The Emporia news. [volume] (Emporia, Kan.) 1859-1881, 1876-06-02
NATIONAL CURRENCY. AND
NATIONAL BONDS

Evidence of q New York zsank.
er Before she House ways
: and Means Committee.
From the Philadelphia Pre-. 8 Hay 49,
The main purpose of the exami-
nation of Mr.. Hatch, of New York,
by the committee of Ways and
Means on the second and sixth OF
March last, set forth in their Just
printed report, already deliberately
referred to in the Press of May 9th,
was to ascertain whether, IN his
opinion, it was advisable for the
government TO Issue = new loan
bearing Al per cent, in which to
fund the outstanding six per cent.
loan. That it was not the interest
of the government to offer 9 rate
so high was proven most conclu-
siVely by Mr.. Hatch. His demon
stration, that the loans of the gov
ernment were now commanding in
the markets of the world 6 rate
which would net yield more than
four per cont. per annum in gold,
was 80 able and so exhaustive that
we do not believe any one would
advocate : higher rate of interest.
To do so would be simply saving to
investors, your estimate of our
credit is 100 high; We prefer to pay
you Az per cent. instead Of per
cent interest. While the question
before the committee was that of
funding, a number of points of
great interest, connected both di.
rectly and indirectly with the main
question, came under discussion.
In referring TO the views of Mr..
Hatch on the kindred topics, let US
remember that although he is in
tensely practical, and in extent of
business and experience second to
none, he is a banker and New
Yorker, and must therefore be in
ffuenced by that school as fuilyas
any able aud fair minded MAG can
be. We refer to his standpoint be-
cause we notice q very marked
agreement, on several important
points, between him and the Carey
and Kelly school. He states dis.
tinctly that the price Of gold, like
any other commodity, is regulated
by the law of supply and demand,
and that the difference between
gold and greenbacks is not at all
the measure of government credit.
He states further, that, in his opin-
ion, the only Legislation that can be
at all effectual toward the resump-
ton of specie payments would be
such indirect legislation as would
tend to increase our exports and
diminish our imports, and turn the
balance of trade in our favor. He
adds his belief that if the green
back currency was contracted to
$200,O00,O00 we could not, SO long
as we have to pay in gold our bal
ance to all the world, force resump-
ton any more than we can force
water up hill. Then, in long and
thorough discussion with Judge
Kelly, of the :65 interconyertible-
bond system, he acknowledges the
manifest advantages claimed for il,
and approves the system. In fact,
his whole argument shows most
clearly that q very large amount of
these bonds would be placed and
permanently held here. We think
it equally clear from his argument
that an immense amount of capital
would be continually floating in
and out of them, and that the elias.
ITCHY claimed for them would be of
value to the trade in
terssts of the country. He con-
cedes that there would be less temp
tation to speculation if money
could be placed with the govern
ment GA call at 1855 per cent. The
only real doubts in his mind, or OBJ
jections to the system, Wers first
ho nnoofinn o. IN az fakv - rnan
sgemeDt under government con-
troll. On this point, however; in
answer to Judge Kelley's questions,
he acknowledged that through all
the periods of the emissions OF pa
per money and bonds of transact
tons have been characterized not
only by singular honesty, but by 9
absence Of even mis-
takes. The government administra.
ton in these particulars will not
suffer by contrast with the banking
Secondly, he OBJ |
lects to the government entering |
upon the business of banking. Up
on this point we think Mr..
Hatch, in common with the conn
try at large, entirely misappPehends
he aim of the Kelley system.
That system claims that banks and |
bankers shall confine themselves
10 banking, viz: the receipt, en-
0loyment, and repayment of their
Dwn capital and that Entrusted to
hem; and that the government
hall simply exercise its preroga-
i've and fulfill it's duty-that lie,
|tamp and Issue The currency the
requires. By the ipteFcon.
7ertable system the crediieF of
ne government merely elects the
Iind of evidence of indebtedness
le receives from the government.
n this case, IS we understand it,
he government lie not banking, and
las no reserves to keep. It merely
,ives the creditor legal tenders or
100 bonds At his option. changing
hem when required. The third
objection Mr.. Hatch makes is, that
lnder this system the government
would pay interest on money it did
lot need. In order to show tina.
his would not be true we will
tate an extreme case. If the debt
3 now $2,0O0,OOO, 600, and if of
hat debt $400, 000, 900 is now legal.
enders bearing no interest, aud the
emaining 81, 6O0, 100000 average 5
Ter cent. the annual interest would /
70 $SO,O00,000. Now. suppose the
Whole Indebtedness was funded in
.65 bonds, the interest on the
2, 000, O0Q, GOO would be $4,000, GOO,
nd this saving of 81, 900, 600 annu-
lily would be increased by the
of 3.65 bonds converted
INTO legal-tenders. If the trade Of
he country required the amount
# legal tenders and national bank
lotes now issued, say $700, OO0, 600
a all, the annual saving In Interest
hafged to the nation would be
%, $4,000. We are, therefore,
fer = careful study OF the most re.
paper, more firmly con.
'enced Of the soundness of the Ca.
system. We believe
hatthe bonded debt Of the country
ould be converted more rapidly
ntO the interconvertible 1853 than
nto ~ per cent. bends, and from
be lesser standpoint of amount Of
nnual interest charge this cenver-
ion would have the advantage.
The phsIa 1af1hsa n.Sy.x pes. 3