“It happened,” says Agapida, “that this Catholic cavalier, at one time, was destitute of gold and silver wherewith to pay the wages of his troops; and the soldiers murmured greatly, seeing that they had not the means of purchasing necessities from the people of the town. In this dilemma, what does this most sagacious commander? He takes me a number of little morsels of paper, on the which he inscribes various sums, large and small, according to the nature of the case, and signs me them with his own hand and name. These did he give to the soldiery, in earnest of their pay. ‘How!’ you will say, ‘are soldiers to be paid with scraps of paper?’ ‘Even so,’ I answer, ‘and well paid, too, as I will presently make manifest; for the good count issued a proclamation ordering the inhabitants of Alhama to take these morsels of paper for the full amount thereon inscribed, promising to redeem them at a future time with silver and gold, and threatening severe punishment to all who should refuse. The people, having full confidence in his word, and trusting that he would be as willing to perform the one promise as he certainly was able to perform the other, took these curious morsels of paper without hesitation or demur. Thus, by a subtile and most miraculous kind of alchemy, did this Catholic cavalier turn worthless paper into precious gold, and make his late impoverished garrison abound in money!’
“It is but just to add,” continues the historian, “that the Count de Tendilla redeemed his promises, like a loyal knight; and this miracle, as it appeared in the eyes of Agapida, is the first instance on record of paper money.”[5]
“An instrument of military necessity, once created, remains such an instrumentality for continued use for all time; no matter who it may hit, or what property it may destroy.”
It may be also remarked that the island antiquarians did not find any chronicle of any other soldier who imitated Count de Tendilla in issuing “little morsels of paper” to serve as money, and subsequently did not imitate him in promptly redeeming his promises, who found it easy to obtain again the confidence of the soldiers or the people when he again got into similar difficulties.[6]
[1] When the Japanese embassy visited the United States, in 1872, they were seriously advised to create, by some means, a national debt as soon as they returned home, and make use of it as a basis for the creation and issue of currency.
[2] Machiavelli, in his “Discourses on the First Ten Books of Livy,” book ii., chap, iii., in explaining the great difference in the relative growth of the Roman and Spartan republics, relates that “Lycurgus, the founder of the Spartan republic, believing that nothing could more readily destroy his laws than the admixture of new inhabitants, did every thing possible to deter strangers from flocking thither. Besides denying them intermarriage, citizenship, and all other companionships (conversationi) that bring men together, he ordered that in his republic only leather (non-exportable) money should be used, so as to indispose all strangers to bring merchandise into Sparta, or to exercise any kind of art or industry there, so that the city never could increase in population.”
[3] Examination will show that the United States, for one-sixth part of their existence as a federated nation, have been in a state of war; and, for the future, there is no good reason for supposing that the country is to be any more exempt from the vicissitudes of nations than it has been in the past. With irredeemable paper, violation of plighted faith, gold demonetized and banished, in what condition is the nation for maintaining a great national struggle?
[4] In a case often overlooked (Bank vs. Supervisors, 7 Wallace), the United States Supreme Court decided that “United States notes are engagements to pay dollars; and the dollars intended are coined dollars of the United States.” Refusal to pay such notes in coin is clearly, therefore, repudiation.