33 2 . GREENBACKS, SHERMAN NOTES AND SILVER CERtlFICATES. BY EDWARD ATKINSON. The writer lately made the attempt to put the monthly statement of the national debt in a true form. The monthly statement which is issued by the Secretary of the Treasury is not in a true form. He cannot make it so because existing laws compel him to count as cash a part of the demand notes which have been paid in coin or redeemed by being paid into the Treasury for taxes. These notes are not cash. They are paid notes. Any private corporation, merchant or firm who should make up his accounts in such a way would be regarded as a dishonest and disreputable person, unfit to be trusted. His credit would be gone if he submitted a statement to any bank or trust company from which he desired a loan, in which he counted his own paid notes as cash assets. The principle of law and the common practice are the same. A paid note is a dead note; in legal form it is “functus officio. ” The only true entry that can be made when such a note has been redeemed and paid is to charge it oil to notes payable and thereby reduce outstanding liabilities. If such a note is put out again it works a new act of borrowing. It is evidence that another loan has been made by the promisor. A reissue of such a note is not a continuation of a former loan; it is another, separate, distinct, new loan. It matters not whether the same piece of paper is used or not. Bank notes which have once been in circulation and which have been paid by the bank are used over again. But no bank officer or director would ever pretend that although the same piece of paper is used over again after having been redeemed it is not a new trans- action ; a new, separate and distinct obligation from any previous issuer of such note. Again, the first war issue of a promise to pay to the borrower one or more dollars by the United States was an act of borrowing. The first issue of demand notes, which were made for the conduct of the war, were not a legal tender. The creditors who took them willingly lent their money to the United States on its promise to pay. Soon after, the Government needed to borrow much larger sums. It was believed that the people would not loan the money unless they were forced to do so ; in order to make a forced loan Congress authorized the Secretary of the Treasury to issue what are known as greenbacks, making them a legal tender between man and man. That act of borrowing worked .a forced loan. Many men who had goods to sell which the Government needed for the conduct of the war were indebted to other parties. The Government said : “ Sell me these goods. We cannot pay you in c ^ We will give you notes promising payment in coin at a later date whoever we can pay them. We will make these notes a legal tender. Y( u can then force your creditors to take them in liquidation of your own debts to them, and if they refuse they will forfeit their whole claim upon you. ” In this way the Government collected a forced loan of more than four hundred million dollars ($400,000,000). These notes depreciated. After the war the Government began to fund the notes in interest-bearing bonds. A hue and-cry was made against an alleged contraction of the currency. The right to convert the notes into bonds was taken away, and the power to pay the notes or redeem them and cancel them was also taken away from the Secretary of the Treasury. That did not alter the fact that these notes are evidence of a debt due from the Government. People may be willing to take them as lawful money so long as they aie redeemed in gold. The power to redeem them in gold has lately been doubted, yet no man could have refused them when offered by his debtor to himself. They are reissued by the Treasury. Every reissue is a new transaction ; it is the collection of a new, a forced loan, without warrant except under a fiction of law, without necessity and at a heavy cost— because this fiat money creates a constant distrust both in this country and in foreign countries. Under the so-called Bland-Allison Act the Government collected a sec- ond forced loan for the purchase of silver bullion. The gold was bought by the Government ; it was paid for in legal-tender notes or other obliga- tions of the Government, which the owners of the silver bullion then forced off upon the public under the provisions of legal tender. The silver was coined into dollars and those dollars were made a legal tender at their “ nominal value.” Those are the words of the law. They are not worth their face value. They have varied and fluctuated in their bullion value and are now worth about half their face value and about two-tliirds what they cost the Government. The mass of the people will not take them except when forced ; but being legal tender they can be forced by a debtor upon any one of his creditors. The thir 1 forced loan was collected under the Sherman Act ; under this Act a little over one hundred and fifty million dollars ($150,000,000) of 3 debt was incurred by the Government, payable on demand, for which legal tender notes were issued with a provision in the Act that these notes “ may be reissued ” by ihe Treasury. The reissue of these notes are not compul- sory. The greater part of of that bullion lies dead in the Treasury ; it is unavailable and unsalable, but the notes have been presented in large sums for payment. A very large amount has been paid ; they have been paid in gold because in no other way could their parity be maintained. These notes are not under a mandate of Congress for their reissue. The Secretary of the Treasury may treat these notes at his discretion under the general prin- ciples of law ; the general principle of the law of the Unites States is that the Secretar, i of the Treasury cannot make a loan or do a single act of borrow- ing except under an Act of Congress specifically given for a definite pur- pose. There is no Act of Congress anti there is no appropriation under which the legal tender demand Treasury riotes issued under the Sherman Act can be again put out or reissued after they have been once paid in coin. The writer has been rebuked for telling the truth and for printing a true statement of the National debt. Even some of the advocates of a sound and safe monetary system seem to think that there is something discreditable to the Government in calling the greenbacks or legal tender notes issued during the war “ a debt,” and in pointing out the fact that they only circu- late rt some periods by force, compelling the people of the country to loan money to the Government without interest when they do not wish to. Under the decision of the Supreme Court both the people and the Sec- retary of the Treasury are compelled to treat the legal tender notes of the United States as “ lawful money.” Neither that decision nor the practice of the people in receiving them can make these notes anything but “ fiat money.” The demand of the most crazy Populist or Greenbacker is justi- fied if it is in the power of the Government to make its promises of dollars of the same monetaiy power as the dollar promised. That is the effect of the decision sustaining fiat money. Neither that decision nor any other can make fiat money true money. The best definition of true money that has been given was given by Henri Cernuschi, the leading bimetallist of the world, in these words : “ It is by the ordeal of fire that money may be tried. The coins which, being melted down, retain the entire value for which they were legal tender before they were melted down, are good money. Those which do not retain it are not good money.” If money is not ’ true it is bad money. Legal tender notes are bad money. They circulated originally only by force of law without regard to equality or justice except so far as the necessity of the war justified a departure fr^m the ordinary rules of equality and justice. The forced loan collected for the purchase of silver bullion cannot be justified on any ground whatever. Both the Bland and Sherman Acts were a perversion of the 3 01 2 061 966658 power of public legislation to the purpose of private gain at the instigation of the owners of silver mines and their representatives in Congress ; them- selves voting to put money in their own pockets at the cost of the people from whom they collected by way of these forced loans. It is time to stop mincing matters and being mealy-mouthed. There is nothing sacred about the war greenback. It