Money-Part 1 The Legal Tender Paper Fiatism 1862 http://dayspringgatheringscircle.org/blog/?p=89 <http://dayspringgatheringscircle.org/blog/?p=89>
The progress of the United States in the direction of good money, of the right kinds, both gold and silver, in ample amounts, was arrested in 1862 by one of the most discredible and disasterous departures from sound money principles on record in HISTORY. An Historical Record Knowledge UPDATE and No Cost Downloads for further private research and inquiry. We can learn from history how past generations thought and acted, how they responded to the demands of their time and how they solved their problems. We can learn by analogy, not by example, for our circumstances will always be different than theirs were. The main thing history can teach us is that human actions have consequences and that certain choices, once made, cannot be undone. They foreclose the possibility of making other choices and thus they determine future events. Our ignorance of history causes us to slander our own times. Flaubert DaySpring Gatherings Network Gabriel Paul January 19, 2008 DaySpring Library Upload Updates Blog RSS Feed here: http://dayspringgatheringscircle.org/blog/?p=89 <http://dayspringgatheringscircle.org/blog/?p=89> Truth the Greatest Disinfectant like Light against Disinformation, Lies and Spin The progress of the United States in the direction of good money, of the right kinds, both gold and silver, in ample amounts, was arrested in 1862 by one of the most discredible and disasterous departures from sound money principles on record in HISTORY. For the purposes of the civil war, which began in 1861, the United States, by August of that year, needed large sums of money, which could be had only by large use of the national credit. Abraham Lincoln's Secretary of Treasury, Salmon P. Chase, was confronted with the sole question, how to wisely and honestly use the the national credit in getting large sums of money; it might be many of them, one after another, into indefinite future. But the high intelligence and lofty patriotism of Mr. Chase not only took no note of the plain dictates of wisdom and honesty in finance, but they pushed aside the advisors who knew those dictates throughly, and plunged him into precisely the abyss which the worst thieves of criminal finance would have dug for him, that of getting money on the unsecured and irregular paper of the United States, instead of on regular paper with the best possible security. The better the paper the more would it be honestly handled, the worse the paper, the more would the thieves be able to use it for their profit. Mr. Chase put the United States completely into the hands of the thieves, with a profit to them of hundreds of millions of dollars, every dollar which might have been saved by wise and honest dealing with the accredited experts of finance. The amount of gold in the country was unusually large and banking operations based on it were unusually safe. The most obvious wisdom was to make use of this, carefully guarding the gold as a reserve in the banks, and borrowing of them, not by taking their gold, but by an arrangement to draw checks upon them, which they would pay in the usual way, to some extent perhaps, in gold, but presumably in their notes. Mr. Chase, negotiated three loans of fifty million each, at a meeting, with the representatives of the chief American banks, in New York, August 9, 1861, but he refused their advice to take the money through checks drawn upon them, and insisted upon having the gold, and upon having demands paid in gold which just as well could have been paid in bank notes. One hundred and seventy million dollars in gold were at considerable expense carried to different parts of the country, and paid away, when it was in reality worth more than its nominal value, and as the bank reserve of the country, vastly more than Mr. Chase got for it. A worse blunder of opinionated ignorance could not have been made, at that moment, but the moment speedily came in which the opportunity for worse was presented, and meanwhile, Mr. Chase had not learned to take the advice from those who knew the dictates of wisdom and honesty in finance. The effect of Mr. Chase's disregard of the advice of James Gallatin and other representative American bankers, not to take away from the banks the coin basis of credit, was to reduce them to suspension of specie payment, December 28, 1861- a suspension that lasted until December 31, 1878. In 1862 the government of the United States authorized paper promises in the form of notes, silent as to the time of their redemption, to be equal in debt-paying power to the metallic money they represented, though at the time the promises were worth in currrent exchange less than one-half as much as the coin itself. The Supreme Court of the United States held that the National government by its inherent right of sovereignty had a right to change the terms of all contracts whenever the law-making power deemed such a change necessary for the welfare of the country. But it was not a question of desperate peril to the country, not in the least, it was a question of wisely and honestly using the national credit to get money to carry on a war, a question of straight forward honest borrowing, at a savings to the country, as it proved later of hundreds of millions of dollars, or roundabout, thievery of lawless borrowing, at a loss of hundreds of millions of dollars, not to speak of the cheating, by payment in half worthless money, of all persons under contract to give service at fixed rates. It was an act of financial and moral lawlessness, absolutely inexcusable, and impossible to have occurred, had not our system put into place of chief responsibility, a man who could venture to disregard the advice of financial experts, in dependence upon his own uninstructed and in fact incompetent judgment on questions of money. Fiatism is a method of making current by law, making to pass that is as money, or to pass in barter instead of money something which would not pass at all or would not pass exactly the same, but for the law. For pure honest money in gold and silver current by weight, there is no necessity for any government fiat. Fiatism which has had the largest place in history and which still lingers to plague the world with its destructive operations is that by which governments have issued money either coins or paper, more or less false or fraudulent in character, or at least, more or less doubtful and worthless, for lack of security, or even expectation of security, for their payment. The chief thieves of history in this matter have been unscrupulous kings and reckless despots, undertaking my criminal monetary schemes to rob their subjects. So constantly however, and so largely was this method of criminal finance worked during the centuries of universal ignorance and general denial of rights, that something a tradition of its legitimacy was established. Hence the possibility of such an extraordinary, and we must say such disgraceful exhibitions of criminal finance as appeared in the American Colonies and during the American Revolution, in the issue of paper money, under circumstances not only doubtful to the last degree as to proper prospect of payment, but thoroughly discreditable and dishonest in respect of the means taken to provide security for payments. Puritan patriotism went shamelessly wrong through the craze of uninstructed and unprincipled for cheap money, for escaping honest payments of debts, and for making gain by legal manipulation instead of by honest labor. "No Kings, however tyrannical, ever debased the money in circulation so recklessly, persistently, and outrageously, as the colonial assemblies."¹ "We have suffered more from this, than from every other cause of calamity, it has killed more men, pervaded and corrupted the choicest interests of our country more, and done more injustice than even the arms and artifices of our enemies." Pelatiah Webster, Philadelphia Patriot, 1781 worthless collapse of Fiat Paper Money. ¹ Horace White, Money and Banking. In Service, Peace be with you Gabriel Paul http://www.dayspringgatheringscircle.org <http://www.dayspringgatheringscircle.org/dayspring_library.html> Fear knocked at the door.....Faith Answered........There was no one there. Truth cannot be bought and sold, only temporarily obfuscated by falsehood.Yet all falsehood and illusion will themselves ultimately be crucified upon the cross of the omnipotent Sword of Truth when it pierces the heart in purification. There is something within me that might be illusion as it is often case with young delighted people, but if I would be fortunate to achieve some of my ideals, it would be on the behalf of the whole of humanity. Nikola Tesla I don't know what your destiny will be, but one thing I do know; the only ones among you who will be really happy are those who have sought and found how to serve. "History is nothing but a procession of false absolutes, a series of temples raised to pretexts, a degradation of the mind before the improbable." "War is the best way to remold society. War! Shatter society to bits. Break it apart. Then we can remold it nearer to the heart's desire. And what is our heart's desire? Collectivism." Men with great knowledge are easily enslaved if they do nothing to defend their freedom. Knowledge by itself is not power, but it holds the potential for power if we have the courage to use it as such, and therein lies our hope for the future. If we act upon this knowledge, it is an opportunity, not just to know about history, but actually to change its course. "Remember when it was give me freedom or give me death? Now it is save me from death and take my freedom, please." NOTICE : This non commercial no tender for access or use private research resource contains unpublished protected work product. We make all such non commercial speech and electronic communication within this resource available in our private efforts to promote well being, good, peace and harmony for all that includes but is not limited to spiritual principals, human liberties, learning, religious, economic, scientific and social ideas. 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