PAPER CURRENCY. 



BY SIDNEY W. ROWELL. 



[Read before the Albany Institute April 1, 1890.] 

 In a paper which I read before the Institute about one year since, an 

 attempt was made to give an account of the different plans which have 

 been tried for the purpose of making settlements in commercial trans- 

 actions. A list of the commodities which have been used as money 

 was given, and the difficulties experienced in attempting to use sundry 

 commodities as money were noticed. The conclusion arrived at was 

 that gold and silver are the best-known commodities for use as money, 

 but that they fall short of being ideal money; that the world is in need 

 of, and is looking for " perfect money." As was stated at the time, 

 the paper currency question was purposely omitted, because it could 

 not be brought within the time limit put on that paper. 



Some people have an idea that all kinds of financial difficulties can 

 be overcome with an unlimited issue of paper currency; and it will be 

 the purpose of this paper to review the history of paper currency, 

 to call attention to the dangers which threaten a country when the 

 government issues the currency and the amount is under the immedi- 

 ate control of its legislative bodies, and to show how rudderless peo- 

 ple sometimes are when they have to deal with serious financial 

 problems. 



There always has been, still is, and probably always will be a differ- 

 ence of opinion among economists, as to whether it is better to have 

 convertible paper money at all, or do our business wholly with me- 

 tallic money. A large amount of ink, paper and valuable time has 

 been devoted to the discussion of this question. It must be admitted 

 that good arguments have been made on both sides, but neither side 

 baa been able to make it perfectly clear that it is a one-sided question. 



At certain seasons of the year there is need of a greater amount of 

 currency than there is at others. When the cotton, the wool, the 

 grain and other crops are being marketed, something must be provided 

 to make settlements with. Manufacturing enterprises, too, vary in 

 tneir needs, just in proportion to the activity of their business. Then 



