Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1875-11-02
Thev presuppose that the

operation. 1ney pleSuppOse tuat tuo
Government has managed in some way
to borrow an indefinite amount of money
at s. 65 per cent, and they say that il,
then, the Government would exchange
that money tor bonds with any one who
should bring them bonds. the rate OF
interest could not rise beyond the rate
borne by the bonds. But who would
have the bonds to obtain money with in
this way? Clearly it could only be
those who had loaned the greenbacks to
the Government originally, or those to
whom the original lenders had sold the
bonds. But no one who already held
the bonds in this way would surrender
them unless the money obtained IN
exchange would bring higher rate oi
interest than the bonds bore. SO, again.
we see that the scheme would not work
to bring down the rate OF interest.
because The Indispensable condition pre-
cedent. viz, the surrender OF bonds,
would not take place unless the rate oil
interest was high. The moment it SINK
TO 3 65 per cent the holders OF green
backs would take them to the Treasury
and once more get the bonds. 1t would
still be the money-owners who would be
benefited, and they only.
1t is to be inferred, however, from
some OF Mr.. Kelley's statements that his
scheme has been turned end tos end by
/ himself in stating it,and that he probably
expects that the Government would
/ begin. not by the issue OF bonds ex-
chaugeable for notes, but by the issue oil
notes exchangeable for bonds. This,
| of course, is very different plan to the
/ one we have described. and would have
very different effects. In the hrst place,
| the notes, surprising them 10 be made
| lawful money, ike the existing green
| backs, must 90 got into circulation. This
could be done 10y the payment OF ordina.
/ " Government dues, which, over and
| above the gold interest. would be about
! $500, 000, 900 u year; or by the purchase
OF bonds or gold. at such rates as these
should command. IN exchange Tor The
new notes or 10y creating new expend'
/ iiureS-Say in the building OF railways
and canals. Undoubtedly, the new uole'
could thus be got out in one way OF
another, and the Government could then
offer 10 borrow them back again, paying
/ 3 65 per cent. interest on them, aud CIV
| inc bonds AS evidence OF the debt. But
after all. the. net result OF this process
would only be TO increase the volume oil
the legal.teuder currency. and still
whatever quantity might be put olt, 10
prevent tho rate Of interest; Tor hNinS
minimum, not for liking maximum, t'
the rate.
In the meantime, what would be The
effect on the debt OF the United States
and those 10 whom it is now due' \
first The effect would be To enormously
increase the wealth OF those who hold
the bonded debt, because, that deb
being payable in gold, principal ant
interest, its value would be indefinitely
enhanced by the Unlimited issue OF pspe
money. Ga the holders o. greenoAcN
the effect would DO the reverse, Tor th'
greenbacks would rapidly fall in pur
chasing power until they sank nearly o.
quite out OF sight But ultimately al
Government creditors would be Involved
ia "A common ruin. Tor II the Government
went on paying out IT. own notes with
,ut limit, As money, the world woui'
uapiily como u the conclusion tina
neither the notes themselves nor th'
F. bonds could ever be paid, Puohc creoii
would be destroyed. and With it priya,,
credi, also. aud the scheme which wa
90 make every one prosperous would II
the end make every one bankrupt
Money" OF the kind supplied by III,
Government would indeed bc plenty,
but il would be worthless. Speculation
a, first rampant while legitimate bust
ness was dead. would finally becom,
also impossible. Through period o
financial madness, We should reach t1'
Only possible termination OF our career
after exhaustion rendered the NOR,
bitter. as well as more hopeless, by lh'
.ac. tia. wc have parted wi,h our honor
The one element II prosperity which u,
modern commercial! nation can surrende
and live.