The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1869-01-14

I Butler proposes for us-out entirely loose
| from any natural standard Of vaIue ip the
regulation of their paper money; how could
| the exchanges OF the world be carried ON
Bow could merchants know when TO import
ard when to export What would become of
International commerce. So wild theory
does not deserve the dignity of a refutation.
Let us assume, however that the quantity
OF General Buffers proposed currency we're 90
be regulated by the value OF gold, so as TO
keep II at about par; that is, that we should
have a standard gold dollar, aud that the
paper dollar aimed TO represent its value.
Making this gratuitous concession to General
Butler against his own theory, we proceed to
examine his project rs mechanism for sup.
plying money. We will describe its features
in their order;-
First, General Butler proposes to withdraw
the present greenbaoks, which are in the
form Of promssory notes, and substitute the
same amount Of other greenbacks which are
not promises to pay, but "oertihoates OF
value" to be, like the present greenbaoks, a
legal tender. So far, the change would bs
trivial, merely making the language OF the
note correspond to its real character. la the
next place, General Butler would have the
new greenbacks receivable for customs as we'll
as for internal taxes, making but one currency
for all purposes. This would be great
change, and there can be no doubt that il
would add to the credit and enhance the value
of the new paper money. General Butler pro-
poses $3.50, ,000,0 600 as the amount of the new
currency; and as he supposes that the annual
taxes, internal and external, would amount
to the same sum, there would be a virtual
annual redemption and reissue of the whole
currency. If its quantity were not excessive,
this universal receivabilty for public dues
would undoubtedly maintain its value. But
if its quantity were excessive, its depreciation
would lower the tariff decrease the revenue,
and compel the Government to buy at pre-
MUM the gold it has pledged for interest on
the public debt. This feature alone (and IL is
essential to the system) would prevent its
enactment into law, and would seem to show
that General Butler aims rather at a sensation,
to make himself talked about than at auy real
change in our fiscal system. The Government
has made a solemn legislative pledge to the
public creditors TO collect the customs revenue
in gold and to set apart the proceeds ESQ far as
may be necessary to pay the interest on the
public debt. Besides, there is no other so
ready, obvious, cheap, and certain method of
procuring the gold for that purpose.
The second great feature of General Butler's
proposed scheme is the suppression of the
whole circulation of the national banks, and
the substitution of singular plan, of his own
invention, for supplying the ehasm thus
created in the currency. Everybody who wants
money is 10 be enabled to borrow it of the
Government, at all times ana in any quantity,
by depOsiting bonds as security. Every bank
and every individual, who owns Government
bonds, can deposit them and receive ninety
per cent. of their amount in the new "certif-
Gates of value" for which he is charged and
65-lOOths per cent. interest; paying the debt
whenever he pleases after thirty days, and
receiving back his bonds which were pledged
as security. 1t is probably idle to inquire
what would be the effect of such a law, since
there is no likelihood of its passage. Its ten
dency, supposing it possible for it to pass,
would be towards prodigious imitation of the
currency. Suppcsing the natural rate of iu-
terest in our circumstances, to be seven per
| cent, if men can borrow at half that rate they
will be likely to use double the quantity q
! money.
When money is borrowed for production
| purposes, what is really borrowed is the CAPT
tai used in production, that is, the mainte
nance OF the laborers, the raw materials fabri
Gated, the machinery, tools, etc., used in the
operation. The money is merely claim on 8
certain amount of real capital. The price PAID
for the use of that capital depends upon iti
abundance and the competition of those wish
ing to employ it. If the proportion of th
supply to the demand be such as to make i
worth seven per cent, the Government canno
reduce it to three and half by lending money
at that rate. The competitors for loanabl
capital would borrow twice as much money
1nsteau OF paying seven per cent. ON one nun
dred dollars, they would pay twice three ant
a halfper cent. on two hundred. In its prac
tical operation (if it could be put in practice
General Buffers scheme would be merely al
instrument for initiating the currency.
The only remaining feature of General But
ler's scheme is his proposed substitute TO
the fractional currency. Here he relapse
into 'the barbarism of hard money!" only h
would have it made of debased silver. Th
only thing that needs to be remarked upo
this is its inconsistency with the other part
of his plan.
Take it in all, this scheme is too visionar
for sober discussion. 1t will be pity If an
time is wasted in the House in replying :
General Butler's arguments. II is not wort
while to make pompous funeral to bury a
abortion.
General Butler Oh Finance.
Lhe