The sun., 1870-03-09
Specie Payments.

done without the use Of coin when all business
| is upon the basis OF coin value. The primary pur
pose Of coin is not for currency but for standard
money; when paper is maintained at par coin wi II dc
more or less currency work, bnt when paper s made
standard money 1t always falls below par, and coin
| ceases TO be used as currency
In either checks drats, bills OF exchange, and
even book accounts, do a vast amount OF currency
work
Whether coin or paper is used as standard money,
then various forms OF credit, other than paper
money, perform about the proportions of actu-
al currency work. This is, however. when paper Is
the standard or maintained at par, and coin the
standard. When coin is the standard and paper
money at discount 1t takes more coin to conduct
given amount OF business and less paper money In
such case also forms OF credit other than paper
money will DO large proportion of currency work,
because they are maintained at par whether paper
money is or not.
The better the paper money, the more certain its
ultimate redemption; the more certain Its redemp-
tion in coin on demand, tho less per cent OF coin
required to maintain 1t at par, and the less coin re-
CURED for actual currency work. This Is so self.
evident that It needs no argument or Illustration
The matter with our present paper currency is not
Its ultimate redemption-we all know that the faith
Of the Government is pledged TO pay It in coin-but
its immediate availability. 1t Is not redeemabe in
coin on demand; It Is not receivable for
duties; It is not fundable into intcrest-bearing
bonds.
The national Government is the creator OF the
paper money, and II must bring II TO par, and main
tain 1t there. This 1t should not do by proposing to
redeem II with coin demand that Is the last not
the first step. First make the paper money as good
possible without redecming 1t with coin then at
tup ma Ee in nj h
mand.
Give holders the right to fund the paper money,
say in oneyear certificates, payable with interest at
the option Of the Government, in coin in per
cent. bonds maturing within ten years, and payable
at maturity, at the option OF the Government in
coin or in other like bonds at rate of interest
and upon the same conditions.
Gold is now abou; hay. or. other words, our
paper money Is about 50 The 1910 per cent bonds
about 1O7 in currency. nearly % in coin. Such
oneycar certificates would not be less valuable than
the 1910 bonds. This funding privilege then would
elevate the paper money to % IN coin, or in other
words, coin would decline to iO7.
II the certificates were made to bear per cent
interest and be payable In year In coin or in
per cent. bonds. the currency would 60 to par a,
once in addition 20 the privilege Of funding If the
paper money ma receivable tor duties IL would
10 par, and mantsir that it would be better to
do either or both. rather than do nothing But I
believe the paper money woald DO par soon enough
by giSins The holders The right 70 fund into per
cents. only and this without using dollar In coin
To meet the objection that this would reduce the
volume Of currencv, hold the paper moneyithus fund
ed and Offer II In exchange dollar for dollar for any
outstanding Government indebtedness, due or not
due
Holders OF Government debts would object TO this
funding process, because 70 brings the 10 40s down TO
par IN currency. and rro lily 1t would bring the
'-2Js to par also This is iruc but 1t Is not a valid
objection. Tho bonds would not be worth less in
coin. out imore. The Government is in no sense
bound to- keep rs bonds a, i9j o. 10 or at any other
premium bu. it is in honor mad Good faith bound to
hring H. demand liabilities to par. maintain that
the Government has erred in using its power and
,aplls money TO -us,lin its bonds having Glccn 10
twenty years TO run az % rtr cont premiums lgnor.
iu- i'- lu'y e. 20. ifs dcmard liability.
Auou. yll aon to funding g. tia; 1t ra.s On iu.
teIe,t UDl, now bears no interest.
ON ihis point ! maintain TIA; tho Gov.-nmcn, las
no r at go l.c it's own Lo..s !ar pap,r money. un.
les % Maintains thc notes a. par with caiu-cAcrrt
in ca-cs o! unavoidable necessity j. WAS no part OF
the purpose Oi the Government In isfuiug t4c-o
note 60 save ut,lc interest T1c eround uaop
which tHc, were 's' aei rn .yolf.AIo urccssi,y-
o. q wcr measure 10 save The very lie OF thn Coy
cWmynt
That necessity no longer czisti. II this paper
money 8, 10 oc defended on tnis interest ground.
Why not issue S2O0JO OO0OJO OF 10 at once, and
give notice to bondholders that interest on tnc
bonds vii! cease from t1-layf o, horror, Rebel
Copporhe.dl That u rspudiit'on Might a. well
rcpuliatc the whole debt at once. Exactly 80, and
that Is why l am opposed TO it-aui maintain
that every day the Government ncglccis 10 make the
geenbacks par In coin after t has power to do IT, It
Is reputation in principle, differing only In degree
an IN favor OF United states notes, aud AothiH1
s|', "a paper money, but they mus; be maintained
at par with coin. II is prerocatiyo OF supreme
Governments TO furnish paper money aud to derive
the utmost benefit from IL but It Is error bunder.
crime not TO maintain It at par when possible.
Before my ink is dry. gold sells down TO 10Y,
NEW IoGK, March Q. 1870. JAG