The co THE MACMILLAN COMPANY ATLANTA SAN FRANCISCO MACMILLAN & CO., LIMITED LONDON BOMBAY CALCUTTA THE MACMILLAN CO. OF CANADA, LTD. TORONTO IN THE UNITED STATES WITH A BRIEF DESCRIPTION OF THE BY A. BARTON HEPBURN, LL.D. " CHAIRMAN OF THE BOARD OF DIRECTORS OF THE CHASE NATIONAL BANK NEW YORK CHAMBER OF COMMERCE, AND EX-PRESIDENT OF THE NEW YORK CLEARING-HOUSE "It is only by a sound system of Money and Banking that a PREFACE FOR three centuries this continent has been inhabited by white men. The financial experience that accompanied the development of the territory now comprised within the United States, from an aboriginal wilderness to its present proud position in the sisterhood of nations, contains much that is crucial and many severe lessons. In the beginning there was a period of barter and trade during which commodity paid for commodity. It frequently happened, however, that a man wishing to purchase goods did not have for exchange anything which the vendor desired; this, and the difficulty of making change, inspired the colonial governments to provide a currency and to give it a fixed value in trade and taxes. At first articles of real value that would go without a government fiat were selected, such as beaver skins, musket balls, corn, etc.; later, printed money with government fiat was resorted to, in many cases with unfortunate results. At the very threshold of our existence our forebears, crudely, but nevertheless conclusively, illustrated the superiority of a currency unit which possessed commercial value and would circulate because people wanted it, over a currency which represented the ipse dixit of government. All of the original thirteen colonies had the same environment and the same experience. Printing money was very easy and seemingly inexpensive, since it avoided taxes at the moment. It was in consequence carried to extremes, depreciated and was largely repudiated when it came to final redemption. This currency suffered the vicissitudes inherent in its nature, precisely as did the French assignats under John Law. The Continental Congress duplicated the experience of the colonies with |