The Sun.
London, England, 1868-02-20 00:00:00

THE SUN, LONDON, THURSDAY EVENING, FEBRUARY 20, 1868

EXPANSION AND REPUDIATION.

There is no disguising the fact that public opinion
is undergoing a change in the United States on the
question of redeeming the National Bonds in green-
backs. When first openly advocated by Mr. PEN-
DLETON, the cry of indignation was so loud that
many believed it was national. The truth is, that
the cry came from the holders of Bonds. On them
the proposition acted immediately, for they were

.. _
directly interested ; on the mass it acted slowly, for

their interests were indirect, and therefore more
remote. Mr. PENDLETON'S arguments were torn

to pieces, and cast contemptuously to the winds.
When General BUTLER stepped into the ring as
the Republican champion of Repudiation, and was
followed by THADDEUS STEVENS, notwithstanding
the severe punishment inflicted on his predecessor,
many began to fear that these practised politi-
cians saw a deeper current than they detected.
Time is, we fear, showing them to be right ;
for the indications arc too clear to be mis-
understood. On the 27th January General BEATTY,

the Republican candidate, was elected for the
Eighth District of Ohio, lately represented by Mr.
HAMILTON, who in December was killed by his
insane son. General BEATTY pronounced in favour
of greenback redemption, while his opponent declined
to commit himself. In October, 1866, the Repub-
licans carried the District by a majority over 1,800,
in 1867, by only 200, showing a strong Conservative
reaction ; yet working against this, the Republicans
have suddenly obtained a majority of a thousand,
and the impression is that the West will elect no
candidate, whatever be his political principles, who
does not pledge himself to greenback redemption.
Mr. WILSON, of lowa, spoke in the House in favour
of this measure, adding another to the champions
of Repudiation. Parson BitowNLow wrote to the
Republican Convention at Nashville, advising a
declaration in favour of paper payment, and
although the Convention resolved that the national
faith be kept inviolate, and the Bonds paid in gold,
still, it is a sign of the times, when men like the
Governor of Tennessee throw themselves so ear-
nestly into the ranks of a party. Mr. INGERSOLL
has made a direct attempt to increase the volume of
paper money by the issue of 45,000,000 fresh
greenbacks—thus undoing the work of Mr. M'CUL-
LOCH, and again bringing it back to V 00,000,000.
Senator THURMAN, of Ohio, in his speech at Mans-
field, said, as to "these Five-Twenty Bonds, amount-
ing to about two thousand millions, it is simple
impudence in any man to pretend that this Go-
vernment ever promised to pay their principal
in gold. The interest we did promise to pay in
gold, but the principal never in anything but
what is the legal tender of the country." As-
sociated with this question of an increase in the cir-
culation is that of redemption. The premium on gold
must hinge on the volume of paper money, and in
proportion to the increase of greenbacks will be the
difference between their nominal and real values,
or, in other words, the premium on gold. Were it
not for the barometer which the gold-room keeps
before the eyes of the people, the inducements to
stray into a fool's paradise would be even greater
than they now are. Money is plentiful at the chief
American marts, stocks and shares are advancing,
and the market is buoyant in expectation of the old
stimulant being applied, but gold stea lily rises.
the greater the difference iu value between it and
the paper money in circulation, the greater the in-
ducement to redeem in the depreciated tender. If
the people resolve to affix on the nation the stigma
of dishonesty, they are not likely to neglect the op-
portunity of benefiting by it as largely as possible.
There can be no object in discussing paper redemp-
tion if paper closely approximates iu value to gold,
and if the intention were to secure for the United
States within a short period a return to specie pay-
ment, it would be superfluous folly to discuss green-
back redemption. The question of inflation is one
to be resisted now, or never. Once a family gives
way to the temptation of meeting a temporary
pressure by borrowing from capital, on the return
of the pressure the same remedy will be applied,
and it is then on the high road to ruin. This simple
expedient brought the Railway interests of Eng-
land into collapse, and this economic law will do
for a nation what it does for a railway company, or a
family. But the road to ruin will be even smoother
in the ease of a nation; for the ruin will not in reality
be national, and only the bondholders directly suffer.
Let it be decided that the Five-Twenties are to be
redeemed in currency, a direct gain then accrues to
the Union, from making that currency as cheap as
possible. If it be annihilated in value—the Debt
is wiped out ; if it be depreciated 100 per cent.,
half the Debt is gone ; therefore a premium i 3
offered to the Treasury to depreciate to the lowest
point its own promises to pay. When the next
stagnation in trade occurs, all parties will turn for
help to their paper mill ; the aid required by specu-
lators will there be found, and if the currency be de-

preciated, so much the better, for in that proportion
will the National Debt be obliterated. An odd story is

told by the New York Nation, which gives another
view of the subject. Rhode Island, at the close of
the war of Independence, was divided into specie
and paper-money parties. The latter, backed
by the exigencies of the moment, gained con-
trol of the Government, and a paper money
bank was established. Every effort was made
to give the bills loaned, an intrinsic value, and
heavy•penalties were enacted against persons re-
fusing to receive them at par. Notwithstanding,
not only were the bills refused, but traders closed
their shops and merchants their offices, preferring
not to do any business than to take them, and dis-
loyalty became so rife that another forcing Act was
necessary. These the Judges declared void, and
were summoned into the presence of the Govern-
ment to assign their reasons. Though bills were
plentiful, money was so scarce that barter was the
only mode of trade, and but eight months after the
establishment of the bank, one-fourth •of the debt
was directed to be paid off in bills received for
taxes, this paper having already depreciated 500
per cent. The holders of Government Securities
were required to present them within six weeks,
and receive five shillings in the pound thereon or to
forfeit that amount, interest to cease immediately.
[he Judges were changed, and another quarter of
the debt ordered to be paid as before, when the
bills of the State fell to eight for one. They c3n-
cinued to depreciate until the neighbouring States
prohibited the trial by their Courts of any suit for
debt brought by a citizen of Rliode Island ; and,
finally, disloyalty triumphed, the Legal-Tender Act
was repealed, and the bills settled at fifteen for one.
Rhode Island was then aided by the vigorous patriot-
, ism induced by the war, and the State had a stringent
penal law against speculators. Strong efforts were
made to induce the other States to follow the
example, which luckily failed. The same arguments
were used then as now, and a far greater necessity
existed for currency to stimulate industry. Rhode
Island was the only State 4, which attempted to
alleviate the poverty caused by the war by furnish-
ing ready-made money to the debtors," and her
reputation, unenviable then, has not at all improved
with the lapse of time. The Nation calls attention
to the historical fact, that every precaution was
taken by Rhode Island to prevent depreciation
which human ingenuity could devise. The Legal-
render Act was penal ; payment secured by mort-
gage ; yet, in three years, fifteen for one was the
current rate. " This was a fact which meant so
much that churches excommunicated members for
attempting to pay their creditors under the legal-
tender privilege. It meant stagnation of business,
tumult, danger within and danger without ; in a
word, it meant all that can be meant by a resolu.
lion on the part of a little more than half a commu-
nity not to pay its debts to the remainder ; and the
difference—between this condition of affairs and that
in which a man who measures six feet declines to
pay the bill of a m►n who measures five, relying
upon the difference of measurement rather than
any equitable defence —is difficult for any one desti-
tute of a very legal training to sec." Referring to
the present effort in the west, the Nation remarks :
" GOD has not worked a miracle, and is not going to
work a miracle, for the benefit of the West, though the
prairies were twice as big, and the coal-fields twice
as deep ; and the West may rely on it, it will
yet come full butt against the laws of nature, and
find it a skull-cracking-experience." :That the
price of Government Bonds keeps up may, to a cer-