Year: 1878

An inconvertbe currency, regulated by the |
price of bullion, would conform exactly, in all
its variations, 10 a convertible one; and the |
only advantage gained would be that Of exemp |
ton from the necessity of keeping any reserve
Of the precious metals; which is not very i'm
portant consideration, especially as GOVERN
MENT, so long as Its good faith is not suspect
ed, NEED NOT KEEP so LARGE A EEsERvE ss
private issuers, being not so liable to great and
sudden demands, since there never can be any
real doubt Of its solvency. Against this small
advantage is to be set, in the frs. place, the
possibility OF fraudulent tampering with the
price of bullion for the sake of acting on the
currency, in the manner OF the fictitious sales
of corn, to influence the averages, so much and
80 justly complained OF while the corn laws
were In force. But a still stronger considera-
ton 10 the Importance OF adhering to a simple
principle, ineligible to the most untaught
capacity. Everybody can understand converti-
bility; every one sees that what can be at any
five pounds. Regulation by the price of bullion
is more complex idea, and does not recon-
mend itself through the same familiar associa-
tions. There would be nothing like the same
confidence, by the public generally, in an incon-
vertble currency so regulated as in a converti
BILE one and the most instructed person might
reasonably doubt whether such a rule would be
as likely to be infexibly adhered to. The
grounds Of the rule not being so well under
stood by the public, opinion would probably
not enforce it with az much rigidity, and in
any circumstances of difficulty, would be likely
to turn against it: while to the government
itself, suspension of convertibility would ap
pear much stronger and more extreme meas
ure than relaxation OF what might possibly
be considered a somewhat artificial rule. There
is therefore great preponderance Of reasons
in favor Of a convertible, in preference to even
the best regulated inconvertble currency. The
temptation to over-issue, in certain financial
emergencies, is so strong, that nothing is ad-
missible which can tend in however slight a
degree, to weaken the barriers that RESTRAIN it.


IS 3. Although no doctrine in political econ
omy rests on more obvious grounds than the
mischief Of paper currency not maintained at
the same value With a metallic, either by cor
vertbillty or by some principle OF limitation
equivalent to 1t; and although. accordingly,
this doctrine has, though not till after the dis
cusslons OF many years, BEEN ToLERABLY Eff
FECTUALLY DRU81MED INTO THE PUBLIC MIND:
yet dissentIents are still numerous, and projec
tors every now aud then start up with plans for
curing all the economical evils OF society. by
means of an UNLIMITED ISSUE OF IYcoSvERT1-
BILE PAPER There is, IN truth, great charm
IN the idea To he able to pay off the national
debt, defray the expenses Of government with
out taxation, and, in fine, to make the fortunes
of the whole community, is brilliant prospect,
WHEN ONCE MAN Is CAPABLE OF BELIEVING
THAT PRINTING FEW CHARACTERS ON BIS OF
PAPER WILL DO IT. The philosophers stone
could not be expected to do more


What wonderfully apt illustration the fore
going Is OF the doctrines of modern Greenback
ers lad Mil written in our day, and for the
express purpose OF upsetting and overthrowins
their peculiar doctrines. he could not have
stated stronger case against them


pieces of paper" he says, with few
characters printed on them for instance.
paper ticket with the great seal of this Govern
ment engraved thereon, and the bird of free
dom on one end, with outspread wings, aud a
printing press on the other, bearing this
legend " 1hs is Five Dollars. United states
of America" and you have the fiat money OF
our National friends, as well as the worthless
currency described by our author.


But let us examine Moulton's favolite author
stil further:


AS these projects, however often slain, al
ways resuscitate, 1t is not superhdous to exam
inc one or two of the fallacies by which The
schemers impose upon themselves. One OF the
commonest is, that paper currency cannot be
issued in excess so long as every note issued
represents property, or has foundation Of
actual property to rest on. These phrases, Of
representing and resting, seldom convey any
distinct or welldefned idea: when they do
their meaning is no more than this-that the
issuers OF the paper must have property, either
of then own, or entrusted to them, to the VI lue
Of all the notes they issue; though for what
purpose, does not very clearly appear; for II
the property cannot be claimed in exchange for
the notes. il Is difficult to divine in what man
ner its mere existence can serve to uphold
their value. presume, however it IS intended
as guarantee that the holders would be finally
reimbursed, in case any untoward event should
cause the whole concern to be wound up. On
this theory, there have been many schemes for


conlng the whole land Of the country into
money and the like.


In 20 far as tins notion has any connection
at all with reason, it seems to originate IN con
founding two entirely distinct evils, to which
paper currency is liable. One is, the insolvency
of the Issuers, which, If the paper Is grounded
on their credit-if it makes any promise oil
payment IN casr, either on demand or at any
future time-of course deprives the paper Of
any value which it derives from the promise


To this evil, paper credit is equally liable, how
ever moderately used; and against 1t, proviso
that all issues should be founded on proper
ty:" as, for instance, that notes should only be
issued on the security OF some valuable thing


expressly pledged for their redemption, would
really be efficacous as precaution. But the


theory takes no account Of another evil, which