New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-02-07
SENATOR ScHURz on TIE FINANCES.


AN OPEN LETTER TO THE sRNAToR-GRADUAL AND
STEADY CONTRACTION TIE TRUE FINANCIAL
EENEDY-A PROPOSITION TO DESTROY EVERY
DAY CERTAIN QUANTITY or GREKNBACKs IN
THR TREASURY
To ne Hon CARL scHURZ.
SIR: The moment when you would enter
upon the OF the financial affairs Of the coun-
try and particularly OF the absorbing Of the return
TO specie payments has expected by many patriotic
men with keen solictude You have the inestimabe
faculty OF dealing with subject at to clear
OF the maze OF techncaties in which II s entangled
while IN the hands OF craft profession, and 10 lift
out of the twilight in which II remains shrouded while
treated by laymen After what you have said certain
leading idess may be expected 10 take undisputed
OF the public mind and 10 overcome all tbe
struggles OF sslfinerest to rentroduce confusion In
haton OF the irredeemable currency must cease,
and must never be resumed. Our debts must
not be left 10 pay themselves under the
favorable influence Of the moon upon the tides but
must be discharged like othei debts by exercise of
the volition OF the debto. And our promises 10 pay
must 70 be promises perpeually broken. These
points settled the path ia cleared for the inquiry INTO
the best possible OF efecting the design. This
investigation also should cease 20 be matter discussed
exclusively by professional bankers and hnanciers
the hand, and by patriots and phanthropists not
alive 10 the difficulties of the subject, the other.
plan should be adopted so sound to be proof
against all just criticism, and yet simple as 10
mend itself every understanding It's distinguishing
should be capable Of being expressed single
phrase qualified To a oatcbword In discussion
and yet not calculated 10 mislead.
The phrase resumption OF specie payments" does
not satisfy this requirement 1t is msnomera Roland
for an Oliver. 1t first coined when banks had failed
70 redeem their issues Its revival at the present time
suggests the idea that the United States are great
bank who have been dscountng paper too freely and
keeping too large amount Of circulation II seems TO
say that the Government ought 10 provide large specie
reserve pay greenbacks when presented for the pur
pose to curta the circulation and in other respects to
90 on banking az before. Such suggestion would be
wholly inadmissble Government il not qualified IN
do a banking business, least Of all the Government Of
the United States The reason that ordinary banks can
keep a circulation afOat that the short which
they discount afford occasion for the speedy return
to their counters of every bill they issue Govern
Inent discounts paper and there is nothing to carry
its issues back its vaults except the collection OF the
internal revenues process far too sluggish TO keep the
paper money above par. A very small proportion
Of the annual revenues may indeed be safely
represented by paper currency, Or rather,
it might be, the constant temptation
20 initiate the volume could removed N the green
backs were reduced about fifty Millions they would
probably rule at par ana DC sound and convenient but
that can never be while they into the hundreds Of
ments should advocate the withdrawal OF the green
backs II contemplation OF their withdrawal
the return OF peace that they were Issued IN time
war and the withdrawal of greenbacks was the safe
and rational process inaugurated by Secretary Me
Culoeh before the snesequent speculative poiSy was
geucies OF compel us 70 exact revenue which tic
people could not possibly pay ID com, II we issue
While the war expenditures continue The greenbacks
will flow out of the treasury as rapidly As taxation
draws them in At tho cessation OF hosttes the rev
euues will remain the same az now, and outgoes Will
fall Of Consequently the greeubaehs entering the
Treasury vaults viii largely exceed those PAID out
will be the time by destroy The excess 70 cancel
the deDt which they represent" Two circumstances
have frustrated or rather have retarded unth now he
execution OF this scheme One the haste With which
taxes reduced, the other the anxiety shown by
using the surplus revenue In reducing the prhclpe Oh
tie bonded debt reduce the rate OF interest Oh Gov
ernment bonds. The nation committed the fatal mis-
take OF angling after cheap money by hegecng lis own
credit instead OF improving lie credit and thereby Al
The plan, then is certainly simple and intelieible
Let gyeu amount OF geeubdcks found ~ the Treasury
he destroyed by nre every day untl HI are Destroyer
or until they have range permanently four OF
i've per cent above par, which shall hrst happen
OF course. one or two obvious oDlect,os Pieset mem
that the Government Will bOt DC hDe 10 spare
50 much money very likely GTs1 ~ sd et p
he issued We cannot expect TO pay of our floating
debt and reduce funded debt At one ana the same
instant We must borrow on time 10 get rh OF cur can
loans. If understand some pubicists CORRECTLY u is
feared that the measure proposed by draining the orc
lation of legal tenders faster than specie could DC
brought replace IT, would drive Inc banks INTO sus
pension Is not this Ike tue mSgIVng once entertained
that the wheels OF q locomotive would turn without
travelling smooth rails nniess they mad cogs In Them
Tie greeubacKs destroyed would not be the
greenbarks Of the banks, but those or the
Government. The growing scarcity OF the greenbacks
would enhance their value, and thereby enhance the
value OF the egateuder reserves Those reserves are
considered sufficient al their present values why not
at the ereateri The appreciation OF the greenbacks
would appreciate Of the banks, for BON 10 10
make up the value OF the currency III The banhnotes
not presented for redemption when tue currency
redundant why should they when tho currency IL be-
coming scarceri True. the Rreenbacks would sppre-
faster than the Dut they could mol poeaiDiy
go much higher than specie, aud III banking can De
carried upon n specie basis, why not upon OASIS
which is only approaching specie The RAPID apprecia-
ton Of the geeDbacRs may cause the banks " be eau
them ample time TO anticipate the market, and the
demand Tor discounts Will Increase IA the currency
diminish
But the objections that weigh heaviest ID the minds OF
nost meh Will be that the involves contraction
"n7 this bugbear which caused It's abandonment I'M
ue no IsN AdmIDistraton Standing alone II does IN
NOi'e contraction. Perhaps contraction ~ desirable,
anu II ~ 10 IL could Ia time I've proved 10 be 30, TO The
sasiacuoh vi majority Of the people. Fortunately,
no"oNo VIC are mol compelled 10 undergo such labor
fO TUG measure docs not necessarily involve contrac-
ton HnHe ~ IL cutting down the egaltenders, other
procehes may DC set Al work toswe the cuency the
legitimate demand OF require Indeed there
great reason why such processes should he
lnaugurated the DESTRUCTION OF the greenbsoks viii
probably nocessItafe loan, aud bonds Will ~
be- sold Let Them be bought By national banks,
Old and Ueed as the basis for further national
bank notes Elmer remove absolutely Nil restrictions
the amount Of national notes " be issued
curing only thai they be deQ atey secured OF that
lie thought too radical, allow Lhe baDk note
circulation 10 III the bal only n tho