National Republican., 1875-07-20
WHAT IsTKFLATION ~

This is the question put by the Hon. W.
D. Kelley. He then proceeds to answer it
by bundle of quotations from the writings
of Henry C. Carey and his disciples to the
effect that it is simply doing large bust
ness upon credit. And in one sense this
answer is the correct one. Imitation is rep
resenting what you haYe not, or making
what you have appear much larger
than it really is. When Mr.. Kelley, for
instance, tells us that legal tenders are
money because they say so upon their face,
and Just as good as the gold dollars which
they affect to represent because the law
makes them lega; tender for dollars owed,
and we find they will purchase only
eighty-five one hundredtbs of the quantity
that dollar in gold will buy, we say that
our legal tender money is inflated. Itmeans
that our real currency is diluted by the in
fiux of paper.
Our legal tender currency is cheapened
by its false pretenses. 1t affects to repre-
sent gold, but not being redeemable in
gold, though being a legal tender for all
private debts, which has strong tendency
to keep it up, it still falls fifteen per cent
behind. 1t is also allowed IN turn to
cheaper and reduce to its own level our
national bank issues, because they are
made redeemable in it. This redemption
gives the national bank currency, in effect,
the legal tender feature which the act au-
thorizing it failed to supply, and which it
did not need owing to its abundant intrinsic
value: i. e., its security in gold-bearing
bonds to the extent of one dollar and five
cents in coin for each ninety cents of cur
rency issued. So that it will be seen that
. our national bank currency is practically
gold-notes, except as it is cheapened by the
redemption in legal tenders. If the latter
were redeemable in gold the former would
appreciate to the gold level without diff
Guilty or disturbance.
But what does Mr.. Kelley propose
which causes ''specie-basis" men to term
him an infiationist? He would not only
abolish our national currency and substi
tute for it legal tenders, thereby throwing
upon the market the $500, 600, 900 of bonds
by which it is secured, but if we under
stand him correctly, he would increase the
volume of the legal tenders indefinitely as
business interests might demand, and make
the whole convertible into 3-G5 gold-bear-
ing bonds at the option of the holders. He
would thus add to the possible bonded in
debtedness of the nation liable to be in the
market something like one thousand two
hundred millions. VIII he pretend that
this would not be imitation? Will he pre-
tend that any nation or individual already
staggering under heavy load of debt can
increase it fifty per cent. without depreei-
ating largely the whole volume? He can
not do this because he has defined imitation
to mean overstrained credit, or, in other
words, make believe capital.
But how much of this currency would
seek conversion except in times of panic
or stringency2 Just about as much as is now
seeking investment in District guaranteed
3.65'satpar. And why? Are they not 8. 65 per
annum better than legal tender for an
investment Yes, but they lack the ele-
ments of currency and of legal tender for
debts. They draw only 3.65 interest,
while legal tenders are in demand at seven
to twenty-four per cent. per annum As
we showed the other day the optional con-
version feature would have the effect to
equalize the value of legal tenders and
3.65's. If it were now In effect, then, SIS
being par in coin, 3.65's would be 70, and,
consequently, legal tenders, instead of being
IS as now, would drop to the level of the
basis of their redeemer at 70. Does not
this mark imitation according to Mr.. Kel-
ley's own definition?
The same number of the Philadelphia
Times, which contains Mr.. Kelley's letter
on imitation, has the following somewhat
significant little editorial The Judge
should certainly feel flattered
.sIf there is any greater bore in any commu-
nity, especially to editors, than the man who
| knows all about national finance, and desires
| to make everybody else as wise as himself, we
| have not yet had the misfortune to meet him.
| When we say national financier, we speak in
| the singular number, according to grammar,
but the Individual we mean is a very numerous
man. Every village has, at least, one of him,
and every large city q score or so. Philadel-
| phis has several. We always cross the street
abruptly and obliquely when we see this man
approaching, not desiring to be talked to death
i before the Centennial; but we do not always
escape him. He's hard fellow to get away
from, and If he can't nail you on the street he
Will call upoA you at your Office, and usually
| when you are most busy and least desirous of
seeing anybody, and he soiU tell you all about
| it-what sort Of currency we need and what
sort of q tariff. he Is usually poor and often
\ leedy himself. having sadly neglected his own
/ finances in studying those of the public; but it
seems to us that poverty increases the interest
| of this man in the welfare Of tine world, and
| renders him more eloquent and fluent than he
1 would be If he were very rich. However this
| may be, he is q bore of the first magnitude,