The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-02-04
FINANCIAL THEORIES.
NICHOLAS KHcxEasucxEay IDEAS Of PAPER MONEY.
TO rHE EDITOR OF THE HERALD.


TO THE EDITOR OF THE HERALD.
The people and the government alike bswildered
and at their wits end on account OF the condition Of
currency and Its prognostcs In general they agree in
ascrbing the present state OF things not to its true
but 10 false imaginary causes and they accordingly
propose violent and desperate expedents . remedy
The cause OF present difficulties Is the exhaustive
export Of our national CON- commodity Of merchan-
disc to pay for the OF imports which permit
and encourage Bat for this cause We have the best
the saisst, the most uniform currency ever known,
p6ssslnx al the requisites Of confidence at hand
and accssf1s ana perfectly adapted TO fuln it, only
onace-that o. facilitating exchanges and payments
But committed the absurd and sultifying blunder
Of making national paper money rsdsemabls in COIN
while we allowed the continued exhaustion Of the con
BY export a. TO render tho redemption impossible.
This absurd, for the obligation TO redeem with
coin added nothing to the safety Of the notes in any
case They were perfectly safe without it The Trea
suy notes represented the power revenues and
good faith Of the government The fixed and limited
amount Of national bank notes represented their value
In national bonds withdrawn from market and held in
pledge BY the government security. II the govern
ment continues solvent and pays its bonds then the
The only OF requiring notes issued ON pledge and
deposit Of the best possible permanent security Ia the
in masses from the vaults OF banks where 1t is expected
to be collected and put up in kegs So long as they
have any left the banks must exchange It at
par Tor their notes, which makes excessive imports
comfortably secure When 1t is gone, the banks
Of necessity suspend specie payments and issue
their secured safe notes freely before. The i'm
pos cheat when there specie in circulation OF
requiring the national banks to redeem their secured
notes with non-socured Treasury notes is ridiculous
cept o Of If there Is any difference
in point OF safety the secured notes are the safest
Under this pretence of being redeemablc on demand
curty they are by the law, which makes them money
and sanctions their circulation with coin at par) the
banks have gone and issued important portion of
the only currency have Specie payments have been
suspended than Ave years Coin is longer treated
as money or currency according to law, but only as
market like wheat and other commodities at prices de-
pending on the proportion OF supply to demand. Yet
while its price in the market may be forty sixty, or one
hundred per cent than its legal value money! Its
legal value is made the criterion and rule o. reckoning
in determining the prices Of all other commodities and
our equivalent legal currency of paper supposed to de-
preciate much below its legal value gold rises In
price above its value as CON- Thus our currency s
treated as merchandise-a speculative, fuctuating,
uncertain commodlty-not as fixed and uniform
measure OF value and rule OF reckoning, determined
and established by law The law Is set aside and dsre
garded We have nothing fixed and settled in regard to
the value. rule and measure, Of our circulating
medium. The lawess theory OF free trade Is extended
from the things to be exchanged TO the means Of
exchanging them. Everything is done by brokers and
Spectators, who FIX the rate for the moment, to be
assumed for gold, for paper and for other things, In
exchange for one another.
The law defines what shall be used money and pre-
scribes fixed and uniform rate st which !. shall pass
commercial its intrinsic value but its eyal value
% currency In like manner II xes and prescrbes tho
legal value represented and secured by bank notes Of
difercn. denominations, and authoTizea and sanctions
thor use equivalent to coin. II makes the egalized
coin Sad paper alike the measure Of vane exchanges
"a Il yardstcks the legal and uniform measures OF
ieng th To scrade the legal money q nation 70 the
level or auctuag commodity Of traffic is az plainly
dirent measures OF length, weight &C., in place Of
tho measures = MORO HIUHoIAs KNIcKERBocKER
Stock Exchange Building.