The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1876-02-19

Senate.
Mr.. CARTER of Loudoun presented reso-
luton Of inquiry in relation to taxing foreign
bonds, &c. Referred.
Adjourned at 8 P. M.
A Letter Worth Readins-The Cur
rency Question.
Editors of the Dispatch i: In q previous
No. endeavored to show that the case Of a
bank lending out It's notes to three or
four times the amount of its specie and
maintaining them at par by actually paying
specie for them on demand, owing to the
variety Of the demand, is entirely different
from that Of our Government attempting by
paying off with specie one third or one
fourth of its greenbacks to elevate the rest of
them at once and ipSo facto to par, 80 that
they will circulate indiscrimInately with geld
and gold with them, neither claiming supe-
riority, but both rejoicing in q happy equality
which allows both to circulate in the same
community instead of ones driving out the
other, as is now and has for fourteen years
been the case. This is the ground on which
the resumptionists pretend that resumption
instead of contracting will actually enlarge
our currency and restore the state of things
existing before the war, when we had an
abundant paper money readily convertible
into specie. This is a bold preeuson,
and ought neither TO be admitted nor denied
without close and searching examination.
The analogy Of the banks is specious and
plausible one, and seems to have been as
sumed by the resumptionists and admitted
by some of their opponents without the
shadow of proof or semblance of reality.
Sometimes an argument detects its own fal.
lacy by proving too much. A criminal who,
not content With acquitlaI, demands repara-
ton to bis Injured innocence, is often tried
and convicted Of some other offence which
might otherwise have passed unnoticed. An
able writer in your paper Of the 9th Janu.
airy, speaking Of the reserve Of gold required
TO be accumulated in the Treasury by 1870
for paying of greenbacks, says cit is i'm.
probable that the Treasurer would think of
less than one dollar in coin to three dollars
in greenblcks" (eVidently deceived by the
analogy above alluded toy and then goes on
to show conclusiyely that even this small
proportion of gold could not be accu-
mulated in the three years without the
most serious and disastrous consequences.
He does not think of discussing the pre-.
liminary and more important question
whether this proportion, if without ruin it
could be raised, would meet the case-that
is, would redeem the greenbacks when pre-.
sented. and so elevate them to par with gold
whether the same forbearance would be
practiced towards the Government 80 to.
wards the bank, rendering the same proper
ton Of specie sufficient. But the cases are
different. The very establishment of bank
in q community shows that there is felt de-
sire for bank accommodations that the pee-
pie require more money to carry on their
business. A borrower goes to the bank 10
ask favor not as to the Goyernment-to
demand q debt. The one eau impose
conditions, the other cannot. In the one
there is a mutual credit extended and
mutual benefit conferred, which bene.
tic can be realized only by the mainte-
nance of that credit and the continued
reception of the blnk-notes as money and
forbearance to demand specie for them.
The borrower c)uld not get the loan unless
be will take bauk-notes. He surely, and all
who depend ca him for employment or GUS
tom, will not refuse the notes and demand
specie, because If they do he loses his loan
and they lose bis patronage. But it may be
said that the holder of q debt against him
previously contracted, being interested in
preventing the expansion OF the currency by
the bank-issue, might refuse to take them in
payment, and demand specie, in order to
compel the debtor TO sell his property at a
sacrifice on account Of the contracted volume
Of specie. 1t may be said, if the holder OF
greenbacks is interested to produce con-
traction Of the currency to lower the price
of property and enhance the value of bis
debt, and therefore demands specie for
them, the creditor here referred to will for
the same reasons be interested in preventing
the expansion of the currency, and therefore
will refuse to take paper and demand specie.
[ admit that In the end aimed Atm the one
case to enhance the value of the debt,
and in the other to prevent its dimi.
nution-the cases are parallel, and might
we'll suggest the adoption of the same
means in both cases--the refusal Of
the paper money; but the efficacy of this
means would be very different in the two
cases. First, in the case of the greenbacks,
the moDeyed men, the holders of them, have
an obvious and immediate interest in con.
tracing the currency by demanding their
redemption in gold, which is not counter.
acted BY any opposing interest; but ia the
other case, the moneyed mea (the holders of
spece), who generally compose the associa.
tons called banks, finding in the commu-
MY q NSuebhd- iot nouCyS uafC QuuCl tdheu
to supply it by lending out their notes at
interest to the amount OF three or four times
their specie, and thus realizing large pro.
fit, in view of which they are content to
forego the advantage they might derive from
being the holders Of specie when the volume
of it was small in buying property cheap.
The holder Of the greenbacks, on the other
hand, has 20 motive to induce him to re-
frain from demanding full redemption Of
them, and be satisfied with the redemption
of third or fourth, since be receives no
compensation for the loss he sustains by being
paid his debt In currency Of greater volume,
and consequently OF smaller yalue, than If it
had been all paid in specie in which case
we have seen that the currency would
have been reduced to little more than half
its volume. In the supposed state Of; things
the holders OF the greenbacks do furnish the
community with an expanded currency, for
it is their unredeemed greeDbacks still kept
in circulation that compose nearly three
fourths OF it but they derive no profit from
this increase of the currency, but in fact are
losers by 1t, as we have seen. The Govern.
ment by paying of its notes with one dol.
lar in four saves, the interest it would have
paid on the three dollars in gold it would
have had to borrow Id order to pay OFT The
pther three fogrths Of the greenbacks. This
Is the,very measure of what the holders OF
the greenbacks lost by submitting to be paid
one dollar 10 four. What the Government
gains they certainly lose: but this Is not all
they LOSE. II, instead of one dollar IN