Daily press and Dakotaian. [volume] (Yankton, Dakota Territory [S.D.]) 1875-1880, 1876-02-10
The Financial Question:

uS A'luulClHl VucStlOuE
EXT. S. Senator Edgar ettUwun, Of
Pennsylvania, is out as the advocate
Of new scheme for the resumption
Of specie payments, which is attract
ing considerable attention. The main
points of MIR. Cowan's plan we gather
from late number Of the New York
Herald.
---"Mr. Cowan's Fundamental postu-
late is the undeniablc truth that the
worst of all evils in a circulating
medium is the tluctuating unsteadi->
ness Of value. A creditor who lends
money for seven per cent. would re-
ceive nothing ut. all for its use il the
currency should dcpreciate seven per
cent. between the date Of the note
and its maturity. Onthc other hand,
the debtor who agreed to pay seven
per cent. would-realty have to pay
fourteen per cent. if the value of the
currency should go up seven per cent.
An unstable currency da,nps enter
prise and discourages business by
making it unsafe for men to enter in
to contracts to be fulfilled at a future
time. 1t is s-not because the currency
is deprecated, but because its degree
Of depreciation pcrpetually nuctua,es,
making all calculations uncertain. that
business and enterprise are so ruinous-
ly crippled. Supposing a greenbacls
dollar TO be worth eighty.ivc cents,
and could be steadily maintained at
that value without risk of fluctuation,
business would proceed with just the
Same certainty and regularity as il
the currency were maintained steadily
at par. Thus Tar there can be no
doubt that Mr.. Cowan stands on ten
abiic ground;
'Yife ieXtsquestion is whether it be
possible to tix the value Of the green.
back at say cighty.five cents and keep
it there without variation. Mr.. Cow.
an thinks it possible, and points out a
method. The plan is simple enough,
for it consists merely in recognizing
-hv .law what exists as a fact. He
would have the government redeem
the greenbacks in gold at their actual
value. This would, To be sure, re-
quire stock Of gold, but not-a large
stock; for if they were redeemable on
y at their real value they would not be
presented in great quantities, paper
money being so much more convc-
nicnt than the metallic. Ii at the
time the law was made the green.
backs were, worth IS cents they could
not afterwards fall more than a frac-
tion Of cent below that value; be-
cause as soon as they did, enough
would be at once offered for redemp-
s,ion to restore them to that figure
Nor could they rise more than frac.
tion Of a cent above that value; for
as soon as they did, the banks would
issue more notes and expand the cur
rency up to that level. 1t would be
Just as easy to maintain them at S.
cents as at a.dollar, but the ad, vantage
Of re'leeming them at their actual
value would be that it might be done
without disturbing business, or affect:
ing the relations Of debtor and credi.
tor. Mr.. Cowan would also have a
date fixed beyond which future con-
tracts should be discharged only in
gold dollars, unless the contract speci.
fled that they were to be paid in cur,
rency, the grecnbackst still remaining
legal tender at their real value OF
SIS cents.
The objcction to this scheme
ttotirerwisc SO simple, practicable and
bcni6cial-is that it would bc.repudi
alton by thesgovernment to the ex
tent Of Is cents on dollar: We viii
not argue that point, but only adver
to some facts. Itis u fact that nc
present holder Of greenbacks ever re
ceivcd them as the equivalent of-golc
dollars. They have cost their hold
crs only their actual market value
and they have no equitable claim t.
be paid more at the expense either o
the debtors or the country. Thi.
view oycriooks the question Of publ,
faith, which We will not discuss a
present. But it. is. fact that tn
/ government does actually redeem
greenbacks at the various fluctpatin,
market values every month in th
year-that is to say, as often as
makes sales Of gold. it may do
in this form why not in more oper
direct and undisguiscd form: Iii
\ may pay out gold for grecnbacks at
fluctuating market value why not a
a steady market value, especially
the latter method would bring tn
: great advantage Of stable cireul'
ting mcdium?''
p