The Emporia news. [volume] (Emporia, Kan.) 1859-1881, 1874-11-27
4 FR ENCgn THEORY SDss RE
SUMPTION.

- = - Hs4S&8A u I6IOH3A OT - -
SUMPTION.
It may, at first blush, seem q little
singular that q Frenchman should
be the author of one of the most
ingenious methods yet suggested
for the resumption of specie pay
ments in the United States. Yet
il is the fact. n. Ernst Frignet is a
French gentleman whose business
relations with our country are init
mate and of long standing. and who
has awaited himself ur the oppOriu-
mites offered bs lr' que M visits here
to make n careful Indy of oar
finances. Ia irtttr E.CeatiV All
dressed by him TO Senator Sherman,
chairman of the Finance Commit
lee of the United States Senate, he
deVelOpes with great particularly q
plan for resumption. NJ. Frignet
has this advantage oyer most Of our
own iinanciers. His practical ac-
quaintance with finance in Europe
gives hun q juster view of the rela-
tive value of the means for resutnp-
ton than exists with ia, and ii also
enables him to say with more conf
dencc what the experience of other
nations has approved or condemn
ed.
The basis OF Mr. Frignet's project
is the funding of the greenbacks in
bonds at . per cent, anil the Issue
| in their places of notes redeemable
in specie, and also eXchaBgeable for
the bonds. This general PROPOSE
ton Is not dissimiiar TO the one
which nnderlies Mr.. Senator Sher-
mans plan OF redeeming the green
backs ia gold or bonds, at the OPP
tion of the Treasury, and making
banking free. But the form ia
which the French iinancier desires
TO carry his main idea into effect, as
well as minor suggestions connected
| with it, are purely original, aud are
also, we may'add, quite characters
tic of the French mind, ingenious,
bold, aud logicSl, as it usually is.
With reference to the issue of the
bonds, N. Frignet starts with the
assertion that the "public credit of
the United States really is to-day
the highest in the world" and this
for two reasons: The United States
is the only great power which fixed
a precise period for the repayment
of its public debt, and it is the only
great power exempt from the neces-
sity of maintaining an extensive
standing army. In offering bonds
for greenbacks, NJ. Frignet would
have the government take the latter
at their market value, measured in
gold, tho currency of the world.
His reasons for this are that the
notes have never had any precise
date fixed for their redemption, and
in exchanging them for interest
bearing obligations, the government
improves the position of its credit
Ors, and is entitled to compensation
for doing so. A second reason is
that the government is trustee only
of the public money, and has not a
right to use it to redeem notes at
more than the holders paid for
them. We give NJ. Frignet the ben
eft of the statement of these rea-
sons, because tho funding of the
notes. at their market value is q
somewhat important feature of his
plan. But the position does not
sOem to us sound one, and the ar
guments for it have, as we believe,
been refuted in our own country.
Deducting the ten per cent. dis
count, however, we have $343, $780,
900 in bonds to be issued. The pur-
chasers of these bind themselves to
deposit them in the Treasury and
take ninety per cent. of their face in
new Ire" sHry notes, redeemable in
specie, and designated by NJ. Frig-
net as specie bank notes." OF
these there would be ninety per
cent. of S343, 100000 or $3O9, 400, 600,
being a reduction of the currency
by some $73,O0O,000. Independent of
the national banks.
The next step NJ. Frignet prOpos-
es is to require the national banks
TO surrender their notes TO the gov
eminent, and to receive for them
"specie bank notes." equal in
amount to their own. The paper
currency of the country would then
consist entirely of "specie bank
notes." S7S,0OO,0O0 less in face value
than the paper now ont. These
| would be furnished by the govern
ment and secured by bonds, the in
terest Oh which would amount to
ST., 242, 900 annually. 1t is further
proposed that during the time these
bonds are deposited with the gov
eminent they shall draw, not per
cent, but 3 per cent, the difference
being the compensation claimed by
the government for the exercise of
the sovereign right of issuing paper
money. For the S73,O00,O0O reduc-
ton in the currency, it is proposed
to issue specie bank notes" to
whomeVer will secure them by the
deposit of bonds.
For the redemption of the notes
on demand, in specie, M. Frignet
proposes the employment of the
specie reserve as far as it will go,
and if more is required, the pro-
curement of it by the sale of bonds.
He then proposes that the new
bonds and the "specie notes" shall
at all times he eXchangeable, the
bonds, when drawn from the Treas
ury, being at full interest, when
left in the Treasury being at B pei
cent. interest. On this feature he
relies to make the new currency
elastic, being confident that when
money is needed all the bonds will
be deposited and the notes put into
circulation; when money is moi
needed, the notes will be again ex'
7 changed for bonds.
If we have succeeded in making
plain the details of NJ. Frigneti
plan we think the correctness of Oul
statement of its fundamental idet
will be seen. 1t is proposition to
exchange our present currency fol
one redeemable in specie issued By
, the government, and exchangeabl'
} at the will of the holders for bonds
! The suggestion that the government
may compensate itself for the issu
by Withholding q part of the inter
, est on the bonds held for security i
incidental. That some plan resting
! on this idea will receive the careful
r attention of the Senate Financ
/ Committee we have no doubt. AM
f we may add that In spite of som
( details that strike the American
n mind as necessarily complex, tn
q plan seems to us worthy of study
New York Times.
: WAYS TO SUCCESS.
:, Over fifty years ago, q yout
working on farm, asked his fathe
1 n sriuo him uonmoU annn1h tn hnv