The Sun.
London, England, 1868-10-16 00:00:00

PROBABLE END OF GREENBACK

AGITATION.

( From the Anglo-American Times.)
It must amuse an American who does not care
what the English think or know of his country to
read the news furnished by the correspondents of
some leading journals, and the editorial comments.
The Times and its sleepy correspondent at Phila-
delphia' when the latter deigns to write, and the
former to notice his letters, give a pretty sketch for
the American traveller. The correspondent may
often be seen making " a careful survey of the
field." Sometimes his field is a pure mirage—some-
times it is a political—and again a financial field.
From the traveller's stand-point the writer is the
most curious animal in the picture of his creation,
for he appears like the mastodon, an extinct animal,
disporting himself in an antediluvian world. The
mastodon's last field is the financial, of which he
has just taken " a careful survey." It would be
refreshing to rise from the perusal of his descrip-
tion with such a number of new ideas, were it
not that the ideas only appear new from their very
age. The more we think, the more satisfied we are
that these resuscitated things are very old indeed,
and if the writer had headed his letter " Old Ame-
rica," and described it as the researches of an anti-
quarian it would 'have been appropriate. The
question " the mastodon" has now reached, is that
of the 5-20 Bonds, and whether the interest is to be
taxed. It matters not that the subject has, for the
present at least, been dropped in the United States.
The antique animal supposes that Europe must by
this time be familiar with the controversy, but the
bondholders abroad cannot know what their pro-
spects are unless he tells them. 'these stupid bond-
holders hold the highly erroneous impression that
the Republican party is the champion of good
faith, while the Democrats advocate repudiation.
The truth is, as seen by " the mastodon," that
neither party can be trusted, that the platform of
the one supports what they call an honest pay-
ment of the debt, while that of the other decrees
greenback payment, where coin is not specified.
To show that some leaders in both parties may
agree as regards repudiation, and other leaders
agree on coin payment, he quotes the declaration of
the Democratic Convention of Massachusetts, and
John Quincy Adams's letter of acceptance, while he
shows that there are Republican greenback payment
supporters, by naming Butler and Logan, Morton
and Yates ; and actually reaches a date in August
last, when quoting an utterance of Senator Sher-
man. The correspondent says—" Such of the Five-
twenty Bonds as are held in America are owned
almost exclusively in the Atlantic tier of States,
and were the direct question put to the voters
whether they should be paid in paper or gold, it is
probable that payment in paper would receive
almost unanimous support in West Virginia, Ohio,
Indiana, Illinois, Michigan, Wisconsin, Kentucky,
Tennessee, Arkansas' Missouri, lowa, Minnesota,
Kansas, and Nebraska, the States of the Mississippi
Valley. In all these States put together it is pro-
bable that the aggregate holding of Five-twenty
Bonds does not amount to $50,000,000. On the
other hand, the doctrine of gold payment would
carry the majority in New York, New Jersey,
Pennsylvania, and all the New England States, as
these contain the bondholders. The Government
cannot pay two thousand millions of Debt with
four hundred millions (the total amount) of green-
backs, while the necessities of the Treasury point
more to a loan than to a redemption of the Bonds.
The " museum curiosity" considers it to be im-
possible for the advocates of greenback payment to
redeem the Bonds in paper. Does he not know
that his prophet Pendleton recommends the print-
ing of any amount of greenbacks, and it is as easy
to order the increase of the currency as to pay
the bondholder in it. The correspondent says " if a
decision were made in favour of greenback pay-
ment the United States would be unable to carry it
out." Why, if they decided to pay the debts of the
world, all required would be a few cargoes of rags
to make a sufficient quantity of greenbacks, and the
United States might liquidate everybody's liabilities,
and be very little the poorer ; but whether the
greenbacks would then be worth the rags from
which they were manufactured is another question.
In view of the difficulty he imagines, as well as of
the difference between the Representatives who will
be for greenback redemption and the Senate who will
not, the end, he considers, will be a compromise, in
which the one will sacrifice paper payment en'acing
gold on the bonds ; and the other will surrender their
right to 6 per cent., receiving instead 4 or 5, there-
fore the foreign bondholders may look for a reduc-
tion in the interest as the final result. Here we
so far agree with the correspondent as to think
this probable, and if most peopla did not hold
the same opinion the bonds would be quoted at
a very different price from 74. The lowest pro-
bable rate of interest will be 4 per cent., the
highest 5, but, once settled, we believe the security
will be better than that of British Consols. Ame-
ricans feel sore about this debt, as would any other
people under similar circumstances. Those who
first took the bonds will have made an enormous
profit out of the necessities of the State, and those
who pay, while acknowledging that the investors
have a right to a good profit, kick against a usurious
rate of interest. Every one would be content if the
bondholders sacrificed something, and they would
feel that in consequence of a fair compromise the
question should never be raised again. If the bond-
holders resist, they say, we will then pay them ac-
cording to the strict letter of the agreement—in
gold when shown on the fac'e of the bond; when
not, ins greenbacks. ' The holders of the 10-40's,
hugging themselves on the law which secures them,
are caught on another tack—the taxation of the
interest. These two questions permanently fixed
would make United States Securities the best in
the world, for it is the most secure nation,
the most wealthy in Government property, and
rapidly growing the richest of all communi-
ties. No one doubts their ability to pay, but
the number . of States which have repudiated,
and the agitation kept up against the bond-
holders, have made many doubt the national
honesty, though a careful scrutiny of what the
people really mean and are driving at would set
fears at rest on this point. It must not be sup-
posed that even the greenback redemption men
advocate the repudiation of their just debts. They
regard the bondholders as grasping usurers, who,
like Shylock, have been sold, in as far as all antici-
pated that lawful money, when the bonds became
due, would mean coin ; whereas, unfortunately for
them as for the rest of the community, it only
means paper. Why, they ask, should we make an
exception in favour of these greedy people, who
have already profited so largely at our cost ? The
lenders of gold have been repaid by the borrowers
in greenbacks ; but the bondholders want to lend
in greenbacks and be repaid in gold, unless there
is a contract or law so to decide in their favour,
which is, indeed, making fish of one and fowl of
another. We endeavour thus simply to state the
case, as it is the people's case, as seen by them, as
against the bondholders. It really differs widely
from repudiation, or any intentional dishonesty. It
is easier to enlarge on such a text to a people
staggering under their burdens than to show the
more remote and intricate reasons why it is just
and wise to pay, and foolish, even as a question of
financial policy, to raise the point at all. With
the latter we have at present nothing to do, our
object being, in following " the correspondent," to
show why such asettlement, involving a lower rate of
interest, would not be regarded by the people as
repudiation, but merely as a quid pro quo wherein
the bondholders got more than they gave. The
importance of the point is immense to the foreign
holders ; so important that we hope some of our
cotemporaries will take up this subject in their in-
terest to make it widely known, whereby people
may be guarded from sacrificing their property
under an erroneous impression. Those who delight
in misrepresenting the United States speak of the
contemplated reduction of interest as a robbery,
and this is a fair way of discussing the subject in
the United States, or in a lesser degree in our own
columns, which are chiefly read by Americans, who
understand its true meaning. But the English, the
Germans, the French, interpreting literally what is
said, really suppose that there is a large and grow-
ing party in the United States who strive to re-
pudiate the national debt, whereby distrust is
raised, which induces them in a fright to sell their
securities. We know some who have lost thousands
already from this cause. It is natural for foreigners
to argue that if Congress now deliberately reduces
the interest by a third, that next year they will
knock off another third, when but a single third
will remain to be expunged to cancel the national
debt. They know nothing of how the debt was
contracted ; they are not allowed to see the stand-
point from which a large section regard it ; hence
they conclude that it is from a deliberate and in-
tentional purpose of simple repudiation that they
aro mulcted. To know that there is not the
slightest chance of any further reduction, and very
little chaace of further agitation, wholly changes
the position, and it is in withholding this in-
formation that the correspondents do the United
States a grievous wrong, and materially damage the
value of the bondholders property. Americans chafe
at their National Securities being classed below
those of the Republics of South America, and put
on a par with such empires as that. of Turkey. They
regard their securities as the best in the world, as
they have not only the inclination to pay honestly
which many other nations have, but the power of
doing so, which scarcely any have. Knowing the
honesty of their purpose they feel indignant that
foreigners are not aware of it likewise, but they
overlook the fact that the foreigners have a place
among the bloated" bondholders, but no place

among the oppressed taxpayers, and only see the
question as represented by one side. This in the
present phase of its development is injurious to the
bondholders themselves, and it is time that Euro-
pean papers should explain what it is that makes
men like Pendleton and Sherman view the subject
in what appears to them a dishonest light. If
the citizens of the United States were better informed
about finence they would not have raised the ques-
tion at all, but have quietly submitted to the bond-
holders' hard bargain. But as they have raised it,
and as there is a flaw in the contract, the best thing
now is for those who hold the securities fully to un-
derstand the subject, and not be scared out of their
property by the " bears" who desire to profit at
their loss.