The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1866-01-06
What has Deprecated the Currencyp
To the Editor of the Press:

eSAASi Nhtl1 ebCOOI vi S5ICCAJdCAo, dHu oiiS
compound interest notes, which keeps up the
price ofgold at about Las premium. III Now
if there was any specific virtue in this lesA
tender clause of the government money,
why did it not prevent the advance OF goid 10
2.S0 premium? and, it being there, why dlu 1t
not prevent its fall to 1.45, or even lower than
that, to 1.22 1-2 in June 1857 Ii 1t could not
keep the price of gold up or down then why
should it keep the Price up now? l2.l For
these legal tender notes were In circulation
then, as now, and it took just as many fthem
to buy gold as il did of bank notes. or nation
al currency. Now, ii they had possessed any
power " control the price of gold, they would
have commanded a high premium, which is
not the case. $3.50 Avn. .y.,, ,..s-
A gaia, oeore the suspension of specie pay
ments, when there was no government cur
rencJ, bank notes paid debts the same as gold,
andyet they had no legal tender clause attached
to them. 1t was not then by virtue of any such
clau5e, bd5 because they were redeemable in
specie at par, that they answered the purpose
of coin. [3. Now, the moment that govern
ment suspended specie payment, and issued
paper clf ency, that currency was an inflated
one, because not redeemable in specie; AL
anu IG ~ 5le amount OF this currency and not
the legal tender part of it, which removes us
farther from the resumption of specie pay
ment, in proportion to its volume, and the re-
peal OF the legal tender feature of the currency
in question would no more affect the curen-
cy, than man could change ms personal
identity by taking off his coat lie would be
the same man still. Isl But you cannot legal
ly repeal the legal tender portion OF these le-
gal tenda" and compound interest treasury
notes. [6.l 1t is true, as you say, the govern
meal PAD its deoG, IA Solu, but Llen god was
exhausted, and government, through Congress,
then said to its creditors, our gold is gone we
have no more to pay you; but we will do the
next best thing for you we can; we will give
you three hundred millions OF our promises to
pay; viz, greenbacks to be issued as needed;
and we guarantee they shall be receivable for
all home dues, Except duties on imports > in
stead of gold and silver, and this guarantee
was as much a part of the contract, as the
agreement to pay the face of the notes, when
the government was able. And so also, of the
compound interest notes issued Afterwards
And should Congress repeal the legal tender
provision, it would be ex post facto, and void.
will admit that could, and should Congress
repeal it, it might raise the price of gold, but
not depress it; and in this way; yindictive
and grasping creditors might refuse to, take
payment OF their debtors in paper, and exact
the gold. And should many such debtors be
able and willing to buy gold, and avoid law
suit, they would come into the market as pur--
chasers and thereby raise its price. AS the
government is not likely soon to redeem its
currency in gold, there seems to be but one
remedy left to accomplish specie payment,
and that is, withdrawing such an amount of
legal tender notes from circulation, as will
bring us to a specie basis; giving in exchange
therefor its bonds, bearing interest, and pay
able at a future day. Automatically, the
amount can be easily determined. $700,000,-
900 of paper currency, at 81 per cent discount,
will purchase $4S3000,000 Of coin, leaving
difference between the two values of paper,
and conn., of S217, 100000, to be withdrawn
III But it would probably require far less
amount than SPIT 100000, to be withdrawn
from circulation, for when the process is COM
menced in earnest, and the public is satisfied
that the resumption of specie payment is a
thing certain. gold will come out for sale from
many quarters, where it has been boarded up,
and its price will rapidly depreciate. Even
many an old stocking containing boarded
wealth that Santa Claus never dreamed of in
his palmiest days. will pour forth its contents
to swell the golden tide. r q bra DIT.
H. This candid reply to the editorial to
which it refers, though communicated by a
gentleman of this city, was written in and
sent by mail from Chicago, whittier the writer
had gone on business. This accounts for the
lateness of its appearance. 5ta 81 5gl Aihat
1t is proper to state here that we never con-
tended the legal tenderact, Independent Of the
iyTedeenaabIe character of the paper made le-
gal tender, had the effect to which our CORE
III During the war gold fuctuated, going
down to % 1-2 and up TO 1.S0 premium, and
this, as has been heretofore shown, was owing
to speculation, the uncertainty and doubt
hanging over our government prospects en-
ablng the operators in gold to depress or ele-
vate it at will. A Union victory, Frightening
up the prospect, would bring gold down by the
run, while Union reverse, with its gloom
and doubt and uncertainty, would enable the
spectators to run it up to a fabulous figure. 1t
was not the legal tender clause, or the volume
of paper money, or both combined, that caused
this auctuation, but the spectators, taking adj
vantage, as they could and did, of the doubts
and uncertainty in the public mind to which
we have referred. When peace came gold
gradually settled to about 45, speculation in
gold ceased, the occupation of the gold specula-
tors departed, and for many months there has
been very little fuctuation; so that we may
regard As per cent. as about the real difference
between an irredeemable paper forced up to
par by being made legal tender, and the pre-
cious metals which need no forcing process.
[3.] Precisely ;and but for the fact that they
were convertible at the will of the holder into
gold, they could not have been used to pay
debts at all, unless at a discount Don't UT. !"
perceive that paper money, thus redeenaabIe,
needs no legal tender act to make it current,
or to make it answer all the purposes IF bust
ness? II it would not pay duties at the custom
house or debts abroad, it could be converted
into something that would fulfil those purpos-
al. Precisely what we have said IN an arti-
Gle on the volume cfthe currency, in the Press
ofThursday morning. 'i1 --' A''- 'l'l 81
ISL Here is just where at" makes a fatal
stumble. The effect of making irredeemable
paper legal TENDER is to give it false or fic-
titious value. 1t forces a par value upon it,
and compels creditors to receive a piece of pa
per actually worth only sixty nine cents for
one hundred cents. Paper Is thus made the
standard of par vattes. Abolish the legal
tender act and at once gold and silver become
the only standard of par values, and they will
no longer be quoted at premium, but paper.
UiU be quoted at a discount. Every quota
ton, and every attempt to pay debt or to
make a purchase, viii show upon its face the
fact that the paper is an inferior and depreci-
ated currency. If man wishes to pay a bill
or a note of$10O, he will have to do SO in mon
ey worth its face, orhe will have to use S145 of
this deprecated currency. When few years
since certain banks in this State attempted to
ignore the Suffolk redemption system in Bos-
ton, and redeem their bills in coin only at their
own counters, they found their bills discredit-
ed; the banks refused them, merchants were
suspicious of them, they would pass among
business men only at a discount of from three
to five per cent, and even so small discount
as this forced those institutions to come into