The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-03-30
NALL STREET.
SUNDAY, March 20, 1874.


The week wnicn closed last night has witnessed
the greatest degradation OF American credit that
IL possible to conceive until we reach the con-
clusion that the entire nation is suicdally bent.
A Congress chosen by the people from the people
deliberately enacts q law which is neither more
nor less than highway robbery. The constitution
OF the United States expressly provides for the
sanctity OF contracts; but this present Congress
steps IN, and, overriding that sacred instru-
ment. undertakes TO Violate the secured character
OF every existing contract by changing the quality
oil the value which regulated its engagement. In
other words it assumes to say that the payer IN
the contract falling IN the acquisition OF the neces
sary tokens Of exc hange TO meet his required pay
ments, may say 10 the payee, 81 have not enough
OF the old form Of money 10 meet this thing, but
will give you these meaning his own notes. they
are Just as good" THIS does not meet the consti-
tutional Requirements, but
CONGRESS EVIDENTLY ASSUMES TO BE SUPERIOR TO
TIE CONSTITUTION.
Perhaps 1t is. That is for the President 10 de-
dernIne. Upon him rests the responsibility. In
This connection story told by a member OF an
eminent law firm down East Is pertinent as an
illustration This house largely engaged in
the collection OF bills from fishermen who pur-
chased their necessary supplies and tackle on
credit aud were dllatory IN their payments. A
concern which had made large credits in this way
receivable were al once put into the hands of the
law firm above referred to for collection. Applca-
ton TO the debtors OF the class spoken OF Tor
prompt settlement invariably provoked this reply,
"Why, paid that. l don't see why you want TO
bother with 1t again." "You did;o "Yes,
gave my note ior it, This is precisely the char
acter OF present Congressional legislation, with
but one difference. The ignorant fisherman really
thought when he had given MS promise TO pay,
that ne mad given value; but the mind must sink
TO lower recognition of the standard OF Con-
gressional instinct than is compatible with
respect for republican institutions when it &C
cepts this explanation OF recent Congressional
action. Now,
FREE BANKING, IF PROPERLY UNDERSTOOD
and applied, would have furnished the opportu-
nifty OF avoiding such reckless legislation. Those
who opposed it as an imitation measure simply
misunderstood it. 1t is in reality, properly di-
rected, a road TO specie payments Thus,
under the operation of the present National
Banking law, all restrictions respecting
the issue or currency being removed, but the
guards for redemption maintained, no currency
could be issued that did not have 20 or rs per cent
OF reserve of legal tenders gold behind It, To
commence with the legal tenders. Fixed at the
limit Of 1856 600. which represented the pledge
OF the country that they should not be increased,
the bank currency would DE limited, supp0sng
the entire amount to be In the bank vaults to four
times the amount OF legal tenders that were held
by the banks in excess OF rs per cent of their
deposits. Thus the bank averages yesterday
showed the deposits in the associated banks OF
New York TO be, Tor the week, two hundred and
thirty-nine millions and three quarters, or, in
exact figures, s239, 900. The banks
compelled TO hold % per cent OF that
in legal tenders specie az reserve.
This 25 per cent in the present case
would be SIS, 932, 727. The entire amount of legal
tenders held by the banks yesterday
$6s,el4,S25, leaving only s6,6s1, 59s as the basis
Of circulation. which being wholly avalled OF
would only permit s2e, TIC, 1872. This, Of course,
takes no account OF the
SPECIE AZ BASIS OF CIRCULATION,
because q currency based on q rs per cent coin
reserve Is as good as gold, and when we come to
issue currency upon such coin reserve we shall
have reached specie payments. 1t is equally man.
1fest that the entire legal tender circulation OF the
country cannot be gathered into the banks and
remain there, any more than could the coin cir
culation Of the country, ii We were specie
paying basis. De so garnered. And II the legal
tenders were fixed at q determinate limit, II the
President would put his foot down and say Con-
gress cannot go beyond $4,000 900, then
tile banks would quickly see the necessity
OF boarding coin as basis for the issue OF cur
coin reserve of twenty-five per cent 1t would be
equal to coin as long as ii was not IN excess OF the
requirements OF business. When it was in such
excess it would be presented for redemption and
be retired. The government, when the banks were
thus strong in coin could begin TO retire green
backs by accepting portion Of them in payment
OF customs duties thus stimulating the banks and
adding to their coin reserves. We might in this
way
WORK BACK TO SPECIE PAYMENTS
by an automatic movement which would be re-
sponsive to the ability of trade to sustain it, but
which If ever interrupted by any sudden exlgency,
would never eliminate in the great shame so
recently wrought. Better universal bankruptcy,
than national dishonor. After bankruptcy
comes settlement, restored confidence and
a fresh start; but alter a crime such as
is proposed OF issuing new irredeemable promises
to pay will come what A deluge. The Pres-
dent has reason enough to justify him IN opposing
the Will OF Congress In this matter, if he has the
manhood. This legislation, Notwithstanding the
time consumed IN debate, has been entered upon
ignoranty, misunderstandlngly, without a tul
comprehension Of its demoralizng tendency
in respect to ali values, without any clear expos
ton Of it's degrading character. II the President
will but give Congress the opportunity to review
its own action the chances largely in favor OF
the hope that its sober second thought will annui
this criminal legislation. IL has been largely In
structed since It's last action by the indignant pro-
test that has come up against that action.
THE WEST AND SOUTH LABOR UNDER A GRAVE
ERROR
which, If explained to them, might abate their
camor for the passage Of this measure. They COM
plain that the manufacturing interests OF the East
are antagonstic to the agricultural interests Of
their sections. Never vas greater error. The
manufacturing interests Of the East rest upon the
production OF the South and West Cotton and
grain constitute our national harvest and form
the basis Of our national prosperity All else is
subsidiary. But in the East men have given more