Year: 1869


ployment Of the National Credit had become impera-
tive This was ultimately perfected in the Legal
Tender act,l which provided at once for a loan of
sjOOOOOOOO and an issue Of Treasury Notes of the
denominations of g. 81 S. $10 &c. TO the extent of
4ljOOOO,0OO: each note to be Legal Tender in all
payments TO individuals and to the Government, ex-
cept that payments into the Treasury for Customs
Duties on ImpOrts and payments out of it for in
terest the Public Debt should be made in
coin These Treasury Notes were not only to be re-
-ceived at par in payment of Internal Taxes and of
subscriptions to loans to the United States but they
were fundabe at the option of holders in the Five
Twenty" loan created by the same act so that a
holder of "Greenbacks" legal Tender Treasury
Notes., which drew no interest, might at any time
convert them into bonds drawing six per cent inter
est in coin, and redeemabe after five and within
twenty years from the date of issue. Beyond this
provision stipulated for the purchase or pay
ment' of at least one per centum annually of the
tire Debt of the United States out of the residue of
the receipts from Customs after paying the interest
as aforesaid.


This measure was born of the agones and perils
of great Civil War it was las passed. the work of
many hands, and was banded back and forth between
the two Houses and their cOnferees so that it diff
fered widely in the event from any original draft or
preconceptou yet doubt that so wise and salutary





any Cabinet Minister or adopted by any European
Parliament. 1t was guarded at every point, and,
though necessarily looking to a wide departure from
che Specie standard provided thoroughly for an early
return thereto. 1t was deemed necessary, year or
TWO afterward, to eliminate the important clause
that provided for unlimited funding of the Treasury
Notes at the pleasure of the holders; but for which
we should have returned perforce to Specie Payments
long ago. Simply allowing holders of Greenbacks"


~ m n
have brought them up to par, or very near it, soon
after the War closed. And now. if the Greenbacks
ycro fundable as the act aforesaid provided that
they should be- they would rapidly flow into bonds,
aud the Banks, thus deprived of Legal Tender
would be obliged to redeem in coin OF fail insuring
general resumption.


If we are ever to have purely Paper Currency
stable yet elastic irredeemabe in cOn vet of nearly
uniform value-it must Inevitably be built on the
broad foundations of the act Of 1862. 1t should be
distinctly avowedly based on the Public Debt and
each note should specify the original Greenbacks
did This note is payable not in coin, butt in bonds
OF the Consolidated Debt of the United States" each
having forty twenty thirty, fifty, may be stipu
laedl years to run. untaXable and drawing an inter
est of four per cent. per annum, payable quarter
yearly These bonds ICOnsolsl should in turn be
exchangeable the Treasury for Greenbacks at par
80 that when Greenbacks were abundant, they
would be converted into Bonds ConsOls; when
they became scarce Bonds would be presented at the
Treasury and Greenbacks issued IN exchange for
them. ! am not sanguine that any purely Paper
CuTrency-that is, any Currency of Paper not re-
deemabe in coin on demand-win be found in prac-
tce to subserve the ends Of true Circulating Medium
and Measure Of Vaue but, if any will answer, this
seems most likely TO do


The idea of creating and maintaining currency of
Paper OF Credit purely did not originate in the ex
gencies and necessities of War. More than twenty
years ago, Mr.. Edward Kellogg, retired merchant
of our City elaborated the plan of such Currency
and expOunded it in volumes which the sequel
to and complement of one previously put forth by
him, entitled Currency the Evil and the Remedy"
In each of these works. the author contends that our
monetary system is mistaken and oppressive-that it
dscourages enterprise, and oppresses poverty while
1T aggrandizes wealth, enabling the few to enrich
themselves inordnately at the expense of the many
In Mr.. Kelloggs view. the monopoly of Money by
the wealthy few is even grayer fault than the
monopoly of Land; the greatest evil of which the
poor are victims being the high rate of interest and
the difficulty of obtaining money on loan. Mr.. X
maintains that per cent. is high rate of inter
est and that every one who can give good real es-
tate security ought to be enabled to borrow thereon
TO the extent of half its appraised value. and that
the Government should be ready and willing to loan
to that extent To this end, he would establish a
great National Bank (called by him National
safety Fund,9 which should lend 10 every citizen
recurring it. on a mortgage of real estate worth
twice the amount, its Legal Tender paper, stipulat
ing as follows;


No. I6S9l MONEY. Dated June 8, 1867


3bOOJ THE UNITED STATES 1900.
,si pay 20 the bearer FIVE HUNDRED DOLLARS IN Safely
Fund note on demand at the SAFETY Fund once IN the
Ciy Of lHe'0 York;


The above note designed to serve as money, is not
on interest but the Safety Fund note in which it Is
fundable at the pleasure of the holder reads thus;
No. HIel SAFETY FUND NOTE. Dated Sept. !, ls7ol


SbOO.l one year from he 1900.
1st dan of May Hez at any time hereafter The UNITED
STATES tvfU pay 10 A. B., order IN ne Guy Of lNe'o-
York; FIVE HUNDRED DOLLARS; and, untH such pay
aeni Is made oH pay thereon, the lst day Of
qy in each year at the rate Of per cent per annufn
The notes secured by mortgage given to the Gov
ernment by borrowers above. will bear an interest
of one cent and one mill per annR on each dollar DOT
roWed and will be payable only at the pleasure OF
the maker 30 long as the interest shall be duly paid
The borrower who should object TO this rate OF to
giving the security required must be hard to please


Imust demur to several of Mr. KellOggs fundamen-
fal assumptions viz. The powers of Money, which
alone render it useful are created by legislation
therefore, Money can possess none but legal value"
Ibod that Money had been created or recognized Dy
common consent before Governments meddled with
it-that their interpositiOn in the premises was but
the recognition or declaration of preexistng fact
do not deny that Governments can create, nave
created Money nor that there may be and IS money
whose yalue is representative OF artifcial do not
deny that this representative Money may ehcienty'