Purchase Money Was Borrowed: In April 1803 he offered the whole territory to the United States for $15 million. President Thomas Jefferson at once accepted, though the US Constitution contained no provision for acquiring territory in this way. He said later that he had 'stretched the Constitution until it cracked'. At a stroke he doubled the size of the United States. The purchase money was borrowed from English and Dutch bankers.
)ain and Portugal between them con-lered all South America except the Gui-ias, and ruled their colonies for nearly 300 :ars. Isolation from Europe led many ilonists to desire complete independence, heir chance came when Napoleon's tem->rary conquest of Spain left them very uch to their own devices. The wars of independence began in the :gion of the Rio de la Plata in 1806. The itstanding general of this campaign, Jose : San Martin, liberated Chile in 1818 with ic aid of Bernardo O'Higgins. San Martin ent on to invade Peru in 1821.
However, by 1856, a lieutenant colonelcy, which by law was fixed at £4,500, was selling for £7,000, and when Edward Cardwell undertook to head the Ministry of War, the first of his reforms was to abolish this system whereby money not merit was the determining factor for men to lead the armed forces. The warrant was strenuously opposed, particularly by the military, and would certainly have failed if the Franco-Prussian War had not pointed out the new type of efficient German officer. The government agreed to reimburse officers the amount of their purchase, the entire cost coming to £7 million.
Until 1944, when all purchases of discharge were rescinded, discharge by purchase in the United States Army and Navy could be secured in peace times by enlisted men at the end of one year's service under normal conditions. The prices were:
The rate of purchase was correspondingly less with longer service.
GRESHAM'S LAW, gresh'amz, in economics, is usually stated as "bad money drives out good." The law stems from the fact that money has a value both as money and as a commodity in the open market. The former value is set arbitrarily by law and is relatively fixed; the latter is determined by supply and demand and varies from time to time, "Good money" has a higher value as a commodity than as money and will disappear from circulation.
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