The daily Argus. (Rock Island, Ill.) 1873-1877, 1875-10-19
To the Editor of the N. Y. Tribune.

Ky with Cheap Money.
To the Editor Of the N. Y. Tribune.
SIR; Mr.. Phillips's letter to the Legal
Tender Club may be fine rhetoric, but it |
would be difficult to find in the same com
pass so many transparent fallacies and er-
roneous statements. 1t is true that |
throughout Christendom paper is made |
to large extent, substitute for coin, but |
it never does its work we'll except when it |
is the equivalent of coin. 1t is only when
paper money becomes deprecated and
drives specie out of circulation that it be-
comes mischievous. AS long as it has the
the purchasing power of coin it is health
full substitute for coin. When it has not
this power it fails to perform its proper Of
fee. Nor does it, when it is the equiva
lent of coin, take absolutely its place. 1t
merely shares the field with coin. and by
increasing the volume Of currency gives
stimulus to enterprise, encouragement to
industry, and assistance by facilitating
credit to men of moderate means in COM
peting with capitalists. In Great Britain,
in Germany. in France, in Holland, and
other prosperous European States there
is more coin in circulation and in the
banks than bank notes, 1t is not SO
in Italy, because there a currency
(which by the way, is not half so depreci-
ated as our legal tender notes, drives spe-
Gle away, as IL does in the United States.
But even Italy, Notwithstanding the ex-
pensiveness Of her large standing army, is
moving in the right direction, and the in
dications are that within brief period
she also will have q bank note currency
equal to coin.
Mr.. Phillips says that political economy
settles few points" that it is ''experi-
ence which decides questions, and that
business experience has decided that cur
rency in civilized and commercial nations
must rest upon credit. and consist of pa
per-" With all proper Difference to such
high authority, venture to assert that
the experience of civilized and commercial
nations has decided no such thing; that
on the contrary it has decided that curren-
cy which Is not the equivalent of coin. or,
in other words, which has not the purch-
asing power of coin, should be tolerated
For proof of the correctness of this asser-
ton, point to the present condition of all
the leading commercial states of Europe.
SPECIE IN BANKS.
Mr.. Phillips also contends that specie
cannot be proper basis for currency, be-
cause there is not enough of it held by the
banks to redeem their circulating notes,
and he illustrates his point by comparing
John Bull to the six bottle topper, who re
Trained from drinking the wine he so dear
ly loved, in order that he might enjoy the
delightful fragrance of the strawberry
at the bottom of his glass. Mr.
Phillips has doubtless been close observer
of the habits of topers, and of their power
of controlling their appetites, but he GER
Ar.,Vy 80 n. -
from that in which most men have been IL
the habit of regarding them. A topper
who could sit "a whole evening" with the
tempting liquid uatasted before him, il
order that he might enjoy the deliciou,
odor, not of the wine, but of the small BIZ
of strawberry" which it covered, would b.
worth going to see. What a subject for
'Hogarth" would such topper have been
THE vast system of British paper
which Mr.. Phillips speaks of is not one
half of the amount of the paper money il
circulation in the United States. There is
as | have said, coin enough and more tha
enough in Great Britain to redeem ever
dollar of paper money there is in circula
ton within her boundaries. 1t is not, it
true, all held by the banks; but enough
held by them to enable them to NEE
promptly all calls that are likely to b
made upon them, and bank notes hav
everywhere in Great Britain the purchas
ing power of coin. To require banks t
keep constantly in their vaults speci
enough to redeem their notes would defei
the main object for which banks of issu
have been created, A large portion {
convertible bank notes, in all commerce.
countries, is so much needed for actu;
and daily use that there is never danger
its being presented for redemption. III
banks of the United States have undoub
eddy held too little specie in proportion
their circulation, but in al! the panic
that have occurred land panics wi
occur in all enterprsing and con
mercial nations) it is their depositors an
not the noteholders that have compelle
them to shut their doors, As [ hay
before said, banks of issue exist in all con
mercial countries. They have existed i
the United States from the foundation {
the government, and they will exist
some form to the end oft, Badly as the
have been heretofore managed the cour
try has advanced in wealth and popuIatio
In a manner of which we may be Just
proud. Our national banking system r,
quires what Is required by no other bank
ing system in the world-and in that COL
sists its superiority every dollar :
bank notes in circulation shall be --ocuro
by more than its equival"-ot in voln
Can there be better :, rcnlot;nc meS;u,
than this2 ""s n'ulu
40 =. LESSONS OF EXPERIENCE.
Mr., Phillips states that I'm building
house we 40 not put platform betwee
the house and the foundations" neitht
do we make the foundation the hous
Bank notes which are furnished by ii
government to the banks in exchange Fl
United States bonds which are worth
premium in gold would seem to rest upC
the solid foundation that Mr.. PHILLIP
speaks Of. The statement that the banl
stand between the government and I'll
people at a cost of $20,000,000 year
the latter is an exaggeration. The intere
which the banks receive ON the bon,
which they are compelled to deposit wi
the treasurer is overstated, and no dedu
ton is made for the taxes to which Il
banks are subjected; but if the BAN
were the gamers to the extent name
would that be sufficient reason either {
returning to the old state bank syste
(which banks of the wildcat nature wou
not object TOY, or for keeping up dire
issues by the government of depreciat
currency, in comparison with the evils I
sulting from which, according to hi,