New-York tribune., 1874-06-11
THE LAST FINANCIAL SCHEME.


have at last reported. Under the circum-
stances what they propose is of no conse-
quence, but nevertheless it seems fit to make
few observations on their bill.
/. Whether to permit the issue of one thou
sand dollars in National bank notes in cOnsid-
Grafton of the withdrawal of three hundred
and seventy-fve dollars in legal tenders is
called by this Committee contraction or inf1a-
ton we do not know; but suppose we re-
verse their proposition. Suppose one thousand
dollars of the bank note circulation to be
withdrawn and their place to be supplied
with three hundred and seventy-fve dollars
in greenbacks. At this rate, $l31 900 in
greenbacks would supply the place of the
$3.50, 600 bank notes now issued, and S513,-
25O,OOO in greenbacks would supply the place of
the whole S732, 100000 in greenbacks and bank
notes now made use of. That is to say,
S513.250.000 of money, with great decrease
in the number of banks, is to be compared
with S732, 100000 of money with bank to
every 10000 inhabitants Every one sees that
such a change would be a double contraction
"a contraction in the volume of the currency,
and contraction in the facilities which banks
afford for making payments without the inter-
vention of money. But if this is double con-
traction, the scheme of the Committee, which
is the direct reverse of it, must be double in
fiation. The volume of currency they would
have expanded at the rate of eight dollars
issued for three withdrawn, and the facilities
for making payments without the use OF
money they would have increased by enlarg-
ing the number of banks.
2. The eighth and ninth sections provide for
a complicated operation on the greenbacks and
funded debt to be commenced in 1878. just
what would be done under these sections we
think no one could tell. Before the time
they have fixed two new Houses of Repre-
sentatives will have in due time succeeded to
the power of the one now existing, and the
terms of two-thirds of the Senators and of the
President will have expired. 1t is not within
the scope of human foresight to tell what in
the mean time, will have been done with this
bond redemption project, supposing that it
should now become the law. 1t is not a
thing, it seems, tor which any preparation is
required. Why then can it not go into opera
ton at once, simultaneously with the infa-
toni
3. Again, suppose that this project for ex-
changing bonds for greenbacks, paying out
the greenbacks for current expenses, and using
the surplus gold revenue for redeeming six
per cent bonds, should survive the Forty
fourth and Forty fifth Congresses, and actu-
ally should be set agOing. Suppose, further.
that the FOrty-sixth Congress conclude to stop
it, Just as the Forty first Congress stopped
Secretary McCullOch. What, we should like
to know, will have been accomplished Far
be it from us to pretend TO understand fully the
workings of this novel machinery for getting
back to specie payments without specie and
without a contraction but as far as we can
Judge of the invention, if it should be able to
20 at all, and should be run for two years,
and then stopped, the results would be
about as follows: 1. The Government would
have sold for par in greenbacks some scores
of millions worth of bonds, at q loss Cat pres
ent prices) Of twelve per cent. g. The Gov
ernment would have deprived itself, without
any sort of compensation, of an annual rev.
enue of six or eight millions which it now de-
rives from sales of its surplus gold. 8. The
Government would have transformed some
scores of millions of six per cent bonds into
fives, which can be done now without any loss
and with much less trouble 4. There would
be just as many greenbacks and no more gold
than there would have been if this attempt to
get out of the wilderness by travelling in
circle had never been made. In other words,
nothing would have been done. Now We do
not deny that if the Government will al,pdys
give its five per cent bonds for greenbacks,
dollar for dollar, the greenbacks will be worth
nearly as much as the bonds Our objections
are, first, that the machine is of the tread mill
species--whenever it stops the poor creatures
that move it find themselves just where
they were when they set out aud, second,
that an obligation of the United States,
bearing five per cent interest, is an entirely
different thing from the universally accepted
standard Of value, which is defpite ouan.