with death. And the Kaan causes every year to be made such a vast quantity of this money, which costs him nothing, that it must equal in amount all of the treasure of the world.

With these pieces of paper, made as I have described, he causes all payments on his own account to be made; and he makes them to pass current universally over all his kingdoms and provinces and territories, and whithersoever his power and sovereignty extend. And nobody, however important he may think himself, dares to refuse them on pain of death. And indeed everybody takes them readily, for wheresoever a person may go throughout the Great Kaan's dominions he shall find these pieces current, and shall be able to transact all sales and purchases of goods by means of them just as well as if they were coins of pure gold. And all the while they are so light that ten Bezants' worth does not weigh one golden Bezant.

Furthermore all merchants arriving from India or other countries, and bringing with them gold or silver or gems and pearls, are prohibited from selling to anyone but the Emperor. He has twelve experts chosen for this business, men of shrewdness and experience in such affairs; these appraise the articles and the Emperor then pays a liberal price for them in those pieces of paper. The merchants accept his price readily, for in the first place they would not get so good a one from anybody else, and secondly they are paid without any delay. And with this paper money they can buy what they like anywhere over the Empire, whilst it is also vastly lighter to carry about on their journeys. And it is a truth that the merchants will several times in the year bring wares to the amount of 400,000 Bezants, and the Grand Sire pays for all in that paper. So he buys such a quantity of those precious things every year that his treasure is endless, whilst all the time the money he pays away costs him nothing at all. Moreover, several times in the year proclamation is made through the city that any one who may have gold or silver or gems or pearls, by taking them to the Mint shall get a handsome price for them. And the owners are glad to do this, because they would find no other purchaser give so large a price. Thus the quantity they bring in is marvellous, though those who may not choose to do so may let it alone. Still, in this way, nearly all the valuables in the country come into the Kaan's possession.

When any of those pieces of paper are spoilt—not that they are so very flimsy either-the owner carries them to the Mint, and by paying 3 per cent on the value he gets new pieces in exchange. And if

any Baron, or anyone else soever, hath need of gold or silver or gems or pearls, in order to make plate, or girdles, or the like, he goes to the Mint and buys as much as he list, paying in this paper money.

Now you have heard the ways and means whereby the Great Kaan may have, and in fact has, more treasure than all the Kings in the World; and you know all about it and the reason why.

88. PAPER MONEY AND PROSPERITY'

Paper currency would increase the wealth of the nation in the following ways:

I. It would replace a very expensive medium of exchange-Gold, by a very cheap one-Paper. The fifty or sixty millions of gold which are now supposed to be in circulation, and which are merely used as counters, would be then replaced by notes. Here at once would be a saving of more than two millions a year, by converting this large amount of dead stock into active, productive stock (hear). Suppose a farmer had been taught that it was necessary to use a golden ploughshare worth £1,000, and a man came and said, "I will make for you a ploughshare of iron for 100 pence, which will do the work just as well": it is plain that the farmer would have the difference between £1,000 and 100 pence to employ as active capital (hear). He could improve his land, drain, manure, and what not, when he had substituted a cheap ploughshare for a dear one (hear, hear). Lord Liverpool's wisdom led him to a contrary opinion, when he advocated the introduction of the present system. "The richest standard, Gold," said he, "is best adapted for a rich country." The country was prospering with, and by, cheap money. "Adopt an expensive money," said Lord Liverpool. "Plough your land with a golden ploughshare." We did so, and threw aside an inexpensive and tried instrument merely to adopt a fanciful theory (hear, hear, and cheers):

II. But the most important advantage of a Representative Paper Currency is this that we should obtain a circulating medium capable of expansion, a money in which prices would be able to rise as taxes are imposed, so that taxes might be added to the cost of production, and a remunerative price be obtained (hear). And further, as our

'Adapted from an "Address to the Retford Currency Society" in Currency Tracts. Published by the Society for the Emancipation of Industry. (London,

population increased, and our commodities increased also-in other words, as our buyers and sellers increased-money, the medium of exchange between man and man, might increase in due proportion. People sometimes ask me why the law which governs or which ought to govern-the Currency, cannot be discovered? It is discovered. "Supply and demand," I say, "is the law of the Currency." As men increase, more food is required, and more clothes are required; and if left to itself, the supply will increase with the demand. So it is with Money. Make Paper Money as safe as you please make it as safe and secure as gold itself; and this we can prove can be done― and then leave the trade in money free. Leave it to the general, the universal law of trade, viz., Supply and Demand (hear, hear).

I say that experience fully justifies the expectations of an improved state of things resulting from an alteration of the Currency Laws. I say that the Paper Money System, which enabled this country to prosper in spite of war, would produce tenfold advantages in a time. of peace (hear). Observe, I do not say that Paper Money would do everything. I do not say, for instance, that it would enable a farmer to prosper without skill, labour, judgment, and a fair amount of capital (hear). I do not say that it would supply the place of science and of knowledge in the direction of a man's energies. I know that under any financial system, vice, improvidence, and ignorance will bear their pernicious fruits. But I do say that it would secure to labour its just reward; that it would afford to every man of integrity, talent, and energy, a fair opportunity of improving his condition; that it would prevent the attempts which are made for raising the condition of the people from being counteracted by the frequent recurrence of those periods of severe distress and privation in which their moral condition inevitably deteriorates (cheers). I say that the Paper Money System which enabled this country to lend to Government 600 millions, would enable the country to pay off the debt, and thus cause a reduction of nearly 30 millions of taxes. I believe that this country might then advance to a greater height of happiness and prosperity than ever-that instead of disunion and ill-will, we might see all classes flourishing, and contributing to each other's prosperity; that the well-being of the poor would furnish the best security for the possessions of the rich; that men would learn to prize the institutions under which they live happily; and that England would become the instrument, in the hand of Providence, of civilizing, elevating, and Christianizing the whole world.

89. RECENT ARGUMENTS FOR PAPER MONEY'

1. I am not stuck on silver and gold as circulating mediums. A piece of paper is my ideal. Geologists have things so fine that they can estimate the quantities of silver and gold in the mountains, and the government should issue silver certificates to an amount equivalent to that estimate. It would be far safer, as it would be easy for a foreign nation to capture the coin in the treasury vaults at Washington; but the mountains they could not remove, even by all the faith they could muster.

2. We (speaking for the Farmers' Alliance) believe in the people making their own money; we believe in the Government, which is simply the agent of the people, issuing their money directly to them without going around Robin Hood's barn to find them.

3. If the people had twice as much currency in their pockets as now, their prosperity would be greatly increased.

4. I am in favor of more currency. We haven't enough currency per capita to do the business of the country. If we cannot increase the currency, I think somebody ought to issue more collateral. There is usually enough money if a man has the collateral.

5. My monetary system eliminates from money both the element of intrinsic value and the power to limit or control the value of things of use. I propose that the Government only shall issue money for the public use. In order to do this, I would have it issue immediately 500,000,000 new treasury notes of the denomination of one dollar each. So much of this amount as was necessary the Government should loan to the people; 10 per cent of each loan to be paid back each year; 9 per cent to be applied to the extinction of the principal, I per cent covering the interest. In that way it would be possible to redeem every mortgaged farm in the land within fifteen years.

6. Banks should not be allowed to issue notes. These should be printed and put out by the Government. The tariff should be reduced till there is a deficit in the treasury, and then greenbacks should be printed and issued to pay all claimants. These should not be redeemable in metal money. Each bill should bear the legend, "One dollar, receivable for all dues and debts." This would make it receivable for all taxes and import duties, and a legal tender. This would keep it perpetually at par.

7. Tens of thousands of our farmers have been unfortunate, and can never get out of debt without special relief. I would enact a law

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Adapted from Century Magazine, XLII (1891), 310-11.

stopping the big interest they have agreed to pay, and substituting a debt at 1 per cent interest. It would be done in this way: Suppose I owe you $5,000 and accumulated interest on my farm. This new law would direct you to add the interest to the principal, and go to the treasury of my county and file the mortgage and an abstract of the property, and get a check on the nearest bank for the entire debt. That would satisfy you. Then the county treasurer makes a draft on the United States treasurer for the money, and gets it in crisp new bills. That satisfies him. The United States treasurer accepts the mortgage on the farm-providing it is worth the amount of the mortgage and sends word to me when the 1 per cent interest is due. Is not that simple? It is the first news I have had of the transfer of the debt. That ought to suit everybody.

B.

History of Government Paper Money

(1) SOME EARLY EXPERIENCES

90. THE FRENCH ASSIGNATS AND MANDATS'

One of the first and most serious troubles which confronted the republic established by the French Revolution of 1789 was the scarcity of money. This was due to many causes, but chiefly, says Thiers, to the "want of confidence occasioned by the disturbances." The same authority adds the following general truth about circulation, which is applicable to all countries and in all times: "Specie is apparent by the circulation. When confidence prevails, the activity of exchange is extreme; money moves about rapidly, is seen everywhere, and is believed to be more considerable because it is more serviceable; but when political commotions create alarm, capital languishes, specie moves slowly; it is frequently hoarded, and complaints are unjustly made of its absence." To increase the supply of circulating medium it was proposed that the National Assembly issue paper money based on the Church lands which had been confiscated by the Government. These lands were yielding no revenue, but were a heavy burden. The money, to be called assignats, was really a form of titles to the confiscated lands; for it was receivable in payment for them, and was designed, in addition to furnishing revenue to the Government, to bring about a distribution of those lands among the people. The

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Adapted from Century Magazine, XLIV (1892), 791-93.