Daily Ohio statesman. [volume] (Columbus, Ohio) 1855-1870, 1869-01-29
RadtcaI Finances.

Radical Finances.
5, The bill introduced in Congress, by. SEN
ator SHERMAN, of this State, in its third
section authorizes the issue of 10 40 five
per cent. bonds, payable, principal and in
terest, in gold, and exempt from both Fed
eral and State taxation, which are to be
exchanged for treasury notes at the will OF
the holder. The object of the bill, and OF
this section of it in particular, is to Iexpe-
dite return to specie payments;Iand an
augury of its effect in that behalf may be
had in the fact that the present 10-40 five
per cents are at a premium OF Seven and
three-fourths per cent above treasury
notes. Such being the case, itsmay beabe7
lieved that, on the issue of the new bonds,
the holders of treasury notes will take adj
vantage of the circumstance, and that the
exchange will take place with reasonable
rapidity. ~ 9'ts' lr,t
The third section is, in fact an effer to
the holder of currency of q premium OF
seven or eight per cent. on the process OF
conversion; and there are many reasons to
believe thatits effect would be to produce
a return to currency of specie at least
to the extent to put out of the way every
other species of currency, The notes OF
the NATIONAL banks would be returned to
those institutions with demands for the
treasury paper in which they are redeema-
Bile, and, in all probability, the whole of
the latter would take up its line ofmarch
toward the treasury, there to expire and
become extinct under, the influence and in
the embrace of the new ten-forties. son
The effect of the process, If notaltoSeth-
-er benign, would be somewhat emphatic.
1t may be lsays the st. Louis Republican,
whose sentiments are SO well expressed
and meet our own so perfectly, that we
adopt them as our ownl lthat the opinion
of Mr.. SHERMAN,as as the passageloh the bill
will at once, raise the price Of notes to a
par with that of the bonds into " which they
are convertible, the process of conversion
will take place gradually But the history
of the past shows that bonds have always
been esteemed superior as security to notes;
and no opportunity. of; conversion at par
has ever occurred of which advantage has
not, to the full extent, been taken; SO that
there is little reason to doubt that, the door
once opened, the progress would not cease
until every note ofIthe treasury paper has
disappeared. The first bill under which
both treasury notes and bonds were issued
provided for the conversion of the former
into the latter, at the will of the holder ;
but so rapid was the conversion, and SO
formidable the disturbance in financial af-
fairs which It created, that the clause au-
thorizing the exchange was repealed or
suspended, and SO it remains. s5,sa8sr1
81 The organs of the Republican party are
by no means agreed inrespect to the finan-
cial plan of Mr.. SHERMAN. While the
New York Evening Post holds that .'the
bill has great merits, and its defects are
only. those Of omission,n adding that s.it
Senator EDMuND's resolution, declaring g
thedebt payable in real money, were add
ed as anew section lit would be- perhaps,
as complete and hopeful q measure as we
/ are likely to get this sessions the 1Gihcin-
natl Gazette-which is not without its dis
tinctEnotions upon financial affairs s-de-
clares that 'sthe presentation of such a bill
| is evidence of q fitness for the lunatic asy-
lum." The one holds that sit could not
fail to have an. Importance in raising the
credit Of the Government" the other that
sit will prostrate business, stop the pay.
ment1 of debts" and carry dismay and
bankruptcy among the people, sai2'19
The true way to consider the pro- granine
of Mr.. SHpRMAN is to Look upon it in the
Hight of the effects contemplated by its
author. These are contraction of the
circulating medium, slower or faster &C.
cording to the circumstances, rbut, at al
EeventsS contraction; and at a ratelthatle leg.
tislatioh can neither regulate nor prescribe
All contractions viii work changes in re-
lation of debtor and creditor in niproportio1
Ito its extent. The ultimate end proposed
is a return to specie payments and a cast
standard of values; and it is intended tina
the Alternative process established by the
law shall not cease until this end has been
reached. In the case of the suspension o.
a bank, or of general suspension OF banks
such as took place in 1887, resumption
cannot begin until, by a combined pro-
cess of calling in the currency and
accumulating specie, the quantity. 3of
1.-The latter held for the purpose oi
redemption is equal, or very nearly
equal, to that of, the former standing
unredeemed.s But here, it is proposed to
dispense with specie by the creation of 8
security preferable to treasury notes, ,ir
(which the latter may be absorbed and ex-
ltinguished. This Is the taking away oi
our cireulatine medium by the issuing
party without supplying its place with
another. If the operation of the Dill
should be to create q tendency toward the
proposed exchange, there would be q de-
manff upon thei1 banks for! the treasury
notes in WhieR their paper is redeemable,
which would compel sudden and nc decisive
suspension of their accommodations II
the movement should be rapid, those con.
Germs would be forced:into liquidation, and
their bonds, holdeniby the Treasury, as Sc
curity, would enter the market to compete
with the new 10'4 40s, while their debtors
In consequence Of the advance in the price
of the means of paying debts, would BIZ
almost universally in default. esOG III
Suppose there are, as some compute, an
aggregate of six thousand million OF dol
lars in private debts in the United States,
contracted, upon currency basis covering
sixty per cent. on the specie dollar, the eff
feet of the process which Mr.. SHERMAN
seeks to initiate would be, by the ADDITION
of two -fitths to the cost of the means for
| its cxtihguishment, TO oincrease this aggre-
cate TO ten thousand millions; and as, whep
money is becoming scarce, the difficulties
Of obtaining it increase in a higher ratio
than that, of the diminution,y the resul
could not be otherwise, than a universal
stoppase Of payment. .agIhd9 aIiTBa espdj
II may be that this is the res1s
-s'. ysEsiA .0l ..le d. q .l9s,. "a