Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1870-01-09


payment, would become depreciat
D The remedy which wisdom suggests is
S make the notes redeemabie, withC
3 pausing to discuss the question how mu
money the people ought to have in use.
THE LESSONS OF THE PAST.
| In looking back, we see that when o
money was good in quality no apprehe
siOns were felt that too much of it won
be used. The government passed throu!
its mint all the gold the people chose
have coined. Political economists al
statesmen may speculate, as they do, f
the business of a country, but this is
question beyond their wisdom. If Il
government will take care that the none
it issues is good, the people will regula
the quantity to be used by their needs.
DUTY OF THE TREASURY.
1t is the special duty of The FEEDER,
treasury, the issue of whose irredeemabl
paper has brought US to our present cor
ditiOn, to see to it that there is an ampl
| supply Of coin retained in the country S
as to make the transition from our presen
currency to gold both easy and permanent
1t seems obvious that this supply of gol
should be in the Federal treasury, whicl
is responsible for the only irredeemabl
paper now ahOat, so that the coin may b.
ready, when the proper time comes, t
flow promptly out of the treasury into gen
eral cirCulatatiOn in exchange for the note
redeemed.
RE-EsTABLIsHNENT OF CREDIT.
The first great duty of the government
is to make its legal tender promises as
good as gold. Having thus established its
credit, it will find no difficulty in negotia-
ting loans at lower interest and in man
aging its bonded debt. 1t cannot, any
more than a private debtor, hope for high
credit while puying some debts and igu0r-
ing others.
HOW NOT TO HELP THE PUBLIC DEBT.
1t IS a delusion TO suppose that the
payment Of a few of our bonds before
they are due materially helps the public
credit; the treasury is not bankrupt as to
its bonds; it is paying the interest ac-
COrding to contract, and the principal is
not yet due; this is not the point where
the public credit needs to be helped. The
is bankrupt on its legal-tender
notes; for a failure to pay a promise
when it is due is bankruptcy. No debtor
improves his credit by anticipating the
payment of some Of his obligations which
are not due, while he neglects to pay
those which are due Nor does the pay
ment of the bonds before maturity tend
to lesson the burdens of the
people. Were we to cancel 500, 900, 900
Of bonds in any year, there would result
an annual saving of interest of Sc, OOO,-
900. If, on the other hand, we could
reduce the rate of interest on our loans
by only one per cent, we should thereby
effect at once a saving of over $4,000
900 year for the whole time the debt
may run. Moreover this payment Of the
bonds before maturity can be made only
out Of surplus revenue; that is to say, By
keeping up taxation to a point far beyond
the actual needs Of the government.
NECESSITY FOR EAEIY REDEMPTION.
We must not forget that financial laws
are self-created out of the circumstances
existing at the period; they cannot be
by legislation. We shall be
most likely TO avoid trouble by seeking
the natural solution of our present diff
Guilty; which natural solution is, as it
seems to me, that the power which issued
the irredcemable paper under which we
now suffer should get ready to redeem it.
sPAsMODIC GOLD SALES.
SpasmOdiC sales Of gold from the
treasury impart no additional worth to
The legal tender notes. Confidence in
ability to meet obligations is the only
source of solid credit as well for the
treasury as for other debtors. InCTeas-
nc public confidence in the growing abil-
t. Of the treasury to meet the notes in
,oin would operate not merely to affect
from day to day, as those sales do, the
speculative price of gold, but toward the
of a greater intrinsic value in
he legal tender note, and so to make the pos
5ible rage of gold speculatiOns narrower.
II is obvious that sales of gold out of
he treasury cannot have the effect of
bringing legal tender notes actually and
nearer to the value of gold;
.Or it would be absurd to maintain that
he treasury, any more than any other
lebtor, can, by parting with coin, make
is promises to pay coin more valuable.
The treasury sales Of gold have simply
he effect which is always produced by
hrOwing upon any market a supply Of an
article for which there is, in that market.
limited demand. All debts, with rare
being now payable in legal
ender notes, the need of gold for use in
is not general, and therefore the
lemand for it is confined to a few, and
s a very limited one. In a market so
situated, a very temporary and small over
supply may dCpress it much below its true
md correct value as compared with legal
ender notes; which depends, obviously,
N the prospect Of the notes being paid in
,oin. Derangemcnt of business is as GER
ain to follow the artificial depression of
yold below this true value as its elevation
above it. Such a depression cannot be
'elied upon as lasting; nor does it afford
my guaranty against great subsequent
These treasury sales, while
hey do not improve permanently the
value of the government paper, COnfOUnd
he most prudent calculations Of business
ncn.
ANTI-EXPANsION.
must not be understood as favoring
INV expansion of the legal-tender currency.
The government cannot at present pay
he notes Of this kind already issued. 1t
you'd be utterly unjustiiable to put ou
INV more Of them.
FEDERAL TAXATION.
Tue Federal treasury is not warranted
n taxing the people to keep up its present
,normOus surplus of revenues. If the
country can be kept in a prosperous con
iitiOn, every year of its growth will
make the payment of the principal of the
lebt come easier. A moderate surplus
beyond the interest on the debt and the
expenses of government is all that is de-
3irable or necessary to enable it to devote
Itself efficiently to the great, imperative
luty of making its paper money good
FIXED POLICY DESIRABLE.
The moment the people see that the
government is getting ready to redeem its
paper by providing itself with the only
means of doing it, the appreciation in the
actual value of the legal-tender notes will
commence. 1t will continue, and the pro-
yress towards a return of specie payments
will be gradual, steady and certain. The
very fact that the government is under a
fixed and stable, and not an experimental
and variable policy, preparing to redeem
its paper, and will some day announce its
readiness to do so, would narrow the
range within which speculation in gold
would be possible. The current value Of
the notes in the open market will indicate
when the proper time has come for re-
demptiOD: the government need not de