The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-02-19
Several hundred millions Of dollars for our over.

INSTEAD OF adopting this simple, convenient and
economical plan. bonds were made in the usual
FORM bearing six per cent interest in gold. and
payso' en ISL and were .Gd for per
OF principai and interest through this mis-.
take of the Treasury, since the commence
men. o. , tas war and up TO the LIST of
nous sum Of money. And who has been
benefited by this great blunders Not the soldiers,
sailors, FARMERS, merchants, mechanics, or other
induslrai classes, but the dealers in government
bonds, and those who are now calling upon the
people TO keep quiet and continue to pay ten per
cent per annum on the public debt. am glad to
know that you are now anxious to nave this great
mistake corrected by Congress as soon as possible
The REQUISITES OF THE BEST CREDIT.
There ID no mysterious or hidden property in
the terms money, currency, credit, &c. Credit in
all ITS forms like other property, is subject 10 the
greatlaw OF supply and demand, and this causes
fluctuations in the price OF every article off red in
market overt. One thing our statesmen should
understand. when they attempt to control our
finances, They must follow the rule observed by
all mechanics, and that is, when they wish
to obtain tie highest price in the market
they must furnish the best article for sale.
They should therefore examine carefully and
understand what constitutes the best credit The
security offered must be g0d, well and universally
known and easily convertible into any other thing.
These are the indispensable prerequisites OF the
best credit. Any one Of these being omitted
lowers its market value. A credit may be good,
but not generally known, and it may be good and
well known, but not convertible at pleasure.
Ihe credit we propose Is perfect credit. All
the qualities Of the best credit be found in it.
And such credit can injure public interest
Our Congress have now the power to make such
credit that can be made to take the place of all
our imperfect credits, and should not this power
be exercised FOR the benefit OF the taxpayers when
it viii SO largely benefit all the great producing
interests OF our country?
EFFECT OF TIE PROPOSED BONDS ON sPEciE PAY
MKNTs.
md in ,so late sill he
opposed by many persons besides those who are
interested III our ten per cent bonds, because they
will honestly tear that specie payments may
not be speedily resumed il these proposed bonds
are created legal tenders" Although they we'll
know that the rate OF interest and the exemption
OF them from taxation when added to the illegal
tender will prove sufficient to float much larger
amount Ut capital among the thousands vi our
business men n our n eat Western country. As
this will be the only source OF dlsnterested Oppo-
sition that Will be openly proclaimed against this
great measure, It will be proper Tor me to show
that good convertible securities, whether govern
ment or bank notes, have not and will not prevent
the resumption Of specie payments.
Heretofore suspension OF specie payments BY
our banks has been caused by want Of public
confidence in the solvency of these institutions. A
sudden panic such ~ occurred in 1857, caused by
the failure OF the Ohio Life aud Trust Company,
creates demand upon the banks for specie. And
as the obligations OF these corporations are in
many instances ten times rs great as the amount
Of specie held in their vaults the banks are CON-
PEELED 70 suspend. In such cases the people al.
ways hoard gold until the panic subsidies and they
become satisfied that the banks are solvent. And
thus il has become the settled and fxed opinion
OF the people that when our banks suspend specie
payments 1t is because the credits Of these nstitu-
tiOns are too much extended. Hence the public
have patiently allowed ali their material interests
to be injured by . contraction Of bank obliga.
tons and credits, to bring about q return to
specie payment. When the cause Of suspension
was an over issue Of bank credits then the
proper course WAS contraction or liquidation OF
such surplus credits; but the suspension that
now exists has been produced by no such cause,
and. therefore, contraction would do no good, but
great deal Of injury to the country. When the
banks and Sub-Treasury suspended payments in
specie there was no demand for gold by the people
for the bills Of the banks. No panic or public
not doubted. No wish was expressed by the
people or attempt made to cause the banks 10
contract, aud no one up to this time has expressed
an opinion that the bank issues were 100 great or
that excessive credits produced the suspension.
These institutions had met so promptly aud patriot
icay the calls OF the national Treasury for aid that
they were quite as much in favor with the people
after as before the suspension. Ills suspension
was suggested by the Treasury Department and
acquiesced in by the banks. The ma ayers of some
OF these institutions did not fully understand the
extent OF the Indebtedness OF our merchants to
Europe or the untrieudly feeling OF the government
and bankers of England that was afterwards made
manifest to every American.
The immediate cause of the suspension was
L n,
which were depicting our banks OF specie, and
would have take n every dollar Tor export had not
the banks suspended. This cause was so patent
at the time and since that no person has had the
temerIy To deny 1t or call the TACT in question be.
fore the people. This foreign demand for ship
ment has continued, with some fluctuations, from
that time to this, and the premium IS greater this
day than it was SIX months after the suspension.
The demand for specie and exchange has been
greatly promoted and intensified by our mer-
chants, vino continue to import from Europe
quite as much Gas the Custom House shows after
the crops OF cotton cea ed TO flow TO Europe as
they had done when two hundred and d ty mil
lions Of exchange per annum for cotton was pass
ing through their hands. Thus every year the
and the price of gold AID exchange
rose, Notwithstanding our export of pro-
duce, including several hundred millions
Of dollars in specie. And this demand still con-
port last year fifty-o millions in gold, although
our receipts from California were only twenty
eight millions. As our supply of the precious
metals is not equal to the demand for export, the
price OF specie must remain high.
Exchange on Europe since 1861 has iuctuated
with the currents Of export and import, or supply
and demand, and eventually rose to 200. Ibis
enormous premium would have put Gu effeciual
stop to impertations II the laws OF trade had been
left undistrbed 10 recty the balances by so large
q premium. But at this time the Treasury inter-
posed and relieved the importer from the penalty
he had incurred. An agent of the Treasury was
sent to Europe, and sold our bonds for three hun
dred and fifty millions OF dollars in gold. Ex-
change produced by this large sale was brou2h hit on
our market IN such abundance that the price Of
gold fell from go to i4O.
But it will surprise you End the people to learn
that during the time when gold was falling the
Treasury and our banks were increasing their
Issues OF paper, and these issues are greater now
when gold Is selling tor lao than when the price
was go
Here we have two facts made patent to the
meanest comprehension
Fust-As = sale in Europe Of $3.50 900 900 In
our bonds reduced the price Of exchange and gold
from 200 to 40, so IL Is probable that a 81 e OF
the same amount in addition would have brought
down exchange and gold to par, and would thus
have enabled our banks and Treasury to resume
specie payments without contracting their issues.
Second-As gold fell in price during the expan.
sion OF paper currency, how can contraction Of
paper produce the same result? These are curious
and important facts, and deserving OF public aten-
ton.
A HISTORICAL PARALLEL.
The same law OF supply and demand" pro.