Saint Paul weekly Minnesotian. [volume] (Saint Paul, Minn.) 1858-1859, 1859-03-26

Reply Of J. Jay Knox, TO the Conmu-
nicssion OF J. W. Norths on sne ""
rsncy Question.
ST.. PAUL, March II, 1859.
Nv North, Esq.,. Heident Of M""sep0'"
eed Cedar Valley Railroad Company:
DEAR n:-In an article printed IN the
MrxNEsor1AN on the 18th instant, we s'a'eo III
substance that good currency always CON-
tanned the two requisites OF safety ana con-
vertbiitv. That much of the currency OF ILL.,
pois and Wisconsin really had no place Of re-
demption, but was received throughout the |
west because it was generally believed that
the securities could be sold at any time on the
Stock Exchange in New York, and the bill
holder receive in specie the amount Of bank
notes in his possession. We stated that in
order to give the people confidence in the new
Minnesota currency, the Companies should
not at first receive from the department over
seventy-five cents on the dollar and that it
ninety-five cents was received, arrangements
must be made to redeem the currency at some
central point, at . fair rate, or that it would
soon be at discount. We do not know how
we could have expressed an opinion with re-
gard to the issue of the new currency, tnat
would have been more moderate than this
and we very much doubt whether you your
self could propose any plan which would be
so satisfactory to your own Company, and at
the same time give to the people fair degree
Of safety. In the MINNssoT1AA Of to-day, in
your reply, you do not question the policy
proposed with regard to the safety or CONVEX.
tibility of this currency; but rather discuss
the value Of Gray currency, endorsed by us,
as compared with State Bonds, endorsed by
your Company. It is true, that at one time
we endorsed twenty-five hundred dollars of
this currency, and we may have had at one
time as much as fifteen hundred dollars in cir
culation, though we are confident we never
circulated IS much as this even at one time.
That we have been "greatly benefited by
this issue, we do not believe. On the contra
~, we are satisfied that the issue of that $4,000
Of currency was bad policy, and did us more
injury than good. We expect always here
after, in answer to suggestions with regard to
good currency, tohave as now this argument
of "Gray money" presented for our consid-
Grafton, as if that was the end of the contro-
versy. Your opinion of that kind of curren-
CT, as expressed in yourletter, is as high per-
haps as our own. The whole amount of cash
capital paid in, of the Minneapolis and c. v.
r. R. Co., as We are informed, is less than ten
thousand dollars We do not think, there
fore, that our estimate of our endorsement is
Every high" when we say that it is certainly
as good for $4,000 as the endorsement of your
Company for $1,250,000. We are opposed
to the issue of any kind of currency that is
not well secured and readily redeemed, and
whether endorsed currency is good or bad, it
has nothing to do with the subject.
If the bank department, by depreciating the
Bonds, disgraces them, then it has already
done so in fixing the rate at ninety-fve cents,
instead of par. The rate being fixed at nine
ty-ive cents, we cannot see how the Bonds
could be disgraced if the Cedar Valley Com
pany should insist on depositing and receiving
only seventy-fve cents. On the contrary, we
are of the opinion that the value of the Bonds
would be increased in the exact ratio in which
the public confidence would be increased in
the currency issued.
We are in favor of the issue of currency at
rate not exceeding seventy-ive cents, be,
cause we believe it will not receive the conf.
dence Of the people at home, ifissued at high
er rate, and because it will not be received ir
the neighboring States, nor for freight upon
the river, unless it is received with confidence
at home. The Banking Law requires tina,
when Bank is closed up, the Stocks shall bt
sold in New York city, at auction; and you,
own experience recently in New York viii
certainly satisfy you that the Bonds would
not sell at higher rates than that.
You suggest that we are endeavoring t.
depreciate the Bonds in order to buy them al
lower rate. You are certainly misinformed
as we have neither proposed to purchase, mol
authorized any person to purchase these Bond!
for US at any price neither have we propos
ed to light the currency and the law unless
ourselves or our associates succeeded in get
ting the bods." 1t very evident to any one
that if we proposed to buy the bonds at 70
cents we should not insist on their being re.
ceived at the Bank Department at IS cents
instead of IS cents thereby preventing our
selves from having the use of 20 per cent o
Bonds.
We do not deny that if we were buying the
bonds we should try to buy as low as posi-
BILE, and unless we are misinformed many O
the Railroad contractors in Minnesota coult
sell at so cents and then realize ..handsom,
profit on their work.
Your own Company together with the Tran
sit and the Southern Minnesota are about t.
issue not less than one million of dollars O
currency all based on the same kind of secu
rites and the whole amount they will be emit
tied to issue is over three million of dollars
None of the bonds have ever been sold as
high as IS cents. In your transactions you
have taken payment in the very currency is
sued on the bonds themselves and have dis
counted the interest for one to two years il
advance, thereby showing the faith of tn,
purchaser in your ability to pay that interes
and making the present cash value not ovel
80 cents; and you well know that 80 cents
could not be borrowed on any amount of then
as collateral seccrity either in this State Of
any part of the United States.
We assure you that it is for our interest to
receive. this currency, and We shall continue
to do so as long as we can without great risk