book ii., chap, iii., in explaining the great difference in the

relative growth of the Roman and Spartan republics, relates that "Lycurgus, the founder of the Spartan republic, believing that nothing could more readily destroy his laws than the admixture of new inhabitants, did every thing possible to deter strangers from flocking thither. Besides denying them intermarriage, citizenship, and all other companionships (conversationi) that bring men together, he ordered that in his republic only leather (non-exportable) money should be used, so as to indispose all strangers to bring merchandise into Sparta, or to exercise any kind of art or industry there, so that the city never could increase in population."

[21] Examination will show that the United States, for one-sixth part of their existence as a federated nation, have been in a state of war; and, for the future, there is no good reason for supposing that the country is to be any more exempt from the vicissitudes of nations than it has been in the past. With irredeemable paper, violation of plighted faith, gold demonetized and banished, in what condition is the nation for maintaining a great national struggle?

[22] In a case often overlooked (Bank vs. Supervisors, 7 Wallace), the United States Supreme Court decided that "United States notes are engagements to pay dollars; and the dollars intended are coined dollars of the United States." Refusal to pay such notes in coin is clearly, therefore, repudiation.

[23] Irving's "Conquest of Granada."

[24] In every cabinet of rare coins in Europe there will be found specimens of what are known as "obsidional" coins, or coins struck in besieged places to supply the place of coined money. These coins appear, in all instances, to have been regarded as obligations sacred in their nature, and their repudiation a high crime against morality and patriotism.

[25] Speech of General B. F. Butler, United States House of Representatives.

[26] Letter of Wendell Phillips to the New York Legal-tender Club, 1875.

[27] Charles Moran, New York Commercial Bulletin, October 5th; 1875.

[28] Opinion of the United States Supreme Court, by Justice Strong.--Wallace, 12, p. 553.

[29] The Indians on the Atrato River (Central America), when first visited by one of the recent inter-ocean-canal exploring parties, were found to be unaccustomed to the use of much, if any, clothing; but after a little intercourse with civilized man, some of the more intelligent of the natives presented themselves with their bodies painted in close imitation of clothes, which they claimed to be superior in every respect to the genuine articles worn by their visitors.

[30] This was what actually happened in Connecticut in 1704 and thereabouts. See "Madame Knight's Journal," quoted in Felt and Bronson's "Histories of New England Currencies."

[31] Whatever may have been the immediate effect of the gold-discoveries in California and Australia, no economist of repute now holds to the opinion that the average purchasing power of gold all the world over is any less than it was in 1849-'50; or, in other words, that any increase in the quantity of gold since 1849-'50 has resulted in any present depreciation.

[32] This is the American interpretation. The English interpretation of "legal tender" was brought out in a debate in the House of Lords, in June, 1811, when it was shown to mean, in its application to Great Britain, no more than this: that in a suit between creditor and debtor, if a judgment went against the debtor, he was allowed to plead a tender of bank-notes in arrest of execution, but he could not claim that the notes should be forced upon the creditor in discharge of the debt. During the long suspension of specie payments in Great Britain, therefore, bank-notes were never made legal tender in the American sense.

[33] After the Revolutionary war it was considered disgraceful to take advantage of the legal-tender character of the depreciated Continental or State paper money to liquidate debts with it; and the Society of Cincinnati expelled a member for so doing. The State of Rhode Island also, which longer than any of the other States endeavored to maintain by law the legal-tender character and use of such money, was often spoken of in consequence as "Rogue's" in place of "Rhode" Island.

[34] To any who may desire to know how far imagination has been drawn upon for this picture, reference is made to the speech of Hon. O. P. Morton, United States Senate, "Congressional Record," vol. ii., part i., Forty-third Congress, First Session, p. 669.

[35] The pertinacity "with which a mind befogged on the subject of money and currency holds on to the delusion that the making and issue of promises to pay, and calling the same money, is equivalent to the creation of wealth; and, vice versâ, that the cancellation or withdrawal, by payment, of such promises is the same thing as the destruction of wealth, and also tends to make money--in the sense of capital--scarce, and interest high, finds many amusing illustrations, which for educational purposes are better than arguments.

For example, we have, first, the assumption of a leading Senator of the United States (already referred to, and which, if not on record, would seem incredible) that because an increased supply of horses and hogs made available to a market make horses and hogs cheap, therefore an increased supply of evidences that capital had been borrowed, used, and never paid, would tend to increase the quantity and rate of interest of loanable capital. A corresponding illustration is also to be found in the case of the member of the Continental Congress mentioned by Pelatiah Webster, who, when the subject of increased taxation for the support of the war was under consideration, indignantly asked "if he was expected to help tax the people, when they could go to the printing-office and get money by the cart-load?"

The experience of the Irish mob also finds an appropriate place under this head, which made a bonfire of all the notes issued by an obnoxious private banker that they could gather, little imagining, as they shouted and capered with wild delight about the fire that consumed them, that, in place of impoverishing, they were really enriching, their enemy.

The following story, also illustrative of the same popular fallacy, passes current in one of the towns of Eastern Connecticut: During the severe financial panic of 1857, an honest country farmer and deacon, who, by virtue of being a considerable stockholder in one of the local banks, had been placed as a figure-head on its board of directors, was applied to by a farmer friend to help him in procuring from the bank a small loan. Knowing that the times were hard, and money scarce, the deacon, although desirous of obliging his friend, did not at once commit himself, but promised to go to the bank, and make his action contingent upon the state of affairs which he might there find. The two friends, accordingly, went into town the next day (which happened to be the culminating day of the crisis, when every promise to pay issued by any bank was, in the general distrust, gathered up and rushed in for redemption); and, while the applicant for the loan waited outside, the director entered the bank to reconnoitre. Passing into the directors' room, and thence behind the counter, he said little, but, keeping his eyes wide open, did not fail to notice the extraordinarily large packages of bills, filling safe and drawers, which, to the annoyance and strain of the bank, had been recently sent in for payment. Seeking no further proof of the financial strength of his institution, he returned to the street, and, informing his friend that every thing was all right, the latter next entered, and confidently asked for his discount. To his great surprise, he received the usual polite answer, that "they would be too glad to oblige him, but that, really, they had no money." "Out of money!" said the deacon, when the result of the application was made known to him. "Out of money! How can they lie so, when I have just seen the safe and drawers full of it? As a Christian man, and an officer of the church, I can't conscientiously be a director and stockholder any longer in such an immoral institution." And yet, if, on returning home, the good deacon had found in his table-drawer a number of his individual promissory-notes, signed and ready to issue, but not issued, he would not have thought himself any richer by their existence, but, on the contrary, would have felt much more comfortable at such a time to know that the notes were all under double-lock security, or, better, if he saw them vanishing into ashes. And yet, in the case of the bank-notes, he couldn't understand why they were not money, to be used at all times and under all circumstances!

[36] Between the years 1860 and 1870, the United States doubled the quantity of currency available for use by its citizens, and yet the rate of interest was as high in the latter year as in the former.

[37] Such were some of the uses finally made of the Continental currency. See Sumner's "History of American Currency," p. 46.

End of Project Gutenberg's Robinson Crusoe's Money;, by David A. Wells