University Studies 



Vol. IX JULY 1909 No. 3, 



I. — Financial Legislation in Principle and in History 



BY W. G. LANGWORTHY TAYLOR 



Governments have sought to regulate and to monopolize not 

 only the money of communities but also their credit. It is note- 

 worthy as a further proof of the dominant position of credit in 

 the financial world, especially as compared with money, that, not- 

 withstanding the efforts of governments to control the credit sys- 

 tem or to monopolize it for the selfish purpose of potentates or of 

 parties, they have been able to break down, destroy, or to assimi- 

 late and absorb but a small part of the credit activity of the com- 

 munity. In Oriental countries, it is true, enterprise is throttled 

 by taxation, which is the surest means to that end ; but in a coun- 

 try where credit is well developed, the government is forced to 

 face the problem of taxation in a spirit of scientific impartiality. 

 The highly developed credit system of the United States will force 

 that government into scientific methods of taxation. 



Nevertheless, precisely through the channel of taxation, civil- 

 ized governments have learned to use credit in a way which is 

 especially open to the abuses which we have seen inhere in a 

 period of highest expansion, and thus to weaken business credit. 

 Governments seek to pay their expenses, or rather to obtain credit 

 for their debts, by the issue of paper money. Probably no gov- 

 ernment paper money was ever issued which was not expected 

 to be redeemed in full value at some time, although that time 



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