New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-03-26
LETTERS FROM TILE PEOPLE.
ADJUSTING THE CURRENCY.

sI ADJUSTING THE CURRENCY.
EXCHANGING GREKNBACKs FOR FIVE PER CENT BONDS,
THR ONLY FINANCIAL REFORM NEEDED.
TO tie Editor Of The Tribune ....r~
SIR: If greenbacks could now be exchanged
for United States Five per cent Gold bonds dollar for
dollar should not be troubled as we are likely to be,
with an accumulation OF idle currency In the banks
Had the privilege Of converting five per cent bonds Into
greenbacks dollar for dollar, existed last September
there would have been panic from an apprehended
scarcity of currency It would puzzle any man to point
out how greenbaoks would be impaired in usefulness
value by being made convertible at pleasure into Ave
per cent gold bonds 1t would be equally difficult TO
show how five per gold bonds would be injured II
made convertible at pleasure into greenbacks One re-
suit would certainly follow upon the establishment OF
| interoonvertiblty Of greenbacks and bonds they
would DO thenceforward OF equal value, instead OF
standing some IL per cent apart as at pres
ent. Tho United States pledged to re-
deem their greenbacks In coin at the earliest
practicable moment but very few ito think that
moment has come. 1t is obvious. however. that the
only objection immediate resumption is the existing
discount upon greenbacks and that anything which will
reduce wipe discount IL direo step toward
specie payment Five per cent United States gold bonds
being at par or little above it, greeDbaoks convertible
into these bonds would at rise to unless the
effect OF convertbty should DO to reduce the value Of
the bonds 1t is possible but think not probable that
ure but this result could scarcely be more than tenn
porary one while there be doubt that the value
OF the greenbacks and OF course OF whole credit
currency, would be largely enhanced. see no reason
why should not rise to par at once or very soon a,er
might be technically resumed.
Is it possible TO reach such a contamination more
speedily with less disturbancei Those opposed 10
contraction could not complain because IL contraction
took place under such circumstances, woud DC tne
voluntary act OF individual capitalists each man acting
in accordance with his own views of sef-nterest NOR
would contraction of this sort be dreaded by those who
honestly believe that our currency Is deficient In volume,
IL the law which authorized 1t rendered also an oppor-
tunity for expansion. when the situation seemed to
require it, by making bonds convertible into green
backs what all business men most dread Is the chance
OF being "cOrnered." Take out OF our currency the
possibility OF its being found really deficient at pnch
minimum quantity because all motive for boarding
making provision for contingencies III advance would
IN the anticonractionsts could not complain OF such
measure still less reason for sensible fesuinp-
oDists and those who think shame that our Govern
men should make no provision TOT reducing s treasury
notes 10 object. The Government can undoubtedly pay
interest on debt and the whole Of IT, including green
backs even If is not now prepared 20 pay tne pr
cipal II IL cannot pay the greenbacks dollar for doa
se for the gold dollar dollar and that comes nearly
to the thing have heard IL objected that for the
backs would sell its securities very cheap IL has,
know, been playing much sharper game bur when
the question Is about resuming the payment In u OF
all it's honest debts such objection would seem out or
place propose TO borrow s2oO0ooOoo in gold for
OF at least the OF five per cent gold bonds,
increasing funded debt to that extent Surely fund
ing these greenbacks directly into five per cents. which
would not increase debt dollar. would he much
simpler Of resumption and probably On equally
efficient one. =, , -
This obvious means Of enhancing the value OF green
backs to par and of throwing the desired element OF
elasticity into currency, will not satisfy the avowed
niiatonist, will it meet the views OF what may be
called the bigoted advocates Of specie payment. Tho
former demands absolute and unconditional Increase
OF the currency while the latter insists contraction
a. the only means of resumption worth considering
~ tbeP nor
pauson per &C. because cannot tell with any degree
OF precision what are the absolute currency wants OF
the country IL TO he presumed that the currency
should certain elaton to the exchanges but not
only ere the excanges afEtT az .o,ne ogs rn ctd
by cases which may be pSychlcal rather man ecoho
zeal When all is confidence vast amount OF exchange
can be effected by bills. promissory notes and bank
checks When dsrust prevails not ONLY are these means
less avaac rnf fbe Itself Is retarded in cir
culation by the tendency to hoard winch then springs
au,ion nf the problem x attempting fix the
between the currency and the exchanges OF any com
mercal country No ch ratio can be established, nor
If ascertaiped for to-day would follow shat the same
II is highly desirable therefore, that credit currency
should have with Itself /. principle o. adjustment
whereby WAY without violence OF strain Increase or
diminish volume rs the demand TOT IL rhss ana alis
&c Is thag but desirable that the business Of tue
eoantry should depend Treasury reserve and Treas,
uy policy short u the adoption OF the British credit
system which in soae OF its features Is n0t suitable To
sond and elastic currency as the making OF greenbacks
geable with Government bonds bearing gold
ipf al
m he suicient kcsp said bonds at IN the markets
OF world At the present TINE I'VE per cent gold IN
rrrst seems ~ be the best rate At which Government
securities can placed without discount and for that
20 keen the greenback at par with gold lit should
he geabe with five per cent gold bonds Three
sxtyaye bonds would stand faB below par At the pres
emit time aud greenbscks cOnye ble INTO them would
be- liable TO the discount. when the nrse arrives
when 65 bonds bg negotatetat par they may and
should e substituted five pee cent bonds. Inere ID
no ma gc in fraction Of 365 hut the pie cSab
Ished in the Interchange of bonds aud RPcnbacEs
shonld be the latter at PAL by some Practicable
mode OF redemption. 1t Will hardly he pretended that
the opon TO convert into stock below would have
that effect - ,---,-,-
interchange o grrenbacks and five per cents ght take
ace at the pleasure Df the holders ii would do all that
desirable expedient IN the way Of currency reform
AT he present time The measure is one In the interest
neither contraction nor EXPANSION, bnt merely pro-
ydes a simple and etectual means OF currency ADJUST
ment There can be little doubt that II would also
enhance the purchasing OF greenbacs nearly to
that OF GOLD and thus the way. without financial
disturbance, to resumption. 1t wOuld not create any
additional National debt and would give rise To Of
the difficulties likely result upon the adoption OF
policy either OF imitation contraction Should it be
adopted. stringent provision should be made for the
destruction of the securities returned TO the Treasury
for exchange. There should be no accumulation OF
creenbacks or bonds give rise future pretense OF
"a Treasury reserve. H. NJ r.
Baltimore. MI, FEB 20, 1874
HOW SHALL THE CENTENNIAL BE OBSERVEOf
4 SCHEME FOR ERECTING MEMORIAL BUILDINGS TO