The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-01-17

| fluctuations OF their currency will be but the
then, win become fact and will check the ten
| dency Of the country banks to employ their cur
rency IN Wall street spec9latiens AS they may
| have the benefit OF the alternative redemption
provided as to United states notes, 80 that the
sacrifice OF their securities that generally follows
specie payment during panic, can go no further
than the payment OF their bonds for their notes. par
and silver coin into actual use. The amount now
boarded has been varieusly estimated, and with
that deposited in the Treasury and in circulation
m California cannot be less than
TWO HUNDRED MILLION DOLLARS.
This will probably take the place OF legal tenders as
bank reserves and thus add to the present volume
OF the currency. Even IL specie payments should
cause the retirement in coin funding OF fifty mil
lions OF United states notes their place will be
more than fillcd ny the coin let loose from Its pres
ent Punishment therefore conclude that the
Tears OF evil results from specie standard are
traction OF the currency, no disturbance OF real
values or suspension OF business; but that our
present United States and bank notes will pass az
usual in the ordinary exchanges OF Lie. increasing
the value OF all property whether produced here or
abroad, equal to the real money OF the world, and
with no faint OF dishOnOr or depreciation about It,
There is one incident to specie standard that
must not be overlooked. It Is the widespread IN
jury produced by sudden panic,
WHEN CONFIDENCE is TEMPORARILY DETHRONBD
and all demand specie at once With the paper
currency IN use in the United States be-
and bankruptcy In such time the right to
with rredeemabie and depreciated paper money
would only cause a further depreciation until gen.
erai causes restored confidence. 1t is commonly
said that with specie payments we had the panics
OF 49, al and '57, while with irredeemabe green
backs we have had a war; the fire at Chicago
Gle standard is talacy. TO express it as the Eng
sh did, when specie payments were suspended.
uu "GUINEAs ARE USELESS HlNCUMBRANoE."
| panic specie payments are suspended nation
may by this use Of paper money alone develop its
| resources and obtain high financial prosperity;
but it IS also true that history furnishes but two
examples OF such success, and In both cases specie
payments were constantly promised and Kept in
view, while the public credit was maintained by
collecting It's revenue and paying its debt In coin.
In Great Britain during her wars with Napoleon,
| the Bank OF England notes were q deprecated I'M
reliable paper currency, but they were never made
d legal tender, and their credit was supported not
| only by promises but by attempts at resumption.
In the United States the secret of success with
paper money was the careful limitation OF its
amount amount the payment or our interest IN coin the
promise Of the United States to redeem all its
notes In coin, with the confidence of our people
that this would be done; that not only the United
| States, but other nations who conducted war with
paper money alone, without an expectation of coin
redemption, met with disaster and financial ruin.
| Such was the experience OF France with her as
signats and mandats OF the American colonies
with Continental money and OF the Southern Con-
the modern nations of Europe have attempted at
some period OF their history to bridge over their
astrous results. Great corporations with the power
| OF the government behind them, have furnished
lnnulneTaDle examples OF Lne Jolly OF SUSTAINING
paper money except by specie redemption. The
scheme Of George Law, in France, the Bank OF the
United States. and the pet banks are striking ex-
| amples. II any one fact is proven by the expert
| ence of mankind it il that gold and silver are
THE BEST POSSIBLE STANDARDS OF VALUE.
They have been so recognized by every nation from
the earliest period OF recorded time. However
much nations might differ in religion, habits pro-
dnction or climate, they have not differed IN this
ments have been tried with other standards, from
the iron Of Lycurgus to the present bank-note
In the conviction that gold Is the only true stand
ard. Paper mOuey, supported by the credit of a
facilitating exchange by the ease and safety Of
handling and transmitting 1t; but 1t is not real
ONLY PROMISE TO PAY MONEY,
and the only test of its character as false or true
money Is its capacity to be converted into gold or
silver OF the prescribed weight and fineness. The
effort to continue the use OF gold as the standard
and paper money as the representation OF gold
| OF political economy. Our own system, through
the outgrowth of the war, is believed to contain
some advantages superior to any now In use in
the world. 1t rests upon the credit Of the govern
ment. The government promises to pay not
only the United states notes, but the bank
| notes, and holds security for the payment OF the
latter. 1t combines the interests OF the govern
ment with the interests OF private persons, the
the nature Of the case VIII allow. The United
States prints the bills OF uniform style; guards
them against ceunterfeiting; torn or infatuated
Uniform value throughout the United States All
that is needed to complete the system is general
specie redemption, but with provision for tempo
rarily suspending specie payment in case OF ex-
IRENE necessity. II was the want OF some power
Legally to p specie ne that LED to the
probably might have led to temporary suspension
on "Black Friday" or after the Chicago fire. In
stitute for specie payments Is indispensaby
sary, unless paper currency Is SO restricted and
limited in amount as to be insufficient for the
ruling exchanges Of the country. All paper money
must rest to some extent upon confidence. When
panic arises by some unforeseen event which
holder of a bill or deposltor in q bank is
to convert his money int gold. This feeling, il
wide spread ana long continued win break
any bank, however abundant its assets, and will
necessarily lead to the enforcement OF debts and
general distress; Our national banking system
time of specie payments sufficiently protect bank
from an enforced sacrifice OF its assets to maintain
as well as the existence OF the bank, demands q
temporary suspension. The same difficulty might
1se om sne pap OF e nsd ,stss am
reserve Of geld in the Treasury might be ex-
hausted by a sudden demand. A war or panic
that the United States might be unable to redeem
In coin. Such contingency ought to be provided
for in advance. The eXpedient adopted in England
OF allowing the Bank OF England TO raise the rate
OF interest on its Oans and thus draw its assets
TO meet anticipated danger in demands Is not con-
sistent with our public policy A discretionary
power in private persons or public officers so
delicate subject as the national currency
OuEHL u De dNOlueu Inc natlOnaI
banks already possess in the custody OF
the government the means to obviate
this difficulty. The best substitute for specie pay
ments, when from exceptional causes 1t cannot be
maintained, is the public credit. II the United
States cannot pay its notes In coin, or any national
! bank cannot pay its notes in coin or in United
States notes, then payment in q bond Of the
United States, bearing interest at such rates and
upon such terms as ordinarily to be above par in
gold, would provide for redemption; 1t would sat
isfy the public creditors and prevent even for
time any considerable depreciation Of the notes.
In the meantime the notes are a legal tender
among our citizens, will pay debts and fulfil
contracts and will, the moment that exceptional
causes pass by, De at par in coin. With authority in
the Secretary OF the Treasury TO redeem United
States notes either with coin or with the class of
I'VE per cent bonds now offered i0r SALE and with
like authority to redeem bank bills protested for
non-payment IN specie with the bonds OF the bank
deposited with the Treasurer at par, we would