The New York herald., 1873-12-07
CURRENCY REFORM.
Fresh Solutions by the People Of the
Great Financial Problem.
To THE EDITOR or TUE HERAID:-

ana currency mtroconVertlbie WISH siInpiJ W
say that advocated it In your columns as early as
1867 and am not aware that 1t had been pre-
viously suggested. l wish now to refer to some
criticisms which have been made. 1t is asked
First Where Shall we get the nge per cent bonds
from, since we are told that .sthose belonging to
our national banks are hypothecatcd, and what
nave not the money to buy them back ~
Second Where Ii the money TO come from where
with to redeem the bonds after they are issued
Thtd-How Shall we limit the amount or cur.
rency and keep up Its purchasing powers
1t seems to be forgotten or overlooked that
money Is but the token by which every kind OF
property is valued. 1t may or may not have a
value Independent OF the government stamp or
the known responsibility OF the person or corpora
ton who issues 1t. Ii we lack money, we cer-
talniy have corn and cotton, which VIII procure It,
Practical experience has shown that gold is the
artcle-haynS an intrinsic value admitted by all
nation5-whlch Is best adapted Tor a universal Cir
culatng medlum but gold itself forms currency
utterly ineastlc, except as the gain o! one nation
impoverishes another. The nation which gains
finds 1t elastic enough, but that which loses has
good reason TO complain OF It's ineiasticty. The
nearer the approach to barpartsm. the more eX-
cnsiyely does gold silver become the circulating
medium and the poorer we ind the people, until,
too poor to possess either their resource IN trading
is barter. Conversely OF this statement the higher
the civilization and the richer the nations in gold
and silver, the more necessary and prevalent IL the
use OF other earrency Every cneck zee dFawn upon an
hand to hand is part OF the currency; any
attempt to fix an arbitrary limit 70 tue currency OF
nation, or to the reserve necessary to be kept, is
to strangle commerce with q tightening cord, just
at the moment when It's knots should be unlooscd
The paper issues oi responsible ana stable gov
ernment which will purchase coin at par, are In
all respects as good as coin Tor currency purposes
and in many respects better Their loss or de5truc-
ton is no greater to the loser, and is oy so much
gain to the nation. II such paper currency VIII
not purchase coin at par 1t should be made con-
vcrtlbe into something that Will or into the coin
Itself
Now, no one doubts that II our greenbacks were
convertible into coin, and tile holders were fully
satisfied that they could have the coin If they
wanted 1t, they (rne greenbacks) would purchase
much as their equivalent In con and not one
In hundred of the holders would entertain o
thought OF demanding their redemption. This
would be resumption.
suppose we make the greenbacks convertible
the markets OF the world-our five per cent bonds,
for instance How long would coin remain at q
premium Just long enough to make tn the 1 exchange
ment about ii. 1t Is utter folly to talk about the
danger OF a shrnkage OF ten per cent after oil we
have gone through. The overspeculative ana I'm
provdent will fall as they ought to do. by the re-
suits OF their past folly not BY the act OF resump-
The fact that during our recent panic greenbacks
could have been obtained at legal interest upon
the pledge of government bonds Is pointed to as
wanted the greenbacks did not own the bonds. To
my mind this is most powerful argument In favor
OF the plan OF ntrocon yertiolsy; ,,, Il It the bonds
supplied themselves with them in advance, for 1t
was the banks who needed the greenbacks, and 1t
Is idle to argue that every merchant must fortiy
himself as u banker to avail himself OF the ad-
vantages OF the plan. Not at all. Mercantile and
manufacturing enterprise will go on as hereto
fore but the Banks, taught an expensive lesson,
will fortily themselves with convertible bonds, in
stead of loaning on call to stock SPECTATORS and
the consequence will be that they Will be able to
render ali needed aid to the business community
1t is here admitted that there is already an
abundance Of paper currency in existence, and
that the limit should not be enlarged except in
proportion to the Increase or the population, in-
admit OF greater relief In an emergency.
The duty Of the government is 10
better for the express purpose OF resumption.
Less than 500, 900 would accomplish it-Much
fixed sum, say sloo,oooooO, OF its currency-it Is
quite immaterial whether gold or grecnbacks-1or
the purpose Of redeeming It's convertible bonds
1t is very easy to predict that in case of war we
might have again to suspend the use OF coin as
currency, but. it must be remembered that that
would probably be necessity under any crcum-
dates theory intended for the condition OF per-
petua peace which 1t Is noped all nations WIZ 10
will want money, and usually year Ia advance OF
its receipts; tins will keep 1t borrower Be-
that possibility approaches we should reduce the
burden of taxation. Nevertheless, If we should
Should pI pay of the also and dow
few civilized nations nave done-uae an exclu-
sively metallic currency.
1t must also be remembered that 1t is only the
balance OF the currency which needs to be regu-
lated. Its volume would only be increased as the
needs Of the country might demand.
SIX years ago l advocated SIX per cent gold
interest bearing bond Tor this purpose. Tor the
same reason that now advocate I've per cent,
dn case the five per cents rise to considerable
premum). to be followed by three and 65-I00 per
cent, into which the whole debt could speedily be
funded.
The volume of the currency will surely be regu-
lated by the rate OF interest and. what is much
petually kept down. The usurer and the extor-
toner will continue to ply their trade but Ii Is to
Mop 9Spss % Tsian Is1 T5mN Jint & uypERH
To THE EDITOR OF THE HERALD
viii you allow this communication space In your
paper, that the views of business men may be ex.
changed In reference to the banking system that
should be adopted, in order that we may have
free banking and at the same time open the way
for the resumption OF species 1t seems to me
that If the government would at once revise our
whole banking system by thro wing open the doors,
allowing free competition in banking the ben-
eft to the legitimate business OF the country would
be incaculable; but 1t cannot be done under the
present system, for II the Comptroller of the Cur
rency should issue bills for all the bonds offered 1t
would food the country with an irredcemabe
place resumption beyond all hope How, then,
can we have free banking and limit paper circua-
tion and return to specie basis l answer. Let
the government call upon the national banks to
withdraw at once their circulation and substitute
Treasury notes for national bank notes by the pur
chase Of the bonds from the banks now held as
security for the redemption OF the bank notes, and
II there is not sufficient currency the government
could issue $4,000 900 more by the purchase OF
bonds, which would give us 1000, 600 oftreasury
notes TO bank upon. Now open tho door and let
every man or association OF men have bank
charters, either by the States or the national gov
ernment holding the stockholders responsible to
double the amount OF the capital OF their instltu
tons or the security or deposlt0rs In every case.
This would be saving OF interest to the govern
ment OF SIX per cent IN gold on all the Treasury
notes In circulation in the country. Ii Treasury
notes were substituted for the $3.50, 600 OF
national Dank notes. there would be Il saving or
s2i 0oooo gold, yearly II $500 900 more Treas
uTy notes became necessary, then an interest OF
sis,00o 900 OF gold additional would be saved 70
the people. Now, let the old Treasury notes out.
standing be called u and new notes issued in their
stead and make oil these Treasury notes payable
on demand In gold. Now what would DO the erectS