The Highland weekly news. [volume] (Hillsborough [Hillsboro], Highland County, Ohio) 1853-1886, 1869-09-30
The Difference in Value of
GreembacIks and Bonds.

A controversy has taken place be-
tween the Times and Tribune of Chi
lcago, as to the charge made in some
quarters that the Secretary of the
Treasury, in pursuing his policy of
buying bonds, is taking the liberty of
paying the bondholders a premium
not authorized. The Tribune states
the case as follows, in behalf of the
Secretary:
"The Government must not take
advantage Of its own wrong and bad
faith. The reason that Iegal-tenders
are worth less in the market than
bonds is because Congress, at the in
stigation of the next Democratic can
didate for President, S. P. Chase.
wrOngfully repealed one of the original
stipulations of the Five-twenty and !
Legal-tender Act, which distinctly
provided that the holders Of green !
backs should have the right to convert
them into Five twenty bonds. The
holders of these Treasury notes never
gave the Government permission to !
abrOgate the cOnvertibility clause of
the contract. 1t was done at the in !
stance of the then Secretary of the |
Treasury, under the mistaken notion
that the financial exigencies of the
Government required the perpetration !
of this wrong on the noteholders. The
effect was to greatly depreciate the
value of these notes. The original /
contract with the public creditors dis
tinctly provided that the green6ack8
should be collUertible into gold interest /
sic per cent. bonds, at the pleasure ofI
the holder, The Times admits this to
be the fact. But it nonsensicaIly ar
CUES that after the Government shad |
deprecated the greenbacks twenty
two per cent. below the value of the
bonds, it has a right to compel the
bOndhOlders TO surrender them for
these dishonest notes, dollar for dollar!
"The original compact with the
nOteholders and bondholders, plainly
provided for two things, viz: The es-
tablishment Of a compound interest
sinking fund, for which one per cent.
of the entire debt was TO be purchased
annually, with the gold derived from
duties on imports; and secondly, that
the greenbacks should be exchanged
into Five-twenty gold interest bonds,
at the option Of the holder. Both
these highly important stipulations.
were subsequently violated and disre-
garded, without the consent of the
public. For seven years Chase and
McCullOch, as Secretaries of the Treas
ury, refused to exchange bonds for
greenbacks. The consequence of the
one breach of contract was to almost
ruin the value of the bonds, and of the
other to shamefully depreciate that of
the notes. A few months ago Secre-
taEy Boutwell, began to comply with
the Sinking Fund provision of the
law, and the effect has been most re-
markable. In four months the bonds
have advanced twelve per cent. in
value, and whereas they were worth
but seventy-eight cents last month,
they are now selling for ninety cents
in coin. But the convertibility pro-
vision of the Legal-tender Act has
not yet been complied with, and will
not until Congress assemblies. Mean
time greenbacks are at twenty. two per
cent discount below the market price,
of Five-twenty bonds, whereas they
ought to be exactly of the same value.
The first thing to do is to restore their
cOnvertibility power, and then the
of the Treasury can npur-
chasep or " redeem - Five twenty
bonds for greenbacks, dollar for dol
lar, to the full extent of the surplus
for the next eighteen years.
"Iet Boutwell, continue to purchase t
for his Sinking Fund, as the law 1s
directs, and let Congress restore The
convertibility clause TO the greenbacks
as the original contract requires, and t
before another year elapses both the
bonds and notes will be at par with
gold.n 1Ja in. II