New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-11-17
ELEMENTARY FINANCE.
Sponge.

"An Old Reader whose letter was printed
on the / 4th does not clearly forescc the results
of imitation. "IlOnesty is the best policy" 1t
is always safe to be honest, whether we can an
ticipate results or not We have shown that
any increase of legal tenders, whether in pay
"ment" for bonds or otherwise, would be dis
honest. But it is not hard to show that it
would he ruin0us.
The United States is farmer or business
man, who has on his property certain time
mortgages bearing interest, and has also
unpaid some demand loans for borrowed
.m0ney. The bonds are mortgages, the green
backs are promises to repay on demand
money borrowed. Read the face of the
grcenback: "The United States will pay To
clearer one dollar" What is one dollar" +?
l. is. and was when ali these notes were is
sued. a piece of gold, nine-tcnths fine and
weighing 25s1o grains That is the dollar
the greenbacks are promises to pay that dol
lar. Their value depends on the faith of the
Government, and on the quantity OF them Is
sued. If can Old Reader has mort
gage on his property, and certain floating
promises to pay borrowed money on demand,
me can make those promises worthless by sSu
Ing too many OF them. Men will know that the
number is so great that lie cannot pay, and
that if he had meant to pay he would not
have issued so many. More grecnbacks there
fore means, of necessity, that greenbackS are
worth less The ability to pay is the wheat
in a warehouse; the gleenbacks are certif-
Gates promising to deliver that wheat if more
certificates are issued than there is wheat to
deliver. each certificate represents less wheat.
Moreover, excess of issue proves fraud, and
nobody can guess how much the issue may
then exceed the ability to pay.
The United States cannot hope to pay It's
demand notes, or to meet existing mortgages
when they fall due, unless it has good credit
with people who have money. But those peO-
plc will give it no credit if it breaks pledge.
The people who have saved nothing and owe
much and who camor for imitation, cannot
lend money, aud their opinion counts for
nothing. If the United States issues green
backs for bonds, it breaks faith. If it issues
any more greenbacks in any way, it breaks
faith because, in order to make its de
mand notes of value, it has pledged its faith
by act of Congress, that more shall not be is
sued. If it breaks faith, it makes its legal
tenders worth less, aud its bonds unsuitable.
If i; cannot sell bonds, it must become bank
rupt when bonds fall due. If 1t makes green
backs worth less, it robs laborcrs OF part Of
their wages robs men who have saved OF part
of their savings, frightcns capital. and drives
it from employment IN trade or industry. VIII
that avert ruin 7
No; ruin is here already, for very many,
because we have so long tried to use promises
to pay OF doubtful value in place of money
That makes business risky. That makes labor
suffer, because its wages are of uncertain value,
because employers cannot count with conf
dcnce upon future business, and because all
savings are of uncertain value. We have tried
that for years. Many thousand failures each
year, and many thousand men out of
work, are the results. For some months
we have been trying another plan to
make the paper promises worth more,
and of more steady value. 1t has brought
work to many laborers, light to many dark
! ened furnaces and foundrcs life to many silent
| mills. Yet it has accomplished comparatively
little, because men have doubted whether III