Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-11-04
THE FINANCIAL TROUBLES.
what a Pennsylvania Congressman
Thinks of the SituatiOn-The Causes
of the Trouble and the Remedies.
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Thinks Of the SituatiOn-The Cause
of the Trouble and the Remedies.
From the New york Tribune.
WASHINGTON, Oct. 30.-Representa
tive Kelley, of Pennsylvania, on ac
count of his long service in Congress
and prominence on. the Ways ant
Means Committee, viii probably occu
Ply a leading position in financial dis
eussions at the approaching session o.
Congress. He arrived here a day O,
two ago, and had long conversation:
with the President and the Secretary Of
the Treasury. The interview with the
former lasted about an hour, but Kel.
ley refuses to give any of the details Of
it, except to say that he was surprised
to find how closely the President s
opinions agree with bis ewn. His in.
terviewwith Secretary Richardson was
not so satisfactory, and Judge Kelley
could not, during all his talk, discover
exactly what financial policy the Sec
rotary has adopted.
Judge Kelley is an ''expansionist,' -
and In this agrees to some extent with
Gen. Butler. His method, however, is
somewhat different, and he does not be.
leve In Buffers proposition to pay the
National debt, principal and interest,
IN currency. He traces much of the
present financial trouble to what he re-
CARDS as the folly of Congress and the
mismanagement of the Treasury De-
partment in producing contraction of
the volume of the currency. AS might
be expected, he is opposed to speedy
resumption of specie payments. He
says he hears of two plans for resump-
ton. One is a contraction of the cur
rency, and the other is by imparting to
the currency volume hexibility or elias
ITCHY, and consequent expansion at
times. Judge Kelley says, in his
Judgment, no measure of contraction,
whether great or small, gradual
or abrupt, would bring us to specie
payments. On the contrary a
vigorous contraction would produce
wide spread individual and corporate
bankruptcy, and in all probability dis
able the Government for time from
paying with regularity the 100000, 900
OF gold interest upon our bonds. We
are now, he thinks, further off from
specie payments than we would have
been had there not been great mistakes
IN our legislation and the administra-
ton of the Treasury. One great OBJ
stacle in the way is that so many of our
bonds, national and corporation, are
held abroad, causing a steady drain of
gold from the county. Kelley says the
annual amount of interest which we are
required to pay abroad, S100,000,000, is
S40,000,000 more than the annual pro-
ducts of the gold mines of the country.
Besides the balance of the trade has all
along been against US. While this con-
dition of affairs remains he regards any
attempt at resumption as absurd.
His theory is that we must have a
cheap money market, so that it will be
to the interest of capitalists to pur-
chase and hold our bonds, and to thus
get them from the foreign holders, so
that the gold interest shall be paid at
home instead of abroad. Among the
causes that have produced the present
condition Of affairs, Kelley places the
retirement of the compound interest
notes, the calling in of the three per
cent. certificates, the payment of the
seven thirties, and the formation of the
S+4, 100000 greenback reserve. All
these, he thinks, produced contraction,
made money dear, advanced the rate of
interest, and destroyed the business of
the country. The absurdity of the
proposition that the way to resumption
is to resume, Kelley thinks, is demon
strated by the fact that if the Treasury
were to announce that it would pay
specie for greenbacks, the National
Banks preferring to hold gold rather
than greenbacks, would present bills
for S12S, 100000, or $50 per cent. more
gold than the Treasury holds. Of course
the banks would not be likely to pay
out the gold, inasmuch as their notes
are redeemable in greenbacks and not
not in specie. The attempt to resume
would result simply in the transfer of
the gold from the vaults Of the Treas
ury to the vaults of the banks.
In the opinion of Mr. Kelly there are
two ways that lead to resumption. One
is to wait until our exports shall stead
lily increase over our exports, and for
eigners in payment of their balances
shall send our bonds back The other
process is TO leave the transfer of the
bonds to our own people by making
money cheap, and reducing the rate of !
To accomplish this he pro-
poses to so modify the banking law as
to make the payment or receipt of in !
terest by the banks cause a forfeiture |
Of their charters. He would prohibit |
under serious penalties the certifying |
by National banks of any check which |
did not represent an actual deposit in
the vaults of the bank. He would re- |
lieve the banks from maintaining a re-
serve to secure either their circulation |
or their deposits, because this is at |
best but a delusiOn and a snare, |
for while it induces people to |
believe that their deposits are secure,
they are not. Another project of |
Judge Kelly is to provide the issue of |
bonds payable, interest and principal, in
lawful money at the rate of one cent a
lay for interest, the bonds to be con-
vertible into greenbacks on demand. |
The Judge is of the opinion that all of |
the unemployed capital which now goes
INTO speculation would be invested in
5hese bonds. Any bill authorizing the |
ssue of such bonds should empower
he Secretary of the Treasury to invest |
he funds thus obtained as closely as
prudence would permit in the purchase
# the $40 gold-bearing bonds, and re-
Iuire him to hold any surplus of gold |
hat might accrue, for the express pur-
pose of calling in overdue gold-bearing
ponds. In this way, the Judge thinks,
5he American people would soon be-
,ome largely the holders of our debt,
md we would then be ON the highway |