Nequa; or, The Problem of the Ages

by Alcanoan O. Grigsby; Mary P. Lowe

Norrena broke in upon my reverie by asking:

"What is it Nequa, that so absorbs your attention that you seem to be utterly oblivious of the presence of this large assemblage of teachers from all parts of the country to talk over the history of the olden time when 'wealth accumulated and men decayed?' Have you forgotten what I told you last evening? Oqua will report the lesson from the Transition Period in English for you and you can afford to give some attention to your old friends, Iola, MacNair, Polaris, Dione and your comrades of the Ice King."

I looked around and found that while I had been musing, our party had all gathered near me without attracting my attention and I said apologetically: "I must have been dreaming."

"Then you were dreaming with your eyes wide open," said Oqua. "I noticed that you seemed to be unusually absorbed. What were you thinking about?"

"I was pondering," I replied, "how it was possible that this country could ever have been cursed with poverty as the normal condition of the masses of the people while the few were rich beyond the dreams of avarice, and held those masses bound by fetters that they could not break."

"It is now time for the exercises to commence," said Norrena. "I will explain the mystery in my address, at least so far as the leading factors are concerned, for in its entirety it is indeed a long and ghastly picture of human ignorance on one side and human greed directed by a morally perverted human intelligence on the other."

The chairman called the meeting to order and stated that the first thing on the program would be an address on the Transition Period, by Norrena, the Continental Commissioner of Education. Without extended preliminary remarks, the speaker opened the discussion of the question under consideration from which I condense the following from Oqua's report in English. Yet notwithstanding my short residence in the country I believe that I could have given the gist of the address myself without any assistance.

"I need not," said the speaker, "enter into any lengthy explanation before an institute of teachers, as to how our ancestors under the old civilisation exchanged the products created by their labor for products created by the labor of others, by the use of a law-created medium of exchange called money. Neither need we trace the history of many kinds of products and devices which were used in different ages as a medium of exchange, such as cattle, slaves, shells, tobacco, the skins of animals and certain stones and metals. These things are only of interest to the antiquarian. It is enough to know for our present purpose that money had originally been devised as a substitute for barter, and marked the first step towards the establishment of a system of exchanging products which required the exercise of a higher order of mental faculties. During the early part of the Transition Period, gold and silver were the exclusive materials from which money was coined, except for sums of only a few cents, when the so-called baser metals were used. As the supply of gold and silver was not equal to the demands of business, banks were established to issue notes to circulate as money with the consent of both parties to the exchange. These notes were made redeemable in gold and silver on the demand of the holders, and at frequent intervals the banks failed and the people lost the wealth which they had exchanged for the notes. This was a transfer without compensation, of the actual values created by the labor of the people, to the note issuing power, and this process, oft-repeated, laid the foundations for many colossal fortunes.

"In this connection, it may be well to note that in times of great public danger when the metal coins disappeared from circulation, the government exercised the right to issue a legal tender paper money to meet the deficiency. It served all the purposes of gold, and often in the midst of adversity and disaster brought great industrial prosperity to the people. But when the danger had gone by, strange as it may appear, the government funded this legal tender paper into government bonds, payable, interest and principal, in coin. This process of converting the debt paying medium of the country into an interest bearing debt that must be paid in another kind of money which had been hidden away by the more wealthy in times of danger, was the foundation of the great bonded debt of this country which was established during the Transition Period. This bonded debt was made the basis of a national bank currency for the redemption of which, at first in legal tender paper and coin, and later in gold, the people as debtors to the banks were in the last analysis responsible. In other words the national bank currency derived its sole value as a reliable medium of exchange from the fact that it was based on the public credit, and this public credit belonged to the people, but the private banking associations got the benefit for the private gain of their stockholders, and the service rendered, cost the people many times its worth.

"During the Transition Period in this country the people had three kinds of legal tender money, gold, silver, and paper, together with the national bank notes which were a legal tender as between the people and the government. At the close of this period, silver coin, and legal tender paper were made redeemable by the government in gold, on the demand of the holder; and all deferred payments were made payable in gold on the demand of the creditor. The great bulk of the business of the country among the people was transacted by the use of silver, paper and bank notes but the holders of these forms of currency could demand gold in exchange, and if for any cause the government failed to collect enough gold from the people to meet the demand it became the duty of the Secretary of the Treasury to sell interest bearing gold bonds to meet the deficiency.