National Republican., 1875-07-10
GENERAL BUTIIR ON rHE CURRENCY.


IN brief, of General B. F. Butler on the
national currency. 1t will be seen that, in
common with all infationists, the General
has fallen into the pleasing fallacy that
credit money is just as good as the real
medium If an act of Congress only DEGREES
it, An acknowledgment of debt is good
for only so much as you are able to realize
upon it. Our greenbacks would be worth
very little if the law did not make them a
legal tender for the payment of public
debts of certain class and for all private
debts. They are the due bills of the Gov
eminent, for which the faith of the people
ispledged, but are redeemable at no specified
time upon their face except for certain
public dues. And still they are thirty
three and one third per cent. better than
our District guaranteed 3-65's, simply be-
cause they are legal. tender. Take from
them this characteristic and they would
fall far below the national bank note, which
is secured by gold-bearing five or six per
cent. bonds, due and payable at some fixed
and definite period. Notes have no in
trinsic value. They are worth what you
can realize upon them, and that depends
more upon the prompitude of their pay
ment at maturity than upon the ability of
the drawer. Intrinsically the District
guaranteed 3-65 Is worth, as an investment.
three sixty-hv per centum per annum
more than 8 greenback; but because it
lacks the legaltender characteristic it COM
mands only seventy-five cents on the dollar.
Now, General Buffers proposition is to
make national 3-65's convertible at the
option of the holder into legal-tenders
and Uice Uersa. The result of this would
undoubtedly be to make greenbacks par
with 365 gold bearing United States
bond; but what would the bond be worth
in the markets of the world? If fives are
worth par, what are $685. WORTH By the
rule of-three the answer is 73, or ten per
cent. below the present rate of greenbacks.
When men are ready to give or promise to
give all the way from six to ten per cent.
per annum for greenbacks, for what the
General terms legitimate business enter
prises, how many greenbacks would be
converted into 3-65's? Obviously only those
which distrusted the security offered. And
that is precisely the case now, as stated by
Gen. Butler.
Why cannot all men comprehend the
simple fact in finance which they are con-
stantly made to feel in everyday life?
Paper money which is not redeemable in
coin is credit money it involves a risk,
and that all risks must be paid for in some
way. Gold and silver coins are always
available, and keeping them involves no
risk, except the loss of use. Risk and
credit mean speculation, and speculation
means ficticious values, otherwise the ap-
probation or depreciation of property with
out legitimate causes, such as improvement
on the one hand and damage on the other.
The true interest of labor requires a
stable medium. 1t requires that property
should appreciate only through such i'm
provement as gives employment to labor.
All other enhancement is fictitious. The
real fight between initiation and the specie
basis is one of debtor and creditor interests.
As rule the laborer is a creditor. And
his interest lies in favor of the specie basis.
On the other hand, the borrower, the spec
ulator who buys on credit with the hope of
selling at rise, wants imitation. 1t is his
nature. He lives a fictitious life. He is g
moral opium eater, and luxuriates in WIS.,
ions of wealth without work. He buys
largely on credit, sells largely on credit,
and when settling day comes produces q
magnificent schedule of accounts, that is,
promises, or perhaps a mountainous pack
age of due bills, and shows that his assets
far exceed his liabilities but what does he
realize-simply that he is "busted CON-
munity"
General Butler should attribute the de-
probation of values to the proper cause.
There has been no contraction of the cur
rency to cause it. There has been simply
an awakening to the fact that we we're
striving to get rich without work, or that
we were expending too much labor upon
ornamental rather than substantial i'm
provements. Capital is made and kept
timid by just such propositions as are con-
tanned in the Ohio platform. 1t will not
invest to day at one hundred cents with a
strong prospect of being repaid next year
at 70 cents on the dollar.