New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-07-17

| other bonds, Is, 10 speak pialniy, enhoi o"'
fession of insolvency or an act OF fraud. IL
one farmer undertakes to pay another, for
| ralue received, one hundred MerinO sheep at
| the earliest date possible, that promise Is not
kept by offering the creditor at the end OF
Fifteen years the choice between no payment
| at all and one hundred he-goats.
iii. Government bonds are totally untitled
TO take the place of gold as the standard OF
value and regulator of pecuniary contracts. Their
value is sure to depreciate the moment the conn
try enters into war, which is the very time when
n break down of the currency Is attended WIN
the most disastrous consequences. 10 SHOW
the enormous fluctuations in the value OF
bonds. even of the class which bear interest
payable in gold, we give some paltlcu-
lars of the variations in the prices or
British consols, the most solid and undoubted
of securities. In June, 1877, their gold price
was 1O7. In 1745 they fell to 7G, the cause
of the decline being tho landing i'll Scotland
of Charles Edward, the Pretender. In 1719
they were again at par, but toward the close of
mr Revolutionary war they sunk to 81. In
1892 they touched 90, while in 1897, on
the failure of negotiations for peace with
the French Republic. they fell to 479s
In the wars with Napoleon they ranged
from 5Olt to 72l2 in the depre-
ciatcd currency issued by the Bank of En-
gland. In 1914 and 1915 they were again mt
mr. but in 1917 were sold at ISL. Since
1850 tlcy have ranged from III 1866 to
above par IN 1882 and 1853. The variations
in the prices of French five per cent stock
have even covered wider range. In 1877
the price was below Z per cent. Under
the hard money pay-as-you-So roiicy
of Napoleon they rose TO SO in IS09,
but fell TO u upon his overthrow i'll ISL
In 1880 they rose to 100, and IN 1913
fell to CT. During the late war with Ger
many French credit was very low, but the
FIVE. have now again risen to above par AS
TO our own securities, the very men who are
now clamoiing for bonds to serve the uses OF
specie have not yet ceased TO threaten the
bopdholdcrs with cOnfscation because they
bought United states skies during the war for
10 or % cents on the dollar in gold, for which
the, are now receiving payment at par.
". The bonds which McsSrs. Carey and
Kelley propose to substitute in the place Of
the gold. which the greenback binds the Gov
crnmcat TO pay, bear interest at the rate of
3 G5Ioo per cent per annum, payable not III
such law a. ilr. Kelley would dictate, and
we venture TO say that neither sort OF this
double-hcaded currency Of dSsiJRdts would
be worth 30 cents on the dollar IN
constitutional money at the end OF three
months. The value Of bond bearing
that rate of interest in real money and pay
able at The pleasure of the Government would
not bc more thln rs or 80 per cent In com,
while thc giccnbaokS, even at the current quo
! taion for gold are worth about So cents
The value of IN unlimited Issue of GSsigndts,
emitted in time of peace, would rapidly APP
proy;matc to -cro
V. Neither Mr.. Kelley nor any of his school
seem capable OF cOmprchcnding that the rate
of interest, except under special circumstances
and fol very short periods depends upon the
! abundance OF scarcity of that part OF capital
winch does not consist OF money. he aggre-
.s..e amount OF money in the world has been
enormously increased during the last thirty
;r,rs, vet the rate OF interest his not fallen.
ne rate of interest cannot be permanently
| ,wcrcd by any increase III the quantity OF
money. Between 1851 and 1871 we more
than doubled the quantity of our currency,
vet the rate of interest was high in 1872
AID 1878 as it was before the war.
VI. Ii is easy to see how the 800 scheme
would initiate the currency. Let us suppose
the plan in operation. Mr. Carey imagincs
that large proportion of the deposits in the
banks would forthwith be withdrawn to be
"inycstcdn in the 36js. If that should be
the case we should have general bankruptcy
to start with, but let us suppose, for simplicity
the banks, Ivy Offering to pay 800 per cent
IL. u to
| Of their customers, 10 retain their dcp0s-
its The banks already have on deposit
at the Treasury for safe keeping over
$50, 000.000 in currency for which they get
no interest ut all, and they would of course
| demand sos in exchange for that amount OF
! grcenbacks. The Government, having now
currency balance of $50 900, 900, would sus
! pend its gold sales and call in 5-2Os for re-
| dempton with its surplus coin revenue. In
| the course of six months or year the
! 500. 900, 900 grcenbacks would have been
| paid out aud the currency balance again
! brought down to -. JOoOO0. What then
would be the currency There would
be 1919 100000 legal tenders and fGO,000,-
! 600 convertible sos, making a total OF
! $l1j. 900, against 1870, 100000 at pres
| rnt, being an initiation OF T6O,OOO,OOO. But
| long before the $50, 100000 left with tho
Treasury. had been disbursod millions more
! would have been brought in and exchanged
| for 3.65s. Meanwhile the goOdly company Of
orr foreign creditors. public and private, would
! have taken the alarm. They would attempt
/ 10 realize on all their American securities
! and have the proceeds RENTED 10 them i'll
| gold. Gold would rise like a rocket, and our
4 81.