Before
long he was asking Congress to allow a further issue of what he
had previously called "fraudulent" money.
The answer to the question whether Chase should have stuck to his
principles and resigned rather than acquiesce in the paper money
legislation turns on that other question--how were the politician
and the financier related in his make-up?
Before Congress and the Secretary had finished, $450,000,000 were
issued. Prices naturally rose, and there was speculation in
gold. Even before the first issue of paper money, the treasury
notes had been slightly below par. In January, 1863, a hundred
dollars in paper would bring, in New York, only $69.00 in gold; a
year later, after falling, rising, and falling again, the value
was $64.00; in July and August, 1864, it was at its lowest,
$39.00; when the war closed, it had risen to $67.00. There was
powerful protest against the legislation responsible for such a
condition of affairs. Justin Morrill, the author of the Morrill
tariff, said, "I would as soon provide Chinese wooden guns for
the army as paper money alone for the army. It will be a breach
of public faith. It will injure creditors; it will increase
prices; it will increase many fold the cost of the war." Recent
students agree, in the main, that his prophecies were fulfilled;
and a common estimate of the probable increase in the cost of the
war through the use of paper money and the consequent inflation
of prices is $600,000,000.
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