New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-10-07
SPECIE PAYMENTS.
MIR. NORDHOFTS PLAN.

To the Edtt0r OF The Trtoune
SIR: You have bad so many plans for resumption
proposed that should be ashamed to appear before
you with another, were 1t not that the plan ! ofer
below would, believe, not only enable us to re-
sumo specie payments at fixed period. but IN the
meantime help the Government to stop lying. First,
wish to state the main elements Of the problem:
First Under the present laws the banks are per-
mitted and required to redeem their bills in green
backs. They may, Of course, redeem also in gold
but of course they will not, while gold bears pre-
MUM.
Second II results that practically they must re-
deem in thing Of which there is strictly limited
quantity. When banks redeem in gold they have
all the world to draw from and everybody knows
that. granted a sufficiently urgent demand more
gold will stream to from all the countries Of Eu
rope as it 1did in 1857 with gold redemption.
scarcity of redeeming material can last therefore
only until the force Of our demand is felt abroad
But more greenbacks can be obtained only IN Wash
ingtOn, and scarcity of redeeming material If this
consists Of greenbacks, be remedied only by an
act of Congress.
Third: Every effort or offer to decrease the guam
tity of greenbacks is a threat against the banks,
which, however sincerely DESTROYS to return TO spe
Gle payments, must resist o mode of contraction
which would destroy them by lessening the quantity
deem their bills.
Fourth Every offer or effort to increase the issue
of greenbacks must for the same reason, have the
instructive sympathy of the banks-no matter how
averse they may be to it prnciple-because more
greenbacks' means, to them, the hope of greater
abundance of the thing in which, by law they are
obliged to redeem their. bills
FVtk: Hence the policy of contracting the green
back circulation, while still Obliging the banks to
redeem" in greenbacks, is not only bad, but
practical because, if it could be forced through t
must destroy the banks, and they will very nat
urally resist, and always have resisted, as
they feel the rope called contraction" tightening
about their necks.
Sixth But to redeem bank bill with green
back is surely only bad joke. 1t is in plain words,
to swap off one piece of paper for another. When
have given up my National bank-bill and pocke,ed
my greenback am no nearer gold than was be-
FORE and in one respect may be said to have made
poor trade, for National bank bill is note with
ample collateral security; a greenback is a note
without collateral. If National bank fails, can
call upon the Secretary of the Treasury to redeem
it" bills for thousand dollars in the bills Of the
failed bank he may give me the equivalent IN
United States bond; but a greenback is mere
broken promise to pay, made by corporation which
cannot sue. and which has no capital or reserve.
Sereah: That is to say, redemption of National
bank notes with greenbacks is farce. Why not
stop it'
Eiqkh: Thus, let Congress formally and directly
legalize the suspension of specie payments BY tho
banks for specified period. say six, eight or ten
years; and at the same time repeal the law Obging
them to redeem their bills with greenbacks The
banks do not pay specie now the present system, IN
fact and practically legazes their SUSPENSION OF
80. ,.l.~
a sham REDEMPTION no better than trading jack
knives. If for this indefinitely continued sham We
substitute law setting period for actual redemp-
ton, and removing the useless and cumbrous shaLn'
shall we not be better OIL Z
Ninth: Then let Congress enact that at least one
quarter of the whole greenback circulation shall be
withdrawn and cancelled in each year. and that an
equal amount of National bank bills, secured. AZ
now by pledge of bonds shall be issued as the green
backs are withdrawn. If more National bank notes
are called for, then more greenbacks to be with.
drawn.
Teuth+ Let Congress further enact that from the
date when this change begins. all National bank
notes shall bear upon their face the declaration that
the bank promises to pay dollars TO the bearer
Oh the 4th of March, 1884" or whatever date might
be fixed for resumption.
Elereah: Under this plan there would be no con-
traction or forcible dmuution OF the Volume OF the
currency.
Tpeldh: We should simply provide for uniform
paper currency secured by pledge of United States
bonds and therefore safe and eliminate at the same
time the greenback part of our paper money which
has no security and is the only misehieyous and DIS
honest part of it. To legaze the suspension of tho
banks would make no change, for they are allowed
by law to refuse specie now.
Thirteenth: The struggle tor more paper money
would take less hurtful shape, for the Government
would no longer be asked to issue frandnient
promises to pay and to every demand for an increase
of the volume of the paper currency beyond Is
present amount the forcible aud proper reply would
be- Redeem your bills in specie and you shall issue
as many as you please"
Fourteenth: A greenback is simply Government
fraud. The greenbacks are the least valuable ana
the most mschievous part of our present paper cur
rency; the least valuable because their holders nave
no valuable security for their redemption as the
holders of national bank notes have; and the most
mischievOus because they are the favorte pay
things of demagogues and will be as long rs they
exist If we have no creenbacks, we shall be md OF
Senator Morton and his tail of more greenbaeks'
screamers which will be an infinite relief But Also
when they are withdrawn, the Government VIII stop
living. which will be an advantage to its credit.
Fifteenth: A National bank note whose ultimate
redemption is secured by deposit OF United States
bonds, and which promises on its face to pay dol
lars at a specified time, is an honest note which
bank president need not be ashamed to issue II he
has the Governments and the nations consent
Sixteenth: Suppose there should be redundancy
of this kind of money it could not harm the Gov
ernment's credit, for the Government would have
no part in it, except to sell the bonds and redeem the
notes of failed banks The natural demand for paper
money would-wth such limited suspension OF spe-
Gle payments a. / propose-guard aud limit tho
amount issued and as every day would CONSCIOUSLY
bring the banks and the country nearer 10 speeie
issu cauld re- ulf