New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1869-08-06
THE Way TO SPECIE PAYMENTS.

Assuming that the Secretary of the Treas
ury will continue the policy of appropratlng
the surplus revenues of the Government TO the
extinction of its Debt, and that such policy
will be heartily Endorsed and approved by the
people and their representatives IN Congress,
we NAV predict with great confidence that our
Government securities will speedily command
premium in gold in any market in Europe
and that. instead of tempting holders to sell
at the advanced prices, we shall soon aIlract
BUYERS to an extent sufficient to absorb all we
may desire to sell. The higher the prlce our
bondsattain, the greater will be the confidence
of foreigners in their safety. and the more VIII
they desire to hold the investments already
made. We attach but little Importance, there
fore, to the suggestion that high prices VIII
bring back bonds for sale, especially when
those advanced rates have been established by
appropriatng our surplus means to reduce the
principal of our Debt. Experience teaches us
that the effect of such measures, tending 10
strengthen the credit Of the Government and TO
diminish its liabilities will be just the reverse
and we risk but little in predicting that At
or per cent bonds will soon be in active
demand at higher (gold) prices than the 9
per cents commanded few months
since, if the Government is disposed to sell
them. The exhibition Of such immense re-
sources, in a country recently overwhelmed
with the burdens and difficulties of gigantic
civil war, will astonsh the world, and advance
our bonds in popularity and credit in the ratio
of the paying capacity we develop. Hence the
inward movement in the market value of
Government bonds based upon the sound
e tsYlpu pnaa ma
to the liquidation of debt, will be assisted and
trengthened wherever our bonds are held or
sought for investment nation which can
from its revenues pay all expenses and inter
est and reduce its Debt nearly one hundred
million dollars per annum, while owing twenty
five hundred millions-or, in other words,
nation which can, Ifrom its surplus means, pay
| off such an immense Debt In fifteen or twenty
years-should, and inevitably will, command a
credit, confidence, and popularity second to that
of no nation in the world; for no country ever
before displayed such financial strength. The
example cannot fail to make a profound inn
preston.
The results, then, of continuance of
the policy of the Secretary of the
| Treasury, viz, the appropriation of sur
plus revenues, whether in gold or currency,
to the liquidation of our Understanding
debt, must obviously, we think, carry up the
credit of the Government represented in its
securities, to such point that they will
readily command a large premium in gold
| while gold, by natural laws, will gravitate to
lower prices as valued in currency For the
same measures which carry up the value of
our interest bearing securities in gold will
inevitably inspire confidence in our currency,
which, although not bearing interest, is still
the promise of the same Government which
shows such unparalleled financial strength.
While, therefore, we travel on the direct road
to metallic payments, by pursuing a course
which diffuses knowledge of our resources, and
confidence in our ability to redeem, we can,
for the time, safely leave the currency TO take
care of itself, and presently be able to consOl-
idate our six per cent debt in a four, four and
half, or (at mOst) five, per cent loan. If the
Secretary uses his authority to sell all surplus
gold and currency, and invest the proceeds in
Five-Twenties our bonds will rise and gold
will fall, until the currency value of gold
is considerably lower than that of the
bonds, as it should be even now.
1t will then be in the power of the
Secretary of the Treasury to announce that,
on and after a certain date, Government will
redeem portion of the Five-Twenty bonds in
gold at par stopping interest at that date, and
giving the holders the option of taking gold
or the new ConsOl, at par, in exchange. The
result would be, doubtless, the conversion of
the entire amount to the bonds bearing the
lower rate of interest; because, as we believe,
the new bonds would command higher pre-
MUM than gold, and thus make it the advan-
| tage of the holders to exchange.
In order to avail of this element of financial
power, and to make it practical. the Secretary
should not, in our Judgment hesitate or falter in
his course. 1t would very much disturb the gold
gamblers to have any policy continued which
tends to bring us to a metallic basis, and thus
destroy the value of gold as an article of mer-
chandise. But their opposition is unworthy of
a moments consideration, and we have conf
dence enough in Secretary Boutwell, to believe
that, if he is satisfied that by such
course he can expedite return
to specie payments, he will not fail to adopt
| it and persist in it, to the full extent of his
| authority.
There is not the slightest present necessity
of any accumulation of gold or currency in the
| Treasury, beyond the needs of the Govern
ment in payment of expenses and interest;
and we hope to see the large surplus of gold
let out, as well as the currency, holding it to
be far wiser and better to invest that surplus
| in interest bearing bonds, and thus to apply
the strength heretofore lying dormant in the
Treasury to fair equalization of values. If
spectators, here or abroad, believe gold to be
worth 1876 in our currency, or 100, or 12O or less
let them have it, to the extent of our Treasury
excess and in process of time they will change
their minds, and desire to give back to the
| Treasury the same gold in exchange for the