“My dear Colonel Dick: I have long determined to make public the origin of the greenback, and tell the world it was Dick Taylor’s creation. I think it was in January, 1862, on or about the 16th, that I did so. You came, and I said to you: ”What can we do?” Said you, “Why issue treasury notes bearing no interest, printed on the best banking paper, issue enough to pay off the army expenses and declare it legal tender.” – Abraham Lincoln
Thus was born the “Rag Baby,” a commonly used nick name for the greenback dollar, with which, the North’s side of the Civil War was fought. The rag content of the paper on which they were printed, was so high, that the term “Rag Baby” was coined. The South printed their own Confederate paper money, and they became known as ‘Graybars.’ It had 72 different designs, and anyone having a color printing press, could print Graybars. I have a frame on my office wall of Confederate bills, and they’re now far more valuable than their printed price, which was $100, $20, $10, $5, and even a printed 50 cent piece. Showing the antique value of things, I think the old 6 ounce Coke bottles are worth something, as is probably every old thing, except me.
The North and South, both printed their way through that war, just as America now is doing … without a war. Obviously, as Don’s Law states, “The more of anything there is, the less they will be worth.” the price of anything that are priced in Rag Babies, Confederate Dollars, or U.S. dollars, will go up, because there is not enough income to pay the bills. They’re then printed, declared ‘legal tender,’ the bills are paid, and the ones suffering, are not the causers of the inflation, but the victims of it. Currency priced items, don’t go up in value; just price. This phenomena is known as ‘inflation.’ ‘Inflation,’ is plainly illustrated as the price of Coca-Cola gong from a nickel when I was 39, to today’s price of whatever it may be now. It’s THE SAME COKE! When I was 39, I bought low test gas for a quarter a gallon, and as I write this, it is $3.03. It’s THE SAME GAS! In the Civil War, the number of the North’s Rag Babies, went from zero to over a billion, in four years. The South printed a bit less, but both returned once again, to worthless. Both sides fought the Civil War with un-backed paper money, just as the U.S. fought WW II with un-backed paper money, and in just 3 ½ years, the dollar had lost 50% of its value or purchasing power. Every consumer item doubled in price, but at least we won that war, which was the last one we won!
Lincoln’s Secretary of the Treasury was Salmon Portland Chase, who disliked paper money, but decided to allow it anyway. He said, “I have felt a great aversion to making anything but coin a legal tender in payment of debt. It has been my anxious wish to avoid the necessity of such legislation. It is, however, at present, impossible in consequence of the large expenditure entailed by the war, to procure sufficient coin for disbursements, and it has therefore become indispensably necessary that we should resort to the issue of United States Notes.” “Coin,” then referred to literal gold and silver coinage or currency backed by such, and an equal value metal stored in Treasury vaults.
America printed its way through Afghanistan, Iraq, Korea, Vietnam, WW I, WW II, and other little skirmishes around the world. We print our way through everything, because there are no limits to the amounts of modern day Rag Babies which can be issued, because there are no limits to the debts that can be and have been created by Congress, and the dollars issued by the Federal Reserve. If an alcoholic had unlimited supplies of hooch, how long would it take for him to kill himself? My Dad began smoking Camels as a young teen, and he died of lung cancer at age 63, in otherwise virtually perfect health. RIP. I loved him dearly.
Getting back to today, The Senate has gone home for the weekend, so nothing about the withholding of modern day ‘rag babies,’ will happen. Maybe by the time this is issued on Monday, the flood gates of un-backed by anything paper dollars will be released, and everyone will be happy? Time will tell, but as my column on October 13th inferred, food stamps feed people, and when they began, I simply could not believe that government was giving free food. Supposedly, 41 million now depend on them, and another columnist said that 38 million are Democrats. Did anyone starve before food stamps? Of course not. Did anyone freeze before politicians decided to subsidize heat? Communications? Health? Travel? Whatever else that can be subsidized? They’ll think of something so they can buy the votes.
The current National Debt is over $38 trillion dollars, and the interest is $2.6 billion a minute. In 1964, when the government decided that silver was too valuable to waste it on coins, the silver was removed… the National debt in 1964, was $312 billion. Sherlock Holmes said many times, “Elementary, my dear Watson.” It is very elementary, at least to me, this situation cannot continue until the entire economy collapses, and like the Graybars and Rag Babies, it’s all over, and then, everyone will wish they’d bought inflation insurance of gold and silver, which has always bought anything, at any time.
I admit that I have no idea of the debts of China, the UK, Russia, France, or any other nation but ours. Maybe we’ll go last! Maybe they’ll all go together, and those of us who live in a small town, will be grateful. Whichever nation goes first, second, or 25th, their citizens’ ‘money’ will have become rag babies.
-Don Stott don@coloradogold.com