, 1875-09-30
FINANCIAL rNC0N0RuIT1E8.

IHefG hhs never DCen so fiagrAnt a m18Con-
str,ction Of law nor SO mucl, confusion Of
fact in regard to any ono subject rs in reia-
ton to the issue Of United States bonds and
Treasury notes. a new jumbo Of old
heresics comes to uR in the shape of letter
from D. G. GRAHAM, Of Cameron, H., which
We print this morning. In tho brief space Of
less than half column ho goes over the
whole financial problem, mud dog,natically
disposes Of it to hia own satisfaction, il not
to the satisfaction Of anybody else, and comes
to tho remarkable conclusions TINT the Nh
tionnl Bank circulation il unconstitutional u
and TINT the bonds should DO ''raid" in green
backs, which themselves aro unpaid notes.
We will follow his labyrinth of misstato-
monts for tho benefit of those people to
whom they havo been reiterated, in ono form
or another, for the past eight or ten years.
/. In rogard to tho constitutionality Of
tho Legal Tender act, it 1nust be remembered
that it was first declared unconstitutional by
the Supreme Court, and that its constitutions
ality was finally affirmed by only one major-
ity nfter reconstruction Of the Court. But it
is evon now worthy Of notice that tho Judges
who sustained tho net lid so expressly on tho
ground that tho extreme necessities Of tho
Government, growing ont of tho tremendous
Rebellion, alnno authorized tho net. The
faith Of the Government WAS pledged by act
Of Congress. when tho grcenbacks were au-
thorized, that the issue Of 1cgal-tonders ahal1
never exceed $4O0, 900, 900. ANY issue OF
legnl-tcndora over and above this amount
would then be outside Of the pledge Of
Congress, and Of the Supreme Courts Of
frmation of their constitutionality. Does
Mr., GRAHAM or anybody olse suppose that the
Supreme Court would affirm tho constitution
ality of a lcgal-tendcr issue made in II tno OF
profound peace and without any dire neces-
sity for it? Justice BRADLEY, who formed
the minority sustaining tho net, expressly
spoke Of 1t as 81 q power not to bo rcsortcd 10
except on extraordinary and pressing occa-
SONS, such as .rar Or olher pubic erigencics Of
great gracity AMI t0.fortancs,- it should
DO no longer continued than NIL tho oirc,,m-
stances Of tho case demand" In Yiow OF this
utterance, can any ono imngino for moment
TINT new issue Of legal-tendcr notes would
bo held to bo constitutional? And without
such now issue, how are tho bonds to be
"paid in new notes, or tho National Dank
uotcs retired and their place supplied with
lcgal-tendors?
2. We fail to SEQ how the retirement Of the
National Bank circulation could lead to re-
domption of tho bonds owned by tile banks
and deposited in tho United statoa Treasury
to guarantee tho redemption Of their notes.
National Banks arc retiring their notes oc-
casionally under the present law. They tako
their bonds into tho opon market and sell
them for groenbacka, which they plece in
tho Tfcasury for the redemption of their
notea Tie Government does not issue new
graonbacks with which to buy bonds and
does not possess itsan Of tho bonds Of the
banks There would bo Just rs many bonds
outstanding II MI the National Bnnk notca
wore retired on thor0 orc now, The only
lawful way in which the Government cnn re-
tiro bonds ia to buy them ut the cur
rent rates ont Of tho surplus vereuue
derived from taxation; but The Gov
ernment hasn't surplus revonue enough
ut tho present timo to maintain the
sinking fund. II it conld buy up ali the
bonds now held by tho National Banks, and
issue greenbaclzs therefor, Mr. GRAHAM says
thoro would be saving Of 9.l, 900, 600
year. Thore would be saving Of nothing
Of tho kind. Tho $35e, ,ooo, 600 (which Ia tic
amount Of National Bank circulation), ii con-
verted into greenbacks, would only purchase
$500, 100000 Of bonds at present prices. Tho
interest on these at s per cent would bo
$l4, zoo, 900, instead Of S2i, 900 900. hut
tho Government would loBo $4,000, coo roye-
nue. from hank taxes. so TINT tho saving would
bo only so, 600, COO, for which the Govern
ment would pay $70, coo 900 premium In tho
purchase Of the bonds. This bad investment
would be made for the purpose Of abolishing
O system that now loanu about 81, ,0O0, ,O0O, 600
to the manufacturing, mercantile, and ag1i-
cultural classes Of this country. To abolish
them would produce tremendous deEangc-
1nent Of all business.
8. Mr. GnAuAM bases his conclusion that
bonds may be redeemed in irrodeemable
greenback uotes upon the allegation that thu
latter were authorized Feb. q, 1869, and tho
SEQ bonds G}<e77eards, IIo is mistaken as to
his facts, Tho greonbacls were made legal.
tender, and Tho issue Of 5.o0 bonds author
lied, by the &.ae act, passed Feb. Is, 1909.
II it bo admitted for tie sake Of argument
that .hese bonds might be lawfully paid In
the legal-tentler Of that issue, It must also bo
remembered that the salne act authorized the
conversion Of greonbacks into SEQ bonds at
the option Of the holder. This clause was
subsequently repealed, which was au act OF
bad faith OH the part OF tho Government. II,
thon. the Government has tho ahadow Of a
right to pay ths bonds in legal-tsnder notes
which 1t refuses to redeem, it IL bound by tho
terms OF tho original contract to give every
holder Of g1eenbacks the right to fund them
into $50 go1a.intesess bonds. Ithas no moral
Or legal right 10 force any public creditor
to accept worse greonbaek than ons which
may bs converted into bonds. But there ia
no such legal-tender now. II there were
tho greanbacks would be worth gold, and no.
body would object to receiving them.
1. lhe Rct Of lBU9 which uledped tha INV.