Year: 1875

As we have seen the $1,000 by judicious


handling had become several thousands, and


was now all out at interest on what was con-


sidered good security. By the legal tender act,


however, these god dollars could all be paid in


bits of paper, handsomely engraved, and guar


anteed by the general government. These new


dollars evidently cost bat very little. No one


had to penetrate thickets and mountain fast


nesses to procure them, as they did to obtain


the original gold dollars; thousands of them
could be struck off in day, at an expense per-


haps of cent apiece. But under the old bank


ing system, previous to the war, gold dollars


had been represented by paper dollars and not


so good looking dollars as these either-the


payment of which was guaranteed by the


banks, while the payment of these, was secured


by the government itself. Our thriving money


lender, therefore, was not Immediately dis


turbed by the change; the government was


strong and abundantly able to redeem its


pledges, and he was confident that it would


all come out right. On examining his paper


dollars, however, he found that the words 'On


Demand contained in the promise to pay on
the old paper dollars, was omitted on the new
ones. He could not, therefore, get his gold on
them as he could on the old bills, when he
might chance TO want it; indeed, he was not
sure that he could ever get it, as no time of
payment was named in the promise-it was
simply note without, any day of payment
fixed. s.., r.rt.


This disturbed him somewhat. And then he
saw that the government, having SO many men
to arm, and clothe, and pay, and move, from


or,I IHolla
and shells to buy, and so many wagons and carts
and horses and oxen to procure, would be under


the necessity of issuing very large number of
these dollars 10 pay for them. which not being
redeemable on demand would remain out and


glut the market with dollars: which soon be-
came the case. And as the conflict went on,


many began to doubt the stability of the gov
ernment, and whether 1t would be able to re-


deem its promises. There was thus too great


supply of discredted article in the market,


which in consequence rapidly deprecated in


value, till the largely increased number Of dol


lars pledged in Mr.. IS notes of hand were


scarcely worth the $1,000 with which he started.


Besides he saw this plethora of money was pro-


ducing all sorts of extravagance and wild


speculations. Dollars were SO plenty and so
easily obtained by borrowing o. otherwise that


every man thought himself rich, and began to


supply himself and his family with more costly


food, clothing and furniture, to indulge more


freely in wines and cigars to frequent theatres


and other places of amusement, and FOR
employment to seek some opportunity to
speculate rather than to engage in productive


tive industry. = This general destruction
aud consumption of property-by the double
operation of the waste of war and that of in
dividuals--wthout corresponding production.
seemed to threaten general bankruptcy. And
Mr.. Thrifty began to fear that his thrift was at
end, and that he should never get back even in
deprecated paper money, the number of dol
lars which he had loaned in gold.


Time moved on, and the civil conflict was at
length brought to close. Confidence was re
stored in the stability of the government, and
Mr. Us money, with the rest that had been is
sued by the government, rapidly increased in
value. But looking at the immense volume of
money which had been issued, either directly
by the government, or indirectly by it through
the banks it was seen that there was vastly
more than was needed for the legitimate wants
of business-more than twice as much as was
in use before the war-and many thought it
would never be redeemed, but would be repu-
dated, either in whole or in part; all of which
tended to keep it below par. Our thrifty man
however, Jared better than his fears. Most of
his notes were either promptly paid or!renewed.
Money though superabundant in quantity was
never in greater demand. As the dollar paid
for less, more of them were needed to make
purchases with, :and in the hope of a rise,


through the uncertainty which prevailed in
prices, all were rushing into speculation, and
wanted the use of money. interest rose with
othes things, and his former thrift came back
to him. l .. -t..-


Still he was anxious about the future. He
saw the state of things anomalous, and knew
not what was to come. He applied himself,
therefore, to the study OF the problem before
him. He noticed that there were two kinds of
paper dollars in circulation-the greenback
and the national currency dollar, the former
issued directly by the government, the latter
indirectly by it through the banks, and that the
latter was redeemable in the former. But as
both rested ultimately upon the responsibility of
the government. he could see NO real difference
between them; each was equally current, and
the redemption of one in the other seemed
to be of no account. Neither of them repre-
sented gold, except possibly at an indefinite
legal tender for debts, while the other was
not. This would pay debts, therefore, but
for purchases it was worth no more than the |
other kind of currency. The banks were re-
quired to keep certain percentage OF their |,
capital in greenbacks, and when the govern
ment redeemed these in gold, the banks would |
have gold on hand to redeem the national cur
rency. For all practical purposes. therefore,
the two kinds of currency were the same. The
dollar as a measure of value was deeply clpt |
at both ends Could the great multitude of
them now out ever be redeemed in gold? or
could they be- at least, in his day? Scarcely
half their number in gold dollars, or paper dol
lars redeemable on demand in gold, would be
required by the business of the country. Would
the government reduce the currency in this
proportion by redeeming it, and hold itself in
readiness to redeem the remainder on demand
so as to make it as valuable as gold? How could
it get the gold to do it? Governments spend
money, they do not make it; they can pay
debts only by taxation, or mourning other
debts And what if the senseless cry for more
currency should prevail? 1t was obvious to
him, that what was wanted was less paper and
more gold, and that the government could get
it and thus redeem its pledges, only by taxa