The New York herald., 1874-10-02
SPECIE PAYMENTS.
The Two Main Categories of the
National Debt.
CURRENCY NOTES DISCUSSED.
How Specie Payments Can Be
Resumed.

Mr.. Ernest Friquet has written an interesting
letter to Mr.. John sherman, Chairman Of the Sen
ate Committee on Finance OF which we give the
most striking portlons:-
l. My first proposition is that the basis OF the re-
sumption OF specie payment in the United States
lies before you. ready al hand IN the unquestiona-
bic and unparalleled pubic credit oil the United
States.
II. Ny second proposition IS, that upon this basis
OF the puollc credit ~ the unIted States nothing
more is needed to bring about the resumption OF
specie payments than simple act OF Congress.
THE NATIONAL DEDr
The United States deDt consists OF two main cat
egorles
First funded debt five per cent and six per- ,o o,o
Second currency notes OF floating debit. Ss20oO0
Total exclusive of minor ite 900
Eacn OF these categories Is equally vital to the
credit OF the Republic, and each must De sacredly
Congress, the noat5g debt IN the iorm OF cur
rency notes, should be transformed lnt0 q funded
debt at five per cent, the total indebtness o. the
Republic would not be changed. The two categO-
ries would be in used into one. The capital OF the
dept would stlll be The same.
THE FLOATING DEBT.
III. My third proposition IS that the floating
deor should be transformed into funded deDf,
not at It's assumed value expressed on the acc
the notes, but at the real value expressed IN
the market price OF the notes IN gold at the time
of transformation. For thus there are IN my
opinion two clear and adequate reasOns:-
FTst-The United States have never bound
themselves to an immediate redemption OF the
debt. IL Is impossible Tor the bearer of one Of
these notes TO compel the United States to re-
ury offers such an immediate redemption, the
Treasury m0dl1es and improves the position OF
the holders OF these notes, and has an equitable
right to the compensation offered oy redemp-
ton, not at the par face value, but at the real sell
ing gold value OIL the notes.
CURRENCY NOTES.
Second-The currency. notes have never been
taken by any holder at their par IN gold. No man
can say that he has paid SIS Ia gold or a Treasury
n n n w r "A nnt tor
which tue holder paid less than $5 in gold, there
fore, would be Tor the Treasury TO present the
holder with premium or pront at the expense OF
the tax payers OF the nation. This the Treasury
which is but the trustee OIL the public moneys iOr
to DO It's sole duty IS to settle the lawful uebts OF
the nation IN conformity with the national honor.
Admitting the force OF these reasons which con-
celve to be lnc0nteStable, what material results
would follow from the redemption on hisprinciple
OF the foatng debt
The $3s2 600 900 OF currency notes actually In cir
culation In the United States being offered to be
transformed into 1ve per cent bonds at their
actual selling value in gold would represent at the
average ruling discount OF ten per cent the follow
Ing sum In bOndS:-
Treasury circulation .......... $3s2 O0O 700
Less tel per 3e2oJoW
New government five per bonds $3ia 900
HOW SPECIE PAYMENTS CAN DE RESUMED.
~. My fourth proposition Is that the conversion
upon this principle OF the actual foating debt of
the United States into new government loan at
five per cent can be made the sure and sale means
or Immediately accom- pllshing the resumption OF
specie payments. How is this to be done Having
brought myself now to the point OF departure OF
the Whole movement of the plan / have to offer
proceed more fully and less formally to develope
1t. propose that Congress shall pass an act
authorizing the Secretary oil the Treasury to create
print and offer for sale, $343 500 900 oil government
gold bonds OF equal character ana ike forms and
bonds already issued, but bearing two conditions
peculiar to themselves
FfTSt-The purchasers OF the new bonds, which
may be called from their origin bank note bonds,
must pay Tor them exclusively In currency notes.
bind himself to deposit these bonds Immediately
in the Treasury, receiving In exchange Tor them
ninety per cent OF their face value III new bank
notes redeemable In specie at sight at the Treas
in this way the withdrawal OF the Treasury
notes from circulation will be Immediately bal
anced by the issue OF the new bank notes. There
Will, 1t Is true be difference the amounts for
instead OF the $685., 600 900 the actual currency
notes the Treasury can issue but ninety per cent
on the $34S, 100000 OF the new tonds, making
S3Os, ,42oO 900 OF the new bank notes. How this dil-
ference OF $73 000 600 In the amount OF the Clrcu
lation can be at once made up Will hereafter
show. What wish at this point to insist upon is
this conversion would offer to the public not for
submitting to the resumption OF specie payment
BY ne Sy s ew Ga o a as sa T
or just as swiftly as its own necessities may
dictate.
NATIONAL BANK NOTES.
But the greenbacks are not the only paper Cir
culaticn OF the United States. You have to-day
With H' the saSa % Of gre greenoacSs total 81
$742 0OO, ,000 and this amount, 1t appears, Is ad-
mitted to be inadequate to the exchanges OF the
country. Is my plan, therefore, besides reducing
the volume OF the greenbacKs as we nave seen, 10
destroy the national bank notes also2 BY no
Wnat is the origin OF the national bank notes'
They are notes issued by private corporations up
Of government bonds deposited against them IN
the Treasury by these corporations. In other
words, they are issued by private corpoirati9nns
conditions upon which the Treasury Is TO issue
It's new Dank notes against its new bonds. All
that will need to be done by the banks, then,
In order to keep in circulation the equivalent Of
the $500, 900, 600 OF bank notes now circulating
win be to effect an exchange OF notes with the
Treasury The ''greenback" bank notes will dis
appear and in their place win appear "yellow
backs' or "redbacks," or any color you please.
The guarantees will be entirely unchanged.
THE MEANS OF CIRCULATION.
have now to explain how these new bank
Clear Clear from What have already said, that the pur,
OF the new bonds are 10 be required to de-
post their bonds IN the Treasury receiving IN ex-
elusive privilege which the national banks
against a deposit OF government bonds viii
be abolished. Any holder OF these government
bonds VIII have as much right as the national
panks to obtain specie notes against them. These
specie notes will be de .JdctO anonymous notes;
they will not be the creation OF any private bank
ing corporation Their value Will depend aoso-
lutely on the deposit OF government bonds which
they represent, and they VIII be payable az the
act of Congress, they will bear upon the lace the
date OF their issue the date Of the act authorizing
their issue, and their value In specie, payable at
the Treasury. To establish their authenticity
Congress must authorize the creation within the
Treasury Department OF
THREE NEW BUREAUS.
Ffrst-The Bureau OF Deposit or Deposit ONCE.
This office will give cerJncate that or has
deposited so many bonds.
SecOnd-The Bureau OF Printing, or Printing
ONCE. This office, alter presentation OF the de.
posit certificate, VIII proceed to strike on special
bank notes to the value OF ninety per cent OF the
bonds certified to as deposited.
Thtrd-Tne Bureau OF Issue, or Issue ONCE
Thi ONCE, after verifying the previous certificate
will deliver to the depOsitor his bank notes.
The certificates and signatures OF these three
offices borne upon the bank notes will
establish the facts OF the deposit OF
the bonds, and OF the legitimate issue OF the no:es
against that deposit. The Treasury VIII be respon-
sibe for the authenticity OF these certificates and
these signatures, and Tor nothing more And
through this responsible action OF the treasury
the bank notes will be put into circulation.
THE TREASURY AND THE PUBLIC.
nae MI m no