PAPER MONEY.

Opinions of Eminent Men Opposed to an Irredeemable Currency.

"A return to specie rayments at the earliest period compatible with due regard to all interests concerned, should ever be kept in view. Fluctuations in the value of currency are always injurious, and to reduce these fluctuations to the lowest possible point will always be a leading purpose in wise legislation. Convertibility, prompt and certain convertibility into coin is acknowledged to be the best and surest safeguard against them.—ABRAHAM LINCOLN, Annual Message, Dec., 1862.

"Such a medium (paper money) has been always liable to fluctuation. Its value is continually changing; and these changes, often great and sudden, expose individuals to immense loss, are the source of ruinous speculations, and destroy all confidence between man and man."-CHIEF JUSTICE MARSHALL, U. S. Supreme Court decision.

"The Secretary recommends no mere paper money scheme; but on the contrary, a series of measures looking to a safe and gradual return to gold and silver as the only permanent basis, standard and measure of value recognized in the Constitution."-SALMON P. CHASE, Annual Report as Secretary of the Treasury, 1862.

"The loss which America has sustained, since the peace, from the pestilent effects of paper mo. ney, on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people, and on the character of Republican govern. ment, constitutes an enormous debt against the States chargeable with this unadvised measure, which must long remain unsatisfied, or rather it is an accumulation of guilt which can be expiated no otherwise than by a voluntary sacrifice on the altar of justice of the power which has been the instrument of it."-JAMES MADISON, in the Federalist,

"Paper emissions by the government are of a nature so liable to abuse, I may say so certain to be abused, that the wisdom of the government will be shown by never trusting itself with so seducing and dangerous a power."-ALEXANDER HAMILTON-Report when Secretary of Treasury.

"Of all the contrivances for cheating the laboring classes of mankind, none has been more effectual than that which deludes them with paper money. It is the most effectual of inven tions for fertilizing the rich man's field by the sweat of the poor man's brow. Ordinary tyranny, oppression, excessive taxation bear lightly on the masses of community, compared with fraudulent currencies and the robberies committed by depreciated paper money." "We have suffered more from this cause than from any other cause or calamity. It has killed more men, pervaded and corrupted the choicest interests of our country more, and done more injustice than even the arms and artifices of our enemy."-DANIEL WEBSTER.

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"Surely we must all be against paper money. * * * We must all set our faces against any proposition like the present, except as a temporary expedient, rendered imperative by the exigency of the hour. * Reluctantly, painfully, I consent that the process should issue. And yet I cannot give such a vote without warning the government against the dangers from such an experiment. The medicine of the constitution must not become its daily bread." CHARLES SUMNER, in the debate on the issue of the first legal tender notes.

"The Committee thought an assurance should be given to the country, if this bill becomes a law, that it is not to be resorted to as a policy; that it was what it pretends to be, but a temporary measure. The opinions of the Secretary of the Treasury (Mr. Chase) are perfectly well known. He has declared that, in his judgment, it is, and ought to be, but a temporary measure. **** And all the gentlemen who have written on the subject, except some wild speculators in currency, have declared that as a policy it would be ruinous to any people. * * A stronger objection than all that I have urged, is that the loss must fall most heavily upon the poor."WM. P. FESSENDEN, Chairman Senate Finance Committee, in debate on Legal Tender Act.

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"No one would willingly issue paper currency not redeemable on demand, and make it a legal tender. It is never desirable to depart from the circulating medium which, by the common consent of civilized nations, forms the standard of value."-THADEUS STEVENS, Chairman Ways and Means Com., in debate on legal Tender Act.

"There is no precipice, there is no chasm, no possible yawning gulf, before this nation so terrible, so appalling, so ruinous, as this same bill that is before us."-OWEN LOVEJOY, in debate on Legal Tender Act.

"The evils produced by a bad state of the currency, are not such as have generally been thought worthy to occupy a prominent place in history; yet it may well be doubted whether all the misery inflicted on the English nation in a quarter of a century by bad kings, bad ministers, bad parliaments and bad judges, was equal to the misery caused in a single year by a bad currency."-LORD MACAULAY, in History of England.

"The theory (of paper inflation) in my belief, is a departure from the true principles of finance, the national interest, national obligation to creditors, Congressional promises, party pledges on the part of both political parties, and of the personal views and promises made by me in every annual message sent to Congress and in each inaugural address."-U. S. GRANT.

Contraction of the Currency.

AN ARGUMENT:

FOUNDED ON FIGURES AND QUOTATIONS FROM OFFICIAL REPORTS, AND
PROVING THAT THE CIRCULATING MEDIUM OF THE COUNTRY

AN ABSTRACT OF THE LAWS OF THE UNITED STATES, RELATING TO
LOANS AND BONDS, ENACTED SINCE 1861.

COMPILED FOR THE

HONEST MONEY LEAGUE,

OF THE NORTHWEST.

CHICAGO, ILL.

PUBLISHED BY THE HONEST MONEY LEAGUE OF the nortHWEST.

Econ 46.18.78.15

HARVARD COLLEGE LIBRARY

GIFT OF THE

OVERSEERS COMMITTEE

TO VISIT THE

DEPARTMENT OF ECONOMICS

Sep 22,1930

B

THE QUESTION

OF THE

Contraction of the Currency.

There has never been a question before the American people of more importance to them than that of the currency. And it is safe to say that there is no question in which the people are more easily deluded by the fallacies of wild theorists or the sophistries of political demagogues. And there is no part of this important subject upon which people are so easily misled, as upon the influence of the amount of currency in circulation upon the business of the country; and on no part of the subject does more erroneous opinions prevail than in regard to the amounts of currency in circulation at the present time, and at different times in the past. The object of the "Honest Money League" is to "disseminate correct information" on all such questions. It, therefore, presents the following tables and analysis, being sure that they are correct, with the hope that their circulation will counteract, to some extent, the gross misrepresentations which have been put in circulation, either by misinformed or reckless persons.

The tables, and the analysis of them, which forms the most important part of this pamphlet, was prepared by MR. C. K. BACKUS, editor of the Detroit Post and Tribune. Though brief, its preparation was no short or easy task, as it condenses a mass of valuable information, for which the compiler had to search through many volumes of Statutes and official reports. Its statements have been carefully compared with the original and official documents, and in every case found correct. So that unless typographical errors may occur it can be absolutely relied upon.

Attention is also called to the text of the more important "Loan and Currency Laws" of the United States enacted since 1861. It is hoped by placing these laws in this compact form and offering them at a price within the reach of every citizen, that many may be induced to read them, at a time when everybody is talking about "the financial question."

CONTRACTION.

The

It is claimed that there has been an enormous contraction of the currency within the years since the close of the war, and the Government is being traduced and denounced on account of it. different tables contained in this pamphlet, with the explanations backed by official reports, and viewed in the light of the Statutes themselves, ought to settle the question beyond all dispute, as to the amount of currency in circulation each year since 1860. The following table prepared recently at the Treasury Department gives the total amount of paper currency in circulation at the close of each fiscal year from 1860 to 1878, with the gold value of the same. It will be observed that a large amount of "one and two year notes,' bearing five per cent. interest, and "compound interest notes," bearing six per cent. interest, are included in the table as currency. But notwithstanding this, if we add the silver and silver certificates now in circulation to the paper currency, the gold value of our currency in 1878, is over forty millions more than in 1865.