Rixdollar

“ The currency is all silver, with the exception of bank notes to the value of about one dollar, and the expenses of life are nearly double those of Denmark, as all the luxuries of life come from abroad. The currency of Sweden, on the contrary, is almost all government paper, and the rag currency reminds me of our shin-plaster days. A paper rix-dollar is about twenty-five cents, and they have notes as low in value as eight cents of our money; the consequence is, that in getting a piece of coin changed of the value of an American dollar, you have a pocketful of rags in exchange. ”

“ If we consent to give coin in exchange for goods, it must be from choice, not necessity. We should not import more goods than we export, unless we had a redundancy of currency, which it therefore suits us to make a part of our exports. The exportation of the coin is caused by its cheapness, and is not the effect, but the cause of an unfavourable balance: we should not export it, if we did not send it to a better market, or if we had any commodity which we could export more profitably. It is a salutary remedy for a redundant currency ”

“ From this it may be collected, that a single gentleman must be an economist if he manages to pay his expences of board, washing, horse-hire, &c. under thirty shillings daily.—The rix-dollar is fixed at four shillings; but is an imaginary sum. Notes of any value may be had; but gold and silver currency are scarcely ever seen; the Dutch being extremely eager to obtain guineas at twenty-one shillings currency, and re-selling them at the rate generally of six and a half, or seven rix-dollars. ”

“ The reality of this excess becomes palpable, if it be supposed, as often happens, that the citizen of a foreign country imports into the United States $100 for the purchase of an equal sum of public debt—here is an absolute augmentation of the mass of circulating coin to the extent of $100. At the end of a year the foreigner is presumed to draw back $8, on account of his principal and interest, but he still leaves $92 of his original deposit in circulation, as he, in like manner, leaves $84 at the end of the second year, drawing back then, also, the annuity of $8. ”

“ But try never so hard, the Government found itself powerless to check the slow but steady decline in value of the people’s dollar. By midsummer, it had fallen to forty-three cents, and ere the fair Northland had wrapped itself, like a scornful beauty, in its Autumn mantle of gold, the fondly trusted coin had sunk to exactly one-third of the value of a standard gold dollar. People carried baskets in their arms, filled with the now discredited coin, when they went abroad to pay a debt or make purchase of the necessaries of life. ”

“ It is of no use to say that we do not need so much currency as the proposed system would supply; because, first, if we should not need it, we shall not use it. Every dollar of paper will represent specific property that can be delivered on demand in redemption of it, and that will have the same market value as gold. The paper dollar, therefore, will have the same market value as the gold dollar, or as a dollar's worth of any other property; and no one will part with it, unless he gets in exchange for it something that will serve his particular wants better ”

“ The 11th section of the act of Congress, already mentioned, provides for the redemption of all silver coins of Porto Rico known as the peso, and all other copper and Porto Rican coins in circulation in Porto Rico 'at the present established rate of 60 cents in the coins of the United States for one peso of Porto Rican coin, and for all minor and subsidiary coins the same rate of exchange shall be applied.' The Congress thus fixed the rate of exchange in the redemption of these coins, and it must be assumed to have been fixed at the value of the peso in American coin. ”

“ If, after the restoration of specie payments, my opinion could be made to prevail, no bank in the United States, nor the Government itself, should be permitted to issue a note of a denomination less than five dollars. "What!" I hear the inflationists exclaim, "you would take the convenience of small notes from the people?" Yes, I would let them have something better. They should handle gold and silver. It is the small currency that most circulates among the people of small means, and it is of vital importance to them that that small currency be most secure in its value. ”

“ The establishment of the bank and the consequent issue of its notes therefore, as well as the discovery of the mine, operates as a stimulus to the exportation either of bullion or of coin,, and are beneficial only in as far as that object may be accomplished. The bank substitutes a currency of no value for one most costly, and enables us to turn the precious metals (which., though a very necessary part of our capital, yield no revenue,) into a capital which will yield one. ”

“ It must be borne in mind that it is the price of short bills, not of those which have some time to run, which determines the course of bullion shipments. Most of the primary elements of value affect long and short bills equally; but the rate of interest and the question of credit exercise an additional influence upon the former, and so modify the fluctuations in their price as to render them unreliable as indications of the currents of gold. If there is a demand for bills upon any particular town, the price of all such bills, whether short or long, will rise. ”

“ The paper money, according to the universal law, that an inferior currency always crowds out the superior one, will circulate alone. Suppose, then, it appears that the paper circulation alone is in excess of the real requirements of the business of the country, what then? Then something like the amount of that excess will go to the Treasury for redemption, and the coin paid out in that redemption being over and above the volume of the circulation required by the business of the country, will again either be hoarded or go into our foreign commerce and flow out. ”

“ Unlike gold and silver, the new currency possesses no intrinsic value, but it consists simply of orders or cheques drawn on the State as the sole possessor of all articles of sale.
Every labourer in the service of the State receives once a fortnight a series of money certificates in the form of a coupon booklet. The name of each holder is printed on the cover, and with a view to preventing the use of the coupons by other persons, it is enacted that the photograph of every individual holder be attached to his book of coupons. ”

“ Suppose one of these men gets from the mint a thousand gold dollars while, for pocket money, $50 is sufficient; he is almost sure to get speedily rid of at least $950 by spending it for enjoyables, investing it in durables, or depositing it in the bank. In any case he and the hundreds of others in the same situation tend to raise prices in the community where they are expending their money, or where they and others draw checks on the banks in which it is deposited. ”

“ An increase, therefore, of currency issued by banks, tends, while the process continues, to bring down or to keep down the rate of interest A similar effect is produced by the increase of money arising from the gold discoveries; almost the whole of which, as already noticed, is, when brought to Europe, added to the deposits in banks, and consequently to the amount of loans; and when drawn out and invested in securities, liberates an equivalent amount of other loanable capital. The newly-arrived gold can only get itself invested, in any given state of business, by lowering the rate of interest ”

“ Thus, the amount of gold obtainable for a paper dollar would vary inversely with its purchasing power per ounce as compared with commodities, the total purchasing power of the dollar being always the same. The fact that a paper dollar would always be redeemable in terms of purchasing power would theoretically keep the level of prices invariable. The supply of money in circulation would regulate itself automatically. Should money tend to increase fast enough to impair its purchasing power, the notes would be presented for redemption in gold ”

“ Our currency is rigid and cannot be quickly expanded to meet an emergency. Their currency is capable of instantaneous expansion. Our chief gold reserves are in the United States Treasury unavailable as a basis for such expansion. Their reserves are in great central banks—immediately available for currency expansion. Besides, under our national banking system, a bank in a non-reserve city with deposits of, say $1,000,000, keeps six per cent, or $60,000 in its own vault, and nine per cent, or $90,000, to its credit with a reserve city bank. ”

“ It happened, also, that our gold coins were too weighty, and of these also they took the like advantage. Moreover, such merchants' servants as still kept their masters' running cash, had fallen into a way of clandestinely lending the same to the goldsmiths, at four-pence per cent, per diem (about six per cent, per annum) ; who, by these and such like means, were enabled to lend out great quantities of cash to necessitous merchants and others, weekly or monthly, at high interest; and also began to discount the merchants' bills at the like, or an higher rate of interest. ”

“ It has uniformly recognized in its fiscal affairs the distinction in value between paper currency and coin. Some of its loans are made payable specifically in coin, whilst others are payable generally in lawful money. It goes frequently into the money market, and at one time buys coin with currency, and at another time sells coin for currency. In its transactions it every day issues its checks, bills, and obligations, some of which are payable in gold, while others are payable simply in dollars. And it keeps its accounts of coin and currency distinct and separate. ”

“ A dollar goes a long way when it is the only one in the house; and when she had everything, including two cents' worth of flitter-gold, four apples, and five candles for the tree, the grocer footed up her bill on the bag that (p. 083) held her potatoes—ninety-eight cents. Mrs. Ferguson gave him the little dollar.
"What's this?" said the grocer, his fat smile turning cold as he laid a restraining hand on the full basket. "That ain't no good."
"It's a dollar, ain't it?" said the woman, in alarm. "It's all right. I know the man that give it to me." ”

“ The world has many mysteries, but none more inscrutable than Western Currency. The notes of most Illinois and Wisconsin banks, based on southern State bonds, having depreciated steadily for several weeks, gold and New York exchange now commanded a premium of twenty per cent. The Michigan Central Railway Company was a good illustration of the effect of this upon Chicago interests. That corporation was paying six thousand dollars per week in premiums upon eastern exchange. ”

“ When, however, new money, composed of some substance of supposed intrinsic value (as of gold) , is brought into the market, or when new notes are issued which are supposed to be deserving of credit, the desire to obtain the money will, under certain circumstances, stimulate industry: an additional quantity of wealth is immediately produced, and if this be in proportion to the new claims advanced, the value of the existing currency is undepreciated. ”

“ The Spanish or Mexican dollar is here almost the only medium of exchange, payments being made all but exclusively in that currency, whereas gold, even English, is but sparingly used, and then with ill-concealed reluctance! The utter want of any other recognized medium of exchange than silver makes all extensive money transactions exceedingly onerous, owing to the expense of transmitting the precious metals, in consequence of which any one wishing to pay in a certain sum of a few thousand dollars in cash, must employ a convoy for the purpose of transporting the money! ”

“ In most direct opposition to the mercantile system, he represents the distribution of the precious metals to be not the cause but the effect of national wealth. A nation rapidly growing in wealth will obtain and keep a larger quota of the general supply of gold and silver. (The high Price of Bullion, 1810.) On the other hand, it depends on the one-sided abstraction with which Ricardo loves to pursue certain assumptions, that every exportation of money is made to signify a peculiar cheapness of money, and vice versa. ”

“ They may, however, be made a special currency for the purpose of paying taxes as gold and silver, and to the exclusion of any other species of paper currency. The amount which might be thus kept in circulation, in addition to that wanted for short investments, would be limited by the gross amount of the annual revenue, and bear but a small proportion to it; since one thousand dollars, in silver or in any paper currency, are sufficient to effect in one year fifty payments of the same amount. ”

“ Under the provisions of the laws of 1863 the currency was depreciated to less than 50 cents on the dollar, and under the law of 1866 hundreds of millions of dollars were bought up by the Rothschilds and other English and European bankers, at from 40 to 60 cents on the dollar, and were converted into five-twenty United States bonds drawing 6 per cent interest in coin, the interest to be paid semi-annually. ”

“ And notwithstanding this outlay, we find in the Treasury, January 1, 1870, in coin no less than $109,159,000, and in currency $12,773,000, making a sum-total of $121,932,000. And yet, with these tokens of national resources manifest to the world, our bonds are below par, and our currency is inconvertible paper. This should not be permitted longer. With all these resources there must be a way, even if we were not taught that a will always finds a way. ”