The Portland daily press., 1873-11-04
Doctor Kelley.

AS the time for the meeting of Congress
approaches the number OF men who will Of
fer panaceas for our disordered financial af-
fairs will be almost limitless. Indeed, if theo-
ries can avail anything, the country would be
enjoying a currency that would be equal to
gold in quality, ample in quantity to meet
every citizens wants and of india-rubber elias
ITCHY. Modest Congressman will be inter-
viewed by special correspondents, while those
who are strangers to that virtue that so adorns
women, will insist on displaying their nos
trums in whole columns of newspaper dreari-
ness.
Judge Kelley of Philadelphia, who, as the
that the whole American continent was peo-
pied for the express purpose of stimulating
the pig-iron industry, has just given his views
at length on the financial situation. The
opinions Of Congressman Kelley are worthy
of notice, not simply because they are his,
but because he is the exponent of the ultra
protectionists of the country and is quite
likely to represent the sentiment of that class.
In the first place, Judge Kelley appears to
be in no hurry for the resumption of specie
payments. He declares against any contrac-
ton of the currency and really favors furth-
err imitation. Indeed, by his theory, resump-
ton is only to be brought about by the issue
of more greenbacks. Contraction, according
to this financial physician, will make the in
terest on money higher and will, as it has al
ready done, send the government and other
gold bearing bonds to Europe. The interest
on these securities held in Europe call for
$1O0,OOO,OOO in gold annually, or SAC, 200, 600
in excess of the product of the country. In
addition to this the balance of trade has been
heavily against this country, making still.
further drain upon our specie to adjust the
differences. Horace Greeley, also exponent
Of strictly protective tariff, declared that the
way to resume specie payment was to give
notice that the government would resume by
placard on the treasury building door, but
Mr.. Kelley says no. There are two roads to
specie payment-the one long and tedious,
which is the present policy so far as the tariff
is concerned, only more SO; and the other is
to recall our gold bearing bonds in Europe
and issue currency bonds instead at low
rate, and thus keep gold at home.
This last plan is his favorite and, as mat
ter OF curiosity, Is worthy of passing notice.
DR.. Kelley first makes diagnosis of our dis
eased finances. The present troubles are
caused principally by speculation in New
ing money not in use let the local banks have
it at a low rate of interest on CALL These
country banks send the money to Chicago,
st. Louis and Boston banks, which, in turn,
hire it to the New York banks. The New
York banks hire tit such brokers as ]. Cooke
& Co., and Henry Clews, who in turn hire
it to the men who gamble in stocks and make
corners in gold and greenbacks. These are
all "call loans" Last September the original
depositor asked for his call loan at his coun-
try bank land there were thousands like him.
the local bank called upon Boston, and Bos-
ton upon New York, the New York banks
called upon their customers, who had the
money loaned where it could not be called.
Hence the panic and the stringency.
Nearly all will conclude that the diagnosis
of Dr. Kelley is mainly correct. Now for his
remedy. First, he would make it grave
ofense for banks to pay interest on call loans,
and still greater misdemeanor for them to
give certified checks of deposits they have not
on hand. Second, he would not require banks
to keep reserves. Third, he would have the
government issue bonds bearing currency in
terest at the rate of 3.65-100 per annum.-
ho n oil
nations so that the farmer or trader who
usually deposits his surplus as call loan can
get as high rate of interest by investing in
these bonds, which are always to be paid on
demand. With the money obtained by the
sale of these bonds, Mr.. Kelley would have
the Secretary of the Treasury authorized to
call in, as far as prudent, our gold interest
bearing bonds, reducing the rate of interest
and stepping the flow OF gold to Europe at
the same time.
Such is Doctor Kelley,s remedy. 1t sounds
well unless one begins to cross question it.
With the restrictions on the banks it is quite
possible that the bonds might do away with
the evil of call loans and take away from the
stock gamblers and spectators the means of
creating panic. The idea, however, that
the Government will be able to purchase its
gold interest bonds with this money received
for currency bonds is preposterous. If the
plan should work well, in May and June, the
Government would sell a hundred million
dollars worth of these bonds, but when the
time to move the crops came, it would, in
briefer space, have TO pay out that sum in
greenbacks. There is DO possibility that there
would be five millions surplus to invest in
fve-twenty bonds. The Government would
either have to assume the interest on this
money piled up in its vaults, just to prevent
it falling into the hands of spectators or is
sue batch of greenbacks for this special OBJ
ject, and thereby renew the evils that we are
suffering from now. The only question, then,
TO be considered in connection with DR.. Kel-
ley's scheme is: Will it pay for the country
to expend two or three millions annually to
keep the currency out of the hands of specu-
lators and where it can be obtained when
wanted9 If we take any other view of DR..
Kelleys scheme, he must, in the classification
OF financial physicians, be considered hom-
oeopathist, since he proposes to cure imitation
by imitation.
q OUR New York letter illustrates from the
case of the Spragues and Clafiin the tenden-