Lamartine's Theory about currency.
Editors Dispatch: The
Dispatch, of the 12th ult., contained an editorial embracing the opinion of
Lamartine upon paper currency, which I am constrained to notice.
This branch of political economy has, for seven years past, engaged much of my time and reflection.
I have elsewhere elaborated the subject, designing to publish it in pamphlet form, but have been prevented by the present difficulties in having it done at this time.--Circumstances may develop, making it imperative on the
Government to issue a paper medium of exchange.
That case is with us now; but the
Government should guard every point, indeed, use the extremest caution, in such an act.
We will assume that our Government is too wise to issue any more than is absolutely necessary.
Next to the folly of issuing a redundance, is the danger of counterfeiting.--The Bank of England, aware of this risk, does not permit a note to pass out of the Bank the second time; it is carefully preserved in a wire-netting, and at stated periods they are destroyed.
In former times they were burned, and to be doubly sure, in latter years they grind them up.
If a Government has sources of wealth; in short, if the people who live under it are wealthy, and the commerce of that Government be interrupted, so that the usual amount of specie is not received by it; at the same time, if there be a strong probability of a restoration of commercial prosperity, it is the positive duty of that Government to create a substitute for money.
Our Government may issue any amount it may require, simply guarding against counterfeiting as the Bank of England does, with every assurance of success.
There are few men in the
Confederacy who would not credit such an issue, especially if the note presented an honest face.
Confidence would be enhanced by a conditional promise of redemption.
For instance, at a stipulated time after the blockade was raised, they might promise to redeem a portion, or the whole, as the case might be; and further, they might promise that if the resources of the
Government from imports, duties, &c., should not be adequate, direct taxation would be resorted to, unless the people, through their representatives in Congress, should postpone it.
These notes would not resemble the ordinary bank issues in the least, secured as they would be by the wealth of the whole Confederacy.
The bank note is only worth thirty-three cents in the dollar, and has no other value or importance, until the bank gets the note of the individual property holder.
It is the man who borrows the money from the bank who gives it its credit, and causes it circulation.
Even then the bank promises to do an impossibility, and states an untruth.
Hence the money panics and distress which at various periods have afflicted the country.
The issue of paper as a substitute for money by the
Government, in an emergency like the present, every thinking man knows is absolutely necessary.
He knows, further, that such an issue by a Republican Government is nothing more nor less than a promissory note of the people, given as is done every day in individual transactions in anticipation of a crop, or of some individual enterprise.
All, then, that the people want, is to know that it is a temporary thing, and that it will not exist any longer than the necessity demands.
We are not in fact anticipating our crops.
That risk is over.
The crops are actually made and ready to be exchanged, and all know that after we have exchanged for as many goods as we want, there will be a large balance coming to us, which will be paid with
gold and
silver.
This assertion could be demonstrated had I the space.
Lamartine, who knows more of poetry than of political economy, in common with many other writers, imagines that money exists by the authority of Government, and is merely the representative of value.
If this error could be discarded, much of the mist which has, in all ages, enveloped this branch of political economy would be dissipated.
In every instance in the world, where Government has undertaken to make money out of a valueless thing, (resting exclusively on its authority,) it has failed.
Money must have a value in common with everything else derived from labor
Under the law of adaptation — and nature does not reveal any law more distinctly than that — gold and sliver were designed for money; they are found in the world in quantities, making their production compensate the producer about at the same rate labor is compensated in the production of all other values.
Ages before it was ever coined, it was used as money with the scales.
It cannot be counterfeited, because the school boy may apply tests which will decide whether God or man made it. It is the very essence of value, and not the representative of it. Neither is it the measure of value, as some writers say; but it is a medium of exchange for the whole world whereby man is enabled to denominate and pay prices.
The limits of a newspaper article forbids the discussion of this subject as I would like.
But let me ask those who hold to the doctrine of
Lamartine, if the fact which he asserts, (viz, that in revolutionary times gold and sliver disappear,) is not positive proof of their genuineness, and on the other hand, did not the failure of the
Government, with all its promises and threats to accomplish its design, prove its inability to do so?
Government may create a substitute temporarily for money; but the idea of making an established medium of exchange, resting exclusively upon its own powers, is to defy nature and Nature's God.
N.
Clerks County. 
