The New York herald., 1873-11-24
Shall We Have IN Elastic OF . Com
vertible Currencys


We print this morning long and able
letter from correspondent who signs himself
"Necker" In this communication our cor
respondent discusses with great ability and
sagacity the question of an elastic currency
that is, a currency which shall expand or con-
| tract of itself, according to the necessities Of
business and trade If an elastic currency is
possible at all we know of no better way to
make it SO than by the plan suggested in this
mmunication-namely, by making the
four hundred and eighty millions OF
five per cent gold-bearing bonds out
standing convertible into greenbacks at
the pleasure of the holders and reis-
suable at the request of purchasers. Where
the money is to come from with which to re-
deem these bonds, in case they should be
offered in larger amounts than the currency
balance in the Treasury, is not very clearly in
dicated in our correspondents letter, and we
hope he will continue writing to elucidate this
and many other points which writer 80 able
and so we'll informed can discuss to great
advantage. Opinions 50 clearly put and
argued with so much force and acumen, must
prove of great advantage to Congress and the
| country. If all the plans which have been
submitted for consideration in the last few
years had been so forcibly and ably set forth
there would be little trouble in forming a con-
clusion as to the proper policy to be pursued
The more discussions of the kind that we
have, and especially at this time, the better it
will be for all. Our correspondent writes with
the clearness of Hamilton and Robert j.
Walker, our two great financiers, and his views
will be eagerly canvassed
The currency question is one in which the
entire country feels very great interest.
Money is the life of business, and the people
are only too apt, with our correspondent, to
regard currency as money. Ever since the
first days of the war it has seemed necessity
that our national issues, both in greenbacks
and bank notes, should be the money of the
country. One class of statesmen, generally
representing the dominant party in Congress,
have always manifested a profound respect
for the currency issues, and in any crisis have
always favored expansion rather than con-
traction 1t is to be feared that these men, on
\ the plea that there is not money or currency
enough in the country to do the business of
the country will favor an increase in volume
of the national issues at the coming session of
Congress. Increase in the volume of the cur
rency is with them the panacea for every
/ financial i'll. The remedy is not only ineffec-
tive, but positively hurtful. 1t not only puts
off the day of resumption, but makes it impos-
sible to equaize gold and greenbacks. If this
policy is continued direful calamities will
spring from it in the end, for it is impossible
that public confidence should not ultimately
be weakened with an immense volume of cur
rency representing only the national credit
This is tower of strength, we know, but no
treasury seal is sufficient to make irredeem-
able promises to pay safe currency for
country.
The republicans of more liberal school
those who were not educated in the policy of
the old line whig party nor taught to vene-
rate the United States Bank-hold on to the
greenback system, but seek by various de-
vices to make the legal tenders assimilate in
value with gold. General Buffers plan of
making customs duties partly payable in cur
If it could be made to work the desired end
in practice it would answer every require
ment: for then we should have what is more
desirable than an elastic currency or cur
rency convertible into Understanding bonds
namely, convertible currency. The term
convertible currency can have only one mean
ing, and that is currency convertible into
gold without the payment of heavy discounts
| The trouble about this plan is that to the
ordinary Congressional mind it is mere the
ory-an abstraction that may be argued, but
never realized. If we wait for Congress to
/ bring about an end so desirable as the equal
ization of greenbacks and gold, we shall have
| to wait very long time. Unlike the states
men of an earlier era our public men no
longer understand finance and taxation, and
/ it is to be feared they will not learn wisdom
! in the present generation.
Another plan is that of few democratic
\ leaders who cling to the hard money basis as a
/ tradition. These would sweep every national
bank note and every legal tender note out of
existence, and depend simply upon gold and
silver for currency. If this plan could be
| carried into effect it would not be resumption
merely, but the attainment of something
which never was attained before; for then, If
we had any paper money at all, it would only
represent on its face the gold upon which
it was based. This may be disposed of with
out word Of comment-it is dream.
1t is plain, then, that we shall at least be
compelled to retain our greenback system. In
retaining it we have two especial duties to per-
form-to prevent its expansion beyond the
present volume of the currency, and to equal
ize it as nearly as possible with gold. AS we
have already remarked we should then have
practically convertible currency and with