Jasper Republican, Volume 1, Number 50, Rensselaer, Jasper County, 27 August 1875 — Some of Congressman Kelley’s Errors. [ARTICLE]

Some of Congressman Kelley’s Errors.

Hr. 8.65 Kelt# claims to pursue the inductive method m political economy; that is, he claims to proceed upon the basis of facts—to collect all attainable facts relating to any given question, observe them in their true relations, and thence, draw his conclusions. Now observe how he treats facts. In his Indianapolis speech he asserted that $75,000,000 of the notes of the Bank of England were irredeemable; or, what is the same thing, that the bank is only required to redeem its issues in excess of $75,000,000. This is not true. The bank is required to redeem in coin all of its notes that may be presented, to the last pound. Its issues to the amount of £15,000,000, or $75,000,000, are secured by Government bonds, much as our banknotes are secured, and it is bound to protect all its issues beyond that sum by an equal amount of specie in its vaults; but the portion secured by bonds, which Mr. Kelley says are irredeemable, is, in fact, as truly redeemable as the rest. Again, Mr. Kelley asserted that “England was compelled to suspend payment periodically,” evidently meaning that the' banks were compelled to suspend payment of their notes. This again is not true. Since the passage of the Bank act of 1844, limiting bank issues both in respect to the amount and denominations of notes, the notes have never been discredited in the least, though payments to depositors have several times been suspended. In other words, the paper currency of England has always been up to the specie standard ever since the passage of the act of 1844, no matter what disasters may have befallen the business community. And again, Mr. Kelley attributes the sufferings of the English people in 1822 to what he calls an “ insane policy of specie resumption,” ignoring the fact that these sufferings began long before that policy was inaugurated, ana when depreciated notes were “ the money of the realm,” and that they have experienced no sufferings at all to be compared with those since they have been firmly planted on the specie basis Once more, Mr. Kelley reviewed the banking history of this country for the purpose of showing the fallacy of the specie basis, ignoring the fact that, except for brief intervals, we have always had the rag basis, and never the specie basis, in this country. And once more, Mr. Kelley magnified the bond-greenback currency system, well knowing that it had never been tried anywhere on the face of the globe, and therefore that there was not one solitary fact to be adduced in its support And once more, Mr. Kelley attributed the late failures in England to an expansion of bank credits in consequence of the inadequacy of the currency, without bringing one single fact to show that the bank credits would have been any less proportionately had the volume of currency been ten times as great. And, finally, Mr. Kelley ignored entirely the experience of countries using irredeemable paper as compared with the experience of other countries using hard money—not paper nominally convertible into hard money, but hard money itself. The experience of California during and since our crisis of 1873 has been a standing fact condemning irredeemable paper money and demonstrating the safety and sufficiency of hard money. As long as Mr. Kelley misstates, perverts and ignores facts after this fashion he will have no claim to a place among inductive philosophers. —Chicago Timet.