Rensselaer Republican, Volume 25, Number 31, Rensselaer, Jasper County, 30 March 1893 — A VERY OLD FIAT MONEY FALSEHOOD. [ARTICLE]

A VERY OLD FIAT MONEY FALSEHOOD.

Nq advocate of irredeemable fiat money has ever written, a twocolumn article in which, in some form, he did not make the statement that at the close of the war the country had $1,700,000,000, or some larger amount,of legal tender paper money circulation. Of course, Mr. Wolcott, in the long article in yesterday’s issue, injects the same statement, as follows: At the close of the late civil war, taking into account all government issues of bonds and other paper money having legal tender func,tions, and the notes of the national banks, the aggregate was over $1,700,000,000. Within the past fifteen years it has been shown by extracts from the official records of the period when these various issues of bonds and legal tenderfnotes were made, that the statement is grossly incorrect During the past year the Journal has on two occasions proved such assumptions as those of Mr. Wolcott to be without a shadow of foundation in fact and To show the error in Mr. Wolott’s statement the following extract is taken from the report of Mr. Fessenden, Secretary of the Treasury, dated Dec. 6, 1864: The whole amount of national circulation not bearing interest, exclusive of fractional currency, is limited to $400,000,000, subject to a-slight occasional-increase of $50,000,000 for the payment of temporary deposits. Of the five-per-cent, interest-bearing notes there was outstanding Nov. 1, 1864, $120,519,110. To a considerable extent these notes have been and will be used as currency * * * The total amount of interest-bear-ing notes outstanding Nov. 22, 1864, was $210,222,870. What proportion of these may be considered as an addition to the circulation, I am unable to determine. The amount of legal-tender paper which could be used as money was largest Aug. 31, 1865, as appears from the report of the Treasury Department, and was as follows: United States legaltender n0te5..5433, 160, 5(9 Com pound-interest notes 217,024.160 Five per cent, legal-tender notes.! 33,954^320 Total 1084,189,049 The other forms of currency in circulation as money and changeable into legal tenders were: Fractional currency $ 20,844,742 national ban* notes . 1 46, 187,800 T0ta1.... $172,48^,602 Of course, Mr. Wolcott and all fiat money advocates include in the legal tender money of that period the $830,000,000 of seven-thirty notes. These notes were not legal tenders, nor were they used to any extent as money. On the contrary, they were put upon the market as a loan after the limit of legal tender iflsne had been reached. They were as mnch bonds as the five-twenties into which they were subsequently refunded. Like the five-twenties and other bonds, coupons were attached. Like them, the denominations were of SSO and upwards. The only difference between the seven-thirties and the five-twenties was that the

Interest onthe latter was payable injcoin. To show that those who issued the seven-thirties regarded them as a loan, rather than money, the following extract is quoted from the report of Secretary McCulloch, dated Dec. 4, 1865: The seven-thirty notes had proved a popular loan, and although a security on longer time and lower interest would have been advantageous to the government, the Secretary deemed it advisable to continue to offer these notes to the public. No loan ever offered in the United States, notwithstanding the large amount of government securities previously taken by the people, was so promptly subscribed for as this. Of course, the foregoing is conclusive, and satisfies all except the advocates of fiat money, who ignore all facts and continue to repeat their oft exploded falsehood. Their conduct in this matter proves that they either can not grasp a fact or that they are persistently dishonest,—lndianapolis Journal.