The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1869-01-09
I'll. Difficulties of Resumption.

remarkable. The gist Of it is, that the only
way to bring about return to specie pay
nent is, by deducting from the face value of
the obligations of all debtors 80 per cent, and
the payment of the remaining 10 per cent. in
coin. The proposition is asserted to be just,
on the ground that 20 cents in coin represent
the full coin value of the consideration receiv-
ed by the DEBTOR for his lawful money obliga-
ton of 100 cents. The Tribune would apply
this rule to the government in the redemption
of its greenbacks, to the banks in redeening
their paper and paying all their other obliga-
lions, and to all private debtors and creditors
in settling their accounts; and says:
Any scheme of resumption which shall make
the money of account worth one hundred cents in
gold without providing for the settlement of ex-
listing indebtedness, substantially according to
the basis of values at the time it was created,
would cause widespread calamity and disaster.
It would be equivalent to calling on debtors to
pay forty to Fifty per cent. mere than they actual
~ eve, or than creditors have right to expect,
or in equity and COED conscience should exact
It would be in effect confscation of one Or two
thousand millions Of the property of the business
classes and its transfer to those who have no just
claim to dollar of it. Such proceeding would
wipe out and ruin tens of thousands of firms, and
reduce to beggary vast multitudes of families
now in comfortable circumstances; and it would
bring want and misery to the hearthstones Of
hundreds of thousands of the families of the la
boring classes. Tho convulsiop that would at
tend such resumption would 50 greatly cut of
the revenues of the government as to reduce it to
the verge of bankruptcy, and spread discomfort,
gloom and affection throughout the Union.
All must admit, there cannot be greater
financial calamity, than the hard neces-
sity Of transacting the whole commercial ex-
changes Of this nat,on,-greater than those of
any other-in currency of daily fuctuating
value, and of an average value thirty per cent
less than coin. Some sacrifices might reason
ably and cheerfully be made, for the sake of
freeing ourselves from this great evil But
does the remedy proposed really involve any
sacrifice We think it will be difficult to
point out that it does. If the value of the
greenback could be carried forward, by the
operation OF spontaneous impulsion to par
with gold, justice would require that the
debtor and the creditor should equally share
in the benefit But the greenback cannot be
thus carried to par with gold. All men
all parties admit that Some legislation, af-
fecting the value either of the government
bond or the greenback, or both, il necessary,
in order to bring either to par with gold.
But the proposed remedy, il it stops here,
where the 7ribnne article proposes it shall
stop, is a perfect Illusion 1t amounts to
nothing. The debtor is to have right to paw
his note in full, by paying seventy per cent of
its face in gold, is he Practically he has that
right now. He can take seventy dollars in
gold, and with it buy one hundred dollars in
United States notes, and Herewith pay his
note Of one hundred dollars which is in legal
effect payable in lawful money. Such an 90.
Grafton does not impel the greenback towards
par with gold single step, Something
more is necessary to be done in order TO reach
that result. What is iti In order to answer
that question, 1t is necessary to enquire, what
is the greenbackl The greenback is a pro-
mise to pay, at an indefinite time, that is, when
it pleases the government to do so, a gold
dollar, tor the dollar greenback, without in
tercst during the time it is outstanding. There
wonld be no difficulty in the governments re-
deemng every greeEback outstanding in gold
at very short day. There is not where the
difficulty lies. 1t lies in the fact, that we owe
besides the six hundred millions of green
backs, Including three per cent, and non in
terest bearing certificates serving rs bank re-
serves two thousand millions of debt bearino
an average of over six per cent. interest in
gold On one thousand three hundred mil
lions of that amount, the consideration receiv.
ed was less than seventy cents on the dollar.
Fifty per cent. of the interest we paw, is, on
the amount of consideration we received. usur
ious interest. Capitalists do not believe that
nation paying such usurious interest will
ever pay, because it is not Just to pay the
principal in full. Hence. our bonds are at
thirty per cent discount The greenbscks
are not even fundable IN the bonds hence.
they cannot be worth more than the bonds.
and If they were not n legal tender, would not
be worth half as much AS the bonds. But they
form, directly and indirectly, the whole cir
culating medium Of the naton-the medium
that is, Of carrying on its sixteen thousand
millions of commerce. They must posses, the
power ofpurchasing bonds at par, and bonds
must possess the power Of purchasing gold at