however, supplied the need Of
active circulation.
Possibly it may be well here to de-
fine what is meant By "Sthe free and
unlimited coinage of gold and silver"
for that was the original design in es-
tablishing national mints. In pursu-
ance of It's legal right to exercise the
power to "coin money and regulate the
value thereof" conveyed in the con-
stitution, mints were established at
various points, where the owners of
the metal could deposit 1t and take
away the equivalent; coin. The gov
ernment recovered its cost Of assay
and minting in the difference between
the value Of the fine metal (the gov
ernment receiving full weight) and the
alloy in the finished coin. The gov
ernment did not buy bullion on its
own account; the amount Of gold coin
ed was governed by the need Of busi-
ness. The circulation pf coins struck
in private mirlts were permitted, while
paper money, bills Of exchange, and
other private issues also were current.
Notifications in the relative weight
of gold and silver occurred at inter-
walls. because the WhtB metal was un-
dervalued In proportion to the yellow
until the original silver dollar was re-
duced in weight and at one time the
gold content Of coins was increased.
The final adjustment was approx
mately 16 ounces OF Silver to one Of
gold, the present ratio Originally the
standard Of fineress was that Of the
English coinage, II parts pure metal to
one of alloy. But this, too, was chang
ed and the French standard of 80 pure
metal adopted.
Even at the legally established ratio
silver was undervalued, and gold was
the natural selection for. money use,
being the cheaper Of the two metals,
because of being the more plentiful
then. This resulted in a scarcity OF
fractional currency or small change"
for which gold was unfit. But when
this fractional currency was coined Of
silver, 1t was boarded or remelted for
bullion, because as silver 1t was worth
more than the money value stamped
upon it. To remedy this fault, in 1853,
the amount Of silver In the half and
quarter dollars, dimes, five and three
cent pieces was reduced to make the
money value greater than the market
value of tie bullion. For this purpose
the government began the coinage Of
this subsidiary currency on its own ac.
count, buying silver at market and is
suing the money but limiting its legal
tender power to SIS. The change did
not affect the status Of the silver dol
lar, which remained. at small pre-
MUM over gold, but was found neces-
sary in business despite its high bull
lion value.
The discovery Of free gold in Cali
fornia and Australia had it's effect on
the coinage of the two, metals, and the
economists and experts Of the SOS
proposed the demonstration Of gold to
avoid a flood of cheap money!" That
sounds strange and yet familiar
strange that gold should be called
cheap money" and familiar that the
cry of "cheap money" should be rails
ed. But soon afterward a discovery
of rich silver deposits, which in turn
made silver the cheap money"-a cry