, 1873-02-14
MONEY C0miEsaERCE,
MONETARY


bo made for some time.
In the open market there is q better supply Q
money, and local stocks are more firmly held
and higher prices asked. Money is freely OF
5ered On these at 10 to Il per cent
Exchange continues very weak, owing to
sargor supply, and was offered freely at Toe pc
e1,o00 discount.
THE REAL VALUE OF GREESBAcKs.
In response to some queries lately made by
citizen Of indianapolis, Professor A. L. Perry
whv occupies the chair Of Political Economy il
Williams College, Mass, assenta to the following
proposition:
That the true value Of gold our currency insteat
of being L. per cent premium, would be ct least 40
our lawn had not in effect demone1zed 1t, mud II Mr
Government gold.
This is only another way OF saying that il
greenbacks were not E legal tender, they would
be worth only about 70 cents On the dollar (7111
with gold at 400, instead Of s9A, as they are
when gold is at 112.
OF the means by which ho arrives at this esti-
mate Of the real depreciation Of greenbaeks,
Professor Perry says:
Tbs comparison OF the amount Of currency per
capita IN 1861 with the present. will ba test to de-
tezmne t. comparison e. ctirrent prices At the two
but the test att.,nahle-
Now, to sustain this theory, it must be as
sumed that all commodities in this country are
30 per cent higher in currency than they wore in
1861. It is possible that this may be tho case,
bet il 30. it must be remembered that. at least,
half Of the increase of prices slnce
1861 is due to increased taxation, and
the increased cost Of transportation in the
United States. The latter is, Of course, to some
extent, only secondary effect OF increased
taxes but. tho growth Of tho country has been
so great that evoll il ne had q specie currency,
and there had been no increase Of taxes since
1861: the cost Of transportation on the great
trunk lines OF railway would be greater than it
was in 1861. But, aside from these considera-
tions, it is wel-establiaLed fact that prices Of
commodities are higher in Great Britain and
other countries in Europe, where the currency ia
not affected by onr deprecated cur
rency, than they we're in 1861 We
should, therefore, regard Professor Pery's
test Of comparison Of prices as an unsatisfac-
tory one. II the Legal~Tender act were repealed,
the value Of greeubacks would depend entirely
upon the time when they we're to bs redeemed
or funded into an intereBt-bearing obligation.
II they we're redeemed or funded at once, they
would OF course be worth par in gold. The rate
OF interest for money On long and secure invest
therefore, greenbacks we're not a legal tender,
but we're certain to be redeemed at par in gold
at the end OF ten years, they would be worth
nearly GO cents on the dollar in gold, because an
investor could pay nearly that for them and get
over s per cent simple interest at the end of the
ten years by the redemption Of greenbaehs
IN annual surplus Of say s50, 0,000, 900 annual
revenue. II this surplus vera directed as fast
rs collected to the redemption Of grecnbacks at
par, the whole S356. .0o0, 900 would be redeemed
and retired, and other currency would take their
plRce by the end OF Eeyen years. An investor
could thereiore AFFORD to pay ~ cents on the
dollaE in gold for them, even il he did not pre-
cent them for redemption until the last green
backs we're redeemed nt the end Of the seven
years. But, il the ESQ, GOO, 900 OF annual rev.
xnue we're devoted as fast as collected to the re-
cemption Of greenbncks, SOHO OF them would
the rede1nptions would probably show three
years to be the longest time for which
interest would have to be deducted, and IS cents
in gold would be about the real value OF green
hacks without any reference to their character
Congress would devote $4,000 900 annually to
the redemption Of gTeenbacks 1t might repeal
the Legal Tender act, and yet greenbacks would
riso to par in three OF four years But If the
$50, 900, 900 per annum we're redeemed-say By
receiving them for 25 Per cent Of the duties on
imports, and the Legal-Tender law still main-
tanned, VIC should have greenbachs at par in gold
within two years, and probably in one year. This
vas in fact the principle Of Secretary
elcCuHoch's plan OF getting back to specie pay
nente, plan not understood BY the people 1T
the time he tried it, but one to which resort
will have to be made whenever resumption is
successfully inangu1ated. The value Of green
backs does not depend 80 much upon their legal
quality, nor upon the amount OF currency per
Sfdpifd in the country as it does upon the pros-
8tect OF actual redemption in gold. This is the
1hain point for legislators and fnnnciers to keep
I'm view. With greenbacks at par, no one need
1ronblo themselves about the amount Of cur
rsncy PEI. capita in tho country. II there is not
enough, the commercial community will supply
itself with gold aud ei1rer without any 1eg1sla-
tion Of Congress. As long as specie 1edemp-
tons are maintained, there never can be too
much paper currency for any considerable time,
as it will go hons to its issners for redemption.
LOCAL sTocK AND BOND MAnEET.
Me.sra. Lunt, Preston l. Kean quote as follows
ffis saff