Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-09-08
Small Change for Nation


here, but there is lesson in the final
results. Secretary Chase, an able man
but hopelessly IMMERSED in economic
matters, proposed to Congress that
the crisis be met by q law making
postage stamps legal currency, and
Congress actually passed this mon
strosity. Before this incredible meas
ure took effect the post Office simply
refused to go on, and in his bewilder-
ment Chase violated the Constitution
and issued Federal notes in fractional
sums.
As a consequence this country had
to endure for the next IA years a
small change currency of 3, 5, 10. IS,
Is and so cent paper shin plasters, +"
a cause Of constant loss, inconvenience
and irritation to the people. 1t would
be marvellous thing for this country
to have. just once, Secretary of the
Treasury who has an elementary I'M
derstanding of the facts about money
A word more about this Civil War
affair. In the late 80s, a quarter
century after all the silver coins had
completely disappeared, when every
body thought they had gone to the
melting pot. the whole lot reappeared
and literally choked the channels OF
trade. They had been to South
America and the West Indies and
served as currency for a generation
and change In silver relations to
gold made them more valuable back
In their old home.
All this seems long introduction
to the subject of small change de-
velopments IN our time. But it has
served to show how important and
delicate a matter control Of small
change Is. 1t illustrates the impor-
tant truth that when q government
runs counter to the customs of the
people in the field Of currency or
fails in its responsibilities the people
simply take matters into their own
hands, regardless Of law. All the
private issues Of the Civil War period
were fiagrantly illegal, by the Con-
stitution, by Frederal law, and usual
ly. by State law.
Warning for Future.
There Is in these dry bones of
monetary history a warning for the
future. At the present moment the
silver In our current coins is worth
less than so cents for each dollar's
worth. But our Government has en-
barked on q policy Of imitation and
also on a policy OF artificial increase
Of silver prices. There is q definite
possibility that some day these two
policies will cause another calamity
like that Of 1852. We Just barely
escaped it in 1919 In that year the
banks Of Scranton, Pa, actually is
sued l cent paper notes to provide
small change. In no previous crisis
Of the kind has the Treasury had any
understanding Of the problem or
known what to do about 1t. There
is simple, workable way to provide
for this emergency In advance. The
writer recommended it to Congress
years ago without result.
But about those midget coins. Re-
Gently the entire country was In
terested as well as puzzled by a bill
that the Treasury drew up and sent
to Congress.
The Treasury-drawn measure pro-
vided for the coinage by the Treasury
Of coins below ! cent In value, the
types and materials and value to be
determined by the Treasury. It was
a proposal to permit the Treasury to
add at its discretion tiny little coins
to q currency that is already the
most confused and various In all the
world.
The papers explained the purpose
Of the measure. It seems that "A
States have passed general retail
sales-tax laws. Some Of them are
fiat per cent or 2 per cent or 3
per cent taxes on all sales, which
means that Q man buying . 10 cent
cigar owes a tax Of $40 or Us or
1/10 Of . cent. In some cases the
tax Is 2 per cent, but on all sales
there Is q minimum tax Of ] cent
The gigantic intellects that passed
these taxes did not stop to ind out
how man Is to pay q tax Of or
2 mills. They did not stop to con-
slider that a l cent tax on q S cent
purchase is q tax Of 20 per cent
When the tax geniuses Of these States
discovered what the laws meant they
went into the minting business. Some
Of them appealed to the Treasury
but others started coming pieces Of
such dimensions as 2 mills and
mills. Illinois has been coming IL
mill pieces, while Missouri. Washing
ton, and Colorado have been proceed
ing with plans to coin one-fifth Of
q cent tokens and what not.
The Treasury, it was reported, wal
very hostile to these state coinages
It planned to coin under the pro-
posed law two pieces, q mill piece
and o one-hah cent piece, to enable
these States to work out their ia,
problems. The papers reported thai
the President was interested in thu
coins and proposed that the half-cen
have q hole in it. like a doughnut
and that the one mill piece bt
made square. The suggestion makes il
clear that there is a marked diff.
ference between q philatelist and 6
numismatist.
An odd thing happened in the
House. The Coinage Committee wa,
very cold. They took the position
that giving the Treasury power tc
choose the denominations Of coins les
than one cent in value was q sur.
render Of power that rightfully be.
longed to Congress. This, mind you
was the same House that gave ont
man, not o member Of Congress, sole
and arbitrary power to debase tn,
gold coinage Of the country so pei
cent, to destroy the gold standard by
establishing bimetalism at any ole
ratio, and to initiate the currency with
5000, 000, 900 in greenbacks.
There appeared to be more thar
midget coins in this. There was
What the Congressman feared wa
not Treasury power 1t was politi.
cal explosion. Gradually Congress Il