National Republican., 1875-09-09
CONrR0VERTIRLR BONDS

MIR. Henry c. Carey, the venerable pro-
tectionist and inflationist of the keystone
State, has honored us with COPY of his
letter to the Detroit Shinplsster convention.
Like most Of his "open letters" it is
printed, and covers only sixteen pamphlet
pages. 1t is devoted chiefly to financial
history Of the world during the last two
centuries. By striking general average
of currencies and experiences during that
period, Mr.. Carey demonstrates that we
should be benefited by having an American
currency so worthless as to be non-exporta-
bic, or, in other words, that no one would
desire it abroad. Mr.. Carey is a protec-
tionist so thorough that he would even
protect our paper from going abroad. And
to accomplish this he is willing to destroy
all the whole elegant and substantial fabric
of American credit, for, Of course, if our
convertible currency is worth nothing
abroad it will be for the reason that our
bad repute.
But we are at a loss.to see why Mr. Carey
or any other practical man Qike Mr.. Peter
Cooper, for instance) should go all the
world over for evidence to prove that prom
ises to pay are just as good as the pay itself.
They know by sad experience that the
proposition is dream that never was real
lied. They are fully aware that credits
are expensive; that fictitious operations
based upon them are the bane of Wall
street; that they are simply gambling of
the worst and most dangerous character.
No men, probably, in this country to-day
know better than Messrs. Carey and Cooper
that currency is only needed to facilitate
the exchange of the products Of labor.
Greenbacks are used for this purpose be.
cause that they are by law a legal tender
for all private debts, and because the ma
tional bank notes are made redeemable in
them. These two features are all that give
the greenbacks any real intrinsic value.
They mature at no fixed date. They draw
no interest. They are receivable for GER
tain dues. Payment of them in the coin Of
the country cannot be forced by legal pro-
cess at home or abroad. Intrinsically
8 65 bond is just 3.65 per cent per annum
better than q greenbsck, because although
it is not legal tender it is negotiable, ma
lures at a fixed date, and.. d..draws 3.65 per
cent. interest. And yet so long as green
backs are legal tender, and as currency
can be loaned upon real estate or other
valid security at seven to ten per cent in
terest per annum, they will not be likely to
seek conversion into low-rate bonds. Just
80 long as they can be made to earn more
than 365 upon interest they will avoid
conversion. When they earn 7.30, their
redeemer earning only half that sum, would
bear q quotation in comparison of 80 per
cent. five correctly understand this con-
vertible arrangement, then, greenbacks
must become 80 plenty as to earn less than
half their present going rate of interest be-
fore they would get down to par with the
thing by which they are to be redeemed.
This would enable the debtor class to pay
off the creditor class at fifty cents on the
dollar As the laborer is Of the creditor
class, he would get but half the wages that
he gets at present. The mortgages or de-
ferred payments on real estate purchased
now could be paid of then at fifty cents on
the dollar.
As currency is only needed to effect ex-
changes of labor, its necessary volume
could be nearly approximated with ease il
labor payments were made with regularity
at specific intervals. Our labor may now
be estimated at ten millions of days work.
At the liberal average of dollar and half
a day the weekly wages of labor in the
country would be ninety millions in cur
rency, or il paid monthly the payments
would aggregate, say four hundred mil
lions-the more frequent the payments the
less the volume needed for this purpose.
With our present system Of national banks
the accumulations necessary to the periodi-
cal wages OF labor form deposits, which
serve as the basis of loan, so that the money
is not Withdrawn from circulation while
sccumulating, but is loaned out by the
banks for other purposes. five allow one
half of the medium for movement and
marketing of the raw materials and the
article, and the other half
for the wages of labor, we will find the al
lowance more liberal than our last census
returns show it to have been. in 1870.
This hypothesis indicates that we have
abundance of the circulating me-
dunn upon the basis Of monthly
payments Of labor. Whatever may be
aided would tend to redundancy of the