The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1875-08-14
THE CONVERTIBLE BOND SYSTEM

Inc urSt question: WHICH presents itScii
when discussing this problem is what is
redemption The bullionists replys, it Is
exchanging paper dollar for gold dol
lar. But no one can eat a gold dollar,
neither can they use it for clothing. I'm
der Their bullion system second exchanqr
must he made before a practical tho .pt-
ION takes place, viz the gold must he
exchanged for food or clothing. Why is
tins double exchange necessary L,
not necessary. The holder Of a paper
dollar asks that it be exchanged for food,
Or clothing. ur something useful, and
when it is thus exchanged 1t is redeemed
III Just the commodities which he wants,
without the Intervention of note shavers,
brokers. skmhint robbers, or nybody else.
la order e. make tins redemption certain,
Congress has made greenbacks a legal ten
der, that Is, 1t has compelled every per
suu Who srells food, clothing, or other ar
rlcles e. accept greenbacks for such ar
ricles This legal tender law compels
everybody 70 redeem greenbacks when
other commodities.
Bagehut, the veteran London banker,
aud editor Of the London Economist, af
trims that banker need know nothing
about the theory of money all he need
concern himself about is to Keep a suthcl-
emit amount Of legal tenders in his till to
pay all probable demands upon him" 1t
is the legal tender quality which makes
any article money. To coin money is an
attribute Of sovereignty. In the United
States, the Constitution expressly declares
that Congress shall have power to coin
print money, and regulate the value
thereof so that there can be no controver
sy whatever upon this point Congress,
under this provision has made greenbacks
a legal tender and greenbacks, therefore,
have every attribute Of money. They are,
together with national bank notes, almost
thy universal means If payment. That is,
II Is only 10y their agency that debts can
be legally redeemed, whether the creditor
will accept freely or against his will He
may accept greenbacks instead Of hank
notes. bu, he cannot refuse greenbacks
without surrendering his claim In fact,
all except a few pig headed IDIOTS admit
that greenbacks are money, and the So
preme Court OF the United States has de-
cided them t. be money in the fullest sense
ut the term.
But, say the bullionists, this greenback
money fdctuates in value every day, and
often dozen times day. - We want a
money that has a fixed value What is
value Value is purchasing power, and
if greenbacks fuctuated as the bullion
writer's assert, then the purchasing power
uf greenbacks would be different every
day. OF dozen times a day. This differ
ence " purchasing power would be found
IN all prices. But If most prices remain
the same, then the purchasing power Of
.reenhaoks remains the same. Now, it
must W. manifest 70 every thinking person,
that u merchants marked their prices up
ana down whenever greenbacks changed
value relatively with gold, they would
have no time to do anything else. AS a
matter OF fact, prices do not change ;
furthermore, the English markets, the
Canadian markets, the Australian markets,
and even the California markets, are much
more unsteady than our Chicago, New
York, Philadelphia, Boston, or other mar
kets in the States. These facts show that
the supposed advantages of gold as a 81
called measure of value, do not exist
at all
But let us take another view Of the sub
iect. The value OF a house is determined
by its rental or income This also is the
means of determining the value IF all
kinds Of property. In quoting the rates
Of interest in England, all financial editors
head their tables The value Of money -"
Hence it follows that the value Of money
is its rate Of interest, or income Now,
we propose to give uniformity and stabil-
ity to our monetary system by fixing a
rate of interest and by leaving the volume
Of currency in circulation to be determined
by Congress. The plan is simply this I:
Let the government issue bonds bearing
3 90 per cent. interest This 6xes the IN
come Of the bonds, and gives an absolute
stability which will correspond exactly
with the stability Of the government.
Then let the Secretary Of the Treasury
buy go bonds in the open market for
greenbacks There can be no faint of re-
pudiation about this, because each bond
holder could sell or keep his bonds at his
own option. Give the holders of green
backs the option to fund their greenbacds
into $50 bonds whenever they preferred
the bonds to the greenbacks In this
manner the entire debt could be refunded
Id the course Of time, at a saving Of about
800. 900 0uD of interest each year This
would, IN addition, give a permanent sa-
wing upon the bonds and bank notes of
national banks which would be replaced
by greenbacks This would amount to at
least $40, 900, 900 year more. The total
saving Of this system would, therefore, be
not less than so, OOO, 600 and this with
out increasing the public debt one
copper.
Under this system, when interest fell to
3 per cent, greenbacks would be funded
into B. % bonds When interest rose to
per cent. the 3. 90 bonds would be CONVEX
ted in legitimate business. Imitation would
be impossible, because all Of the surplus
greenbacks would be funded into $50
bonds. Contraction would be equally i'm