, 1876-10-08
PAYMENT OF BONDS IN SILVER.

The adjournment Of Congress, and the
necessary postponement Of any Legislation
on the subject, and the absorbing topics Of
the Presidential canvass, have to some ex-
tent suspended the discussion Of the silver
question That question, however, is of too
vast importance to be overlooked, and, before
Congress meets, public attention will be
strongly directed to it. In the New York
Nation Of Sept. II We find an article entitled
Why We cannot pay Government debts in
silver" The drift Of the argument is, that,
even if the United States were at liberty be-
fore 1873 to pay the bonds in either silver or
gold, this privilege was lost by the act OF
1873 demonetizing silver, and the obligation
thereafter became payable e1cluGvely in
gold Here is the assertion:
Now, let as apply this to the act OF 1873 de-
uonetiz1ng silver We will concede that up to
TINT time We had double standard, and that the
Government had the right to pay its creditors
either in gold silver at it's option. In that yeu.,
however, and by that act, Congress, with all the
necessary forma1ities, made its option and an
nounced it 1t gave notice to the national credit
ora that 1t would pay In gold, and not in silver,
and we are bound to presume that it did SO for
good and sufficient reason.
The act demonetizing silver did hot change
any existing obligation of the United States.
The national bonds are all payable sin coin"
of the United States. When the act demon
citing silver was passed, the standard legal
tender coin of the United States was, in ad-
dition to the gold pieces, the silver dollar of
412t grains, and containing s714 grains pure
silver. The promise to pay was, therefore,
to pay in either the gold coinage, or in this
silver dollar, which was then worth more
than the gold dollar. The United States
could not change this contract. It could not
deprive the creditor OF any part of the prom
ise to pay. The Government could no
more avoid the contract by demonetiIng sil
yer, which was the more valuable coin, than it
could BY demonetizing gold. Had the United
States demonetized gold in 1873, then, ac-
cording to the Nation, the United States
creditors in silver dollars. If the logic Of the
Nation be right in the one case, it must fol-
low in the other. To further illustrate the
absurdity Of the argument that by domone-
tizing silver the United States released itself
from the obligation Of paying silver, why
could not the Government demonetize both
gold and silver, and thus escape payment in
either kind of coin?
The obligation is to pay in coin Of the
United States. The standard coin was, at
the date Of the contract, gold and silver, and
payment in either or both was lawful. No
ocr11 a;kbov
cation Of silver was not notice in any sense
to the creditors that they should be paid in
gold and not in silver. The United States
had no power to change the contract one
way or the other.
This question is not likely to be tested in
any way on the payment Of the $40 bonds.
The fate of these bonds is probably fixed;
they are to be taken up by the substitution
of bonds issued under the Funding law Five
hundred millions of these new bonds, bear
ing per cent interest, have already been
issued; three hundred millions more, bear
ing \ per cent interest, are now in the mar
ket, to be followed by the issue of 4-per-
cent bonds in sufficient number to take M
all the outstanding per cents. Our bonded
debt, with the exception of the comparative
1y small amount in l0-40bonds, will be in
the form Of bonds issued under the act of
July, 1870. This act recites, and the bonds
themselves contain on their face the re-
cital, that said bonds shall be payable
in United States coin Of the standard
weight and fneness as provided by
law on the 1+th Of July, 1870. It is
iumateril whether the United States de-
silver or gold, or both; the bonds
are payable, and must be paid, in the coin Of
the United States which were legal stand
ard on the 14th Of July, 1870. The creditor
can lawfully demand that he be paid in either
the gold dollars containing the standard
quantity OF pure gold, or in silver dollars
containing the standard quantity Of pure
silver, as the laws Of the United States re-
quired on the 14th Of July, 1870. The Uni
ted States in like manner can pay these
bonds in either gold or silver dollars, pro-
vided such dollars contain the amount of
pure metal required by law at the date Of the
contract No action Of Congress in 1873 can
change the obligations Of this contract, which
l., - l.. 7.