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demption were plainly stated on the bills themselves, so that the holder was just as competent to judge of their character and value as was the government that issued them. Nobody had occasion to ask, as is now asked about our silver money: What is the purpose of the government in reference to it? Immediate redemption was not then deemed possible, but all means were used that were practicable under the stress of civil war to make a stable money. It was made exchangeable for government bonds paying six per cent. interest in coin, and this feature of the Act of 1862 testifies to the honesty of its framers, and to their intelligent solicitude that the money should remain in circulation no longer than the exigency required. Their mistake was in making the greenbacks a legal tender, though they doubtless believed, as we do not, that this feature would contribute to promote the stability of the money.

In order properly to compare the Greenback Act of 1862 with our late silver legislation, we must keep distinctly in mind that the act was passed as a means of raising money to meet the extraordinary expenditures of the war. There was no pretence of making a better money than we already had; it was in fact a borrowing act, and was not regarded by its authors as in any true sense a monetary act, nor

was there any misunderstanding at home or abroad as to its character in that respect. Nevertheless this act was the beginning and the source of the monetary delusions that subsequently took possession of the public mind-delusions which gave us a Greenback Party, followed in turn by a Silver Party; but for this misdirection of the public thought, the framers of the act cannot be held responsible; they realized fully the imperfect character of the money they were issuing, and in making it exchangeable for government bonds they did the best that could be done to secure its retirement from circulation so soon as the people should be able to replace it by a more stable and efficient money. That it was a serious mistake to make the greenbacks a legal tender, we need not doubt, for it could have no other effect than to lower the credit of the United States, and to prompt the withdrawal of capital from the country. We may well believe that if the money had rested solely on the credit of the nation, it would not have declined to thirty-five cents on the dollar, as it did in July, 1864. The issuance of mandatory money is in its essence a declaration of bankruptcy; how then can it strengthen the borrowing power of a state?

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HERE is no reason to doubt that it was the

THE

intention of the framers of the Constitution to withhold from Congress the power of making paper-money a legal tender; but in order to appreciate properly their attitude on this point, we must try to look upon money through their eyes. They had not the remotest idea that their country had entered upon a stage of civilization that made the use of paper-money imperative; it was therefore not with any thought of supplying the people with a paper-currency that the question was discussed in the convention that framed the Federal Constitution. It was the borrowing clause of the Constitution that elicited debate; there was but little difference of opinion as to the adjustment of the money clauses; the coinage and the general regulation of money were reserved to Congress, and the

States were prohibited from making anything but gold and silver a tender in payment of debts.

In the opinion of the Fathers of the Republic coin was the only money that the people needed; paper was but an incident, a make-shift that might be used to bridge over periods of scarcity of coin; it was in no sense regarded as a permanent medium of exchange. It was chiefly as a ready means of raising funds for the State in emergencies that the question of papermoney was discussed by the members of the Convention, and we must look at it from their standpoint if we would understand their action. They doubtless considered it the duty of government to supply the money and to regulate its value; had a paper circulation been contemplated, discussion upon this point, followed by the embodiment in the Constitution of specific rules for its regulation, would have been inevitable. What they discussed was papermoney as a fiscal expedient; they had already had experience of paper-money, and they were not only greatly impressed by the injustice it wrought to individuals, but had also become convinced that it closed more avenues of financial resource than it opened.

Upon these grounds alone, they withheld from Congress the right to issue paper-money, for it

was that right that was stricken from the Constitution,-paper-money as they understood it, not as we understand it. To them "bills of credit" and

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paper-money were synonymous terms which represented what is known to us as non-convertible legal-tender paper, and the mandatory character of this money was so identified in the public mind with these terms that it was not considered safe to let the harmless word bills stand, lest it might suggest and lead to an issuance of such money. Madison's suggestion that it might be "sufficient to prohibit the making the bills a tender" received no support; another member declared he "had rather reject the whole plan [of the Constitution] than to retain the three words and emit bills." The exercise of the mandatory power was deemed necessary to regulate the value of the money, whether paper or metallic; this was the political doctrine of that age, accepted by every government in Europe. The opposition to the striking out of the words "and emit bills," which gave rise to the debate in the Convention, proceeded from a reluctance to deprive the new government of the exercise of a power which was recognized by all as a legitimate attribute of sovereignty; as it was expressed by Mr. Randolph, notwithstanding his antipathy to paper-money, he "could not agree to

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