, 1877-09-03
4 CURRENCY OF fNTERCQNVERTIBLE
BONDS,

TO fAs Editor o. The Tribune.
CnlcAao, Sept. LIN yonr comments nrnn sfr.
HnnrEn's lctrr of yesterday In th,H mornings
TntnUsE. II seems tn MIC yua nave fallen
into a fundamental crrns. Ton hold that
tic !. J.0slntercllansrnblo OF end 70 earnestly scrom.
mcndcA by ''currtncy tcfoemcrs." ~ re like
to bc called. wonht. instead Ut acting aa d
temporary elalcc far redundancy, absorb and ck-
ttnguish lilo circulation permanently and hllo.
gcfhcr. This woatd atgne. would Il not. the i'm.
possibility Of currency IN tho presence of accusl
tlcA bearing Interest! Yon do not tlnnbt hut that
there securities in sh1A market, all things con-
Bi1efeA. n attractive as Government bolits at i.
~, and Il per cent Interest: Would not n loan.
for Instance, Of $50. 900 on TnE TnnrxE Build.
inr, ut per cent, be recuritT preferable to tho
Governments at 1 per cent Are there not all tho
time such temptations to tho Investment Of ncivr
capsta1t IL not busircsA carried m for tic pur-
pu.c Of realizing better interest than be obtain
ell ly lnams1 Are met satisfied DfRfrais1 with
the bcst securities because Of law rates
OF interest. Tho fact tin: the bonfs would crcu.
nte n - clumsy CURRENCY" would naitatc
against their uec as currency. and you, Dir. Ed
tar. oscrlook thu unvaryinx principle VI currency.
that ''ths cheaper c,Frnlatcs ami the mora ynIna.
bio Ii retired. tho lighter anil ffcrr nutruns tho
heavier. And tl,cac luntls cUHd bc Issued With
out thu ic2nl.tcndet mower, md that nlOne wDn}d
prevent tfer general circulation. Or II n,nde for
sums mt icss than 81. 00n they would he unayati-
able a. currency. When bts!nos. ia !ealthy, md
circulation FREQ, Government bonds arc scarcely
temptation as MI insrrtn1cnt. nnd It sccnls to MO
could mt affect tho circulation IN amy way. Ten
cents day wonld be no temptation fer man Ut
business tt take a bond for 81, O0D that he cou1d
not ray dcbt, OF pay bis tAxcs WITH ur ret his
chanCo for tho askfpg. l ccrta!n1y think yon arc
In error In yuur coN,mcnta. II there wcro 10 dc.
mend for circulating medium, yout position would
bn corrcet- Respectfully, J. c. lsonlSsox.
1lErLr: Dir. Non1Nsoy is not tho first
person who has lad to surrender his idols.
Tho maxim which lo quotes, that II Tho
cheaper currency circula.oa and tho moro
valuable rotircs," hAs no application In tho
case OF IN interconyortiblo-bond currency.
because tho j;sce va1uo Of the bonds aud tho
grconbacks would be exactly tho sau,o. A
dollars worth OF bond md dollars worth
OF grocnback would havo precisely tho aamo
purchasing power. Tho nccn'iug interest
would add nothing to tho tace valuc Of tho
3,G5bond. Tho principal Of such abonl would
always bo worth just tho number OF grcen-
backs 1t called for. The an,ouus Of interest
would depend on how long 1t had bsen run.
ming, aud would attach to tho coupon and
not to the face Of the bond. II tho coupon
woro cut OF, tho bond would draw no interest
until tho timo for tho next coupon to begin
to accumulate Interest. Convertible cur
rency must In the nature Of things 10 worth
for purchasing purposes just the same as
tho money in which 1t Is Reasonable.
Thus National J}ank notes, though not lcgnl-
teuders lavo exactly tho snrne market valuo
rs g.oenback3 no tho convertible boud would
hnva tho anfnn ynltta M tina lprni.tentlera into