The Rutland daily globe. [volume] (Rutland, Vt.) 1873-1877, 1874-06-11

these notes. and which declares that they
shall be "lawful money and legal tender"
fer certain purposes. But the same act,
in the same sentence, takes good care that
for certain other purposes they shall not
be lawful money. Here, surely, come in
the governing laws" that are $50 subtitle"
Can a thing be, and at the same time not |
be Must l bow before this mystery Or |
may smile at it?
Some plain men, not FAMILIAR with the |
mysteries of finance, have been SO simple |
as to think that the formula, "The United |
States promise to pay" should be taken lit
orally and not in some Pickwickian sense. |
They hold that promise which is not kept |
is broken, and thata promise made with no
intention of keeping it is a lie. They hold,
therefore, that the United States are bound,
in common honesty, to pay every one of
those notes, dollar for dollar, at the earliest
practicable day They hold that, as the
giving of those notes instead of money to
public creditors was justified only by the
distress and urgency of war, so the refusal
or neglect, in time of peace, to arrange for
the earliest possible payment of the debt
they stand for, is unjustifable, and there
fore dis graceful. | confess that | am sim
pie enough to be one of them, and | cannot
but regret that you, apparently mystifed
subtitle" and inscrutablc. lose your hold
on the 'obyious and palpable" moralites
of finance. Tbese-thc moral obligations
and responsibilities of the relation between
debtor and creditor-thc moral obligations
of veracity and fidelity to engagements
are the only clue that can lead you out of
the labyrinth. Let the government of the
United States regard with due obedience
the moralitics of the relation between bor
rover and lender, and those governing
laws which. like all Gods laws in nature,
are at least as stubborn as they are "sub-
| tile, which do no eludc the keenest scru
tiny more completely than they elude all
attempts to repeal them by human legisla-
tion-and which are sure to execute them
selves vindctively when they are tritlcd
with-will do the rest.
Two things are required by the ''obvous
and palpable" moralities First, the gov
eminent must make all necessary arrange
mcnt, to pay, at the earliest practicable
date, its own circulating promises to pay;
and secondly, it must take care that the
banks of circulation which it has created
shall not escape from the necessity of pay
ing theirs. Ift the government will do these
two things-so clearly within its province
| so manitesly its duty-it may safely leave
! all other questions about initiation and con-
| traction Of the currency TO those govern
| ing laws" which it cannot abrogate, and
which according to your frank and honor
able cOntcssion) the members Of congress
do not understand
Nobody supposes that 500, 100000
treasury notes can be paid now, all at
once. or that it woull be safe to fix future
day on which they shall be payable at sight.
But everybody knows that they can be
gradually. by regular miscellaneous, without
| once cNlaustlng the treasury, without OPP
| pressing any interest of honest men. To
show what | mean, let me suppose an act
of congress providing that on the list of
July next, and on the 1st of every month
thereafter, ten millions of the greenback
''money" then in the treasury shall be
destroyed, and that in their place there
shall be issued notes to the same amount
in the same denominations, and having the
same quality of illegal tender" but payable
two years after date; providing also that
after the end of this year, 1871, the sub
stituton of such post-notes for the indefi-
mite greenbacks shall be at an increased
rate, say fifteen millions monthly, or
twenty, till the 800, 100000 shall have
been cancelled. Such process would be
neither contraction nor expansion; but it
would be unequivocal proof of a purpose
on the part of the government to deal fair
ly and honestly with every public creditor,
and if the first payment Of actual units
of value" from the treasury, in exchange
for its long dishonorcd promises to pay
them should take place on the 4th of July,
1876, it would honor the centennial ami
versary of our national independence,
which, but for President Grants veto of
the late currency bill, we might have been
ashamed to celebrate.
.. If the government will honestly pay
its own notes, its duty of requiring the
banks of its own creation to pay theirs will
not be difficult. As for free banking" |
believe that every honest business ought to
be free, in the sense of being open to uni
versa competition, and that dishonesty in
whatever business ought to be suppressed
and punished. If one company of CAPT
talists are permitted to incorporate them
selves and to set up a bank Of circulation
on complying with certain conditions, why
should not any other company be permitted
to do the same thing on complying with the
same conditions? But whatever the gov
ernment may do by way Of regulating or
restricting the banks which it has created,
I, let it not attempt to abrogatc those "gov-
, erning laws" which are beyond its control,
and which they do not understand. The
'obvous and palpable" truth about bank
notes is that they are not money, and that
they are worth just as much money as they
can be exchanged for on demand. The
''obvous and palpabe" duty of govern
ment in regard to banking-as in regard
to baking or shocmaking-is not to guard
the business against the perils Of compe-
ttion, but to guard the public against the
evils of monopoly, and to punish dishon-
esty. Let bankers understand that if they
5 issue notes which they cannot pay, those
notes will surely and speedily come back
to them, and their affairs will be wound up
Let them understand that their business il
open to universal competition, and is there
: fore under the control of "governing laws
= which, if too "subtle" for scrutiny, arc
also too memorable to be despised or disre
= garded, and they will find out that "freC
banking" has its own securities and limita
Z tons. The one duty of the government il
regard to its banks is to take care that they
deal honestly with their depositors and witt
the holders of their notes. Whateve
Il bank has promised to pay it should b'
it compelled to pay or be broken. Let i! BIZ
j. understood that free banking is not free
cheating, and what reason is there VIII,
bankers should not transact their business
q according to their own discretion, and n
o their own risk, under their responsible,
/, to the laws of nature and to the law of tn,
land?
: My humble theory of the finances vii
|, doubtless be derided by men who thinl
Y they know all about things which "elud
e the keenest scrutiny 1t is simply this
Let the government honestly pay its owl
: debts and compel its corporations to pa.
y theirs, and leave the rest to the people AM
,. to God. Respectfully yours.
LEONARD BACON.
= New Haven, May 26, 1874
. HIUE EOTINOX HOUSE.