The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-11-23
THE FINANCIAL QUESTION.
The Evils Of Our Financial SYSTEM and n
Remedy Proposed by n Practical inssa-
chusctte Finuncicr.

chusctts Financicr.
DORCHESTER. Mass, Nov. is, 1sGs.
To the Hon. CAKES AMEs, VI. CT
SiR--As my Representative IN the Congress OF the
United states, desire TO present. 10 your considcra
ton some thoughts and concMsions on the financial
questions before the country which you will soon
be called 10 act.
our people are now trading largely on borrowed
$500, OF 6ills to the banks without interest
for which 1t holds $3.50 o00 900 OF Its bonds,
security for the redemption OF said bills paying
these banking corporations the interest on these
bonds, which amounts to $4,000, 900 annually.
These bills the banks loan at the highest rate Of
contract, and contracting when they ought 20 ex:
pand. They are not used for tile convenience and
sS s o s ssHsns es II Gs s $ do
s sf a seas R ss ypa s Fs oI
For DC ' USE 'sPa he 'H buns 'sS q
WV WY ssSsa % ne bank. ~ sss gsysnp.p, lss
creates new capital, The capital must es..s, be-
fore 1t can assume that form. Pieces Of paper are
not wealth, except SO much as they are worth by
wealth. unless the promises are true: and them
though they are wealth In the hands OF him who
nom the Wealth Ok him VINO made them, and conse
auenLy neither increase nor diminish the wealth Of
so long as our paper promises cannot he OK.
changed ut par for gold and silver, which are the
recognized standards Of value throughout the world
specie; and 1t - exported because u h relatively the
cheapest article Of export IN the market; but 10
soon rs we can make our legal tenders equal 10
specie and redeemabe In specie then We can make
IL more profitable " export other products vi our
country.
why not our government. which has the sole
power Go coin money, justly entitled 10 receive In
terest for bills loaned on its bonds since pays In
terest on these same bonds In my judgment II
should, and therefore would propose that each
sub.treasurcr and fiscal agent OF the government
be directed TO loan 10 any person legal tenders on
the note of that person with interest ut seven per
cent secured BY a government bond OF bonds to
the amount of the note The interest so received
by the government siioud be applied towards pay.
ing Interest ON Its debt. With this system in
operation, the question would not be how can the
lender safely evade the usury laws and how large
rate OF interest can he charged, but the borrower
would inquire Of the lender for how much less than
seven per cent Gun you loan money.
This system would immediately create demand
for government bonds, and enhance their price at
home ana abroad: and when IL requires 800 In god
to purchase 800 IN bonds, we baSe practically
resumed specie payments. Under TINS system those
who now nnd II necessary ~ keep large balances
on hand, drawing no interest, viii keep them In
government securities; for they can always borrow
the par value from the government at the rate
Of seven per cent interest. ny this means the
temptation 10 lenders 70 loan on their surplus
deposits when money IL plenty, and contract when
money is 10 demand, VIII be removed. The obliga-
tion betwcen the government aud The borrower
would lie mutual; the government receiving interest
paying The difference pvtween the interest Oh nus