The New York herald., 1877-02-16
w A SHINGTON.
FROM OUR SPECIAL CORRESPONDENT.

WASHINGTON, Feb. Is, 1871
Mr.. cERNUscHIs PLAN FOR REsUMISG SPECIE
PAYMENTS IN GOLD AND SILVER IN JANUARY,
1S7S-THREE HUNDRED MILLIONS TO BE
ISSUED IN UNITED STATES STERLING con-
SOILS.
Mr.. Henry Cernuschi, the well known French writer
ON finance who has given important testimony before
the Silver Commission here has, after consultation
with public men and thorough study OF the financial
situation IN this country, matured plan by which he
thinks the country could resume specie payments on
the LIST Of January, 1873, and he will tomorrow sub
nit this plan TO leading Senators and Representatives
we'll TO prominent bankers In New York. Mr.
Cernuschi's plan. which Is sent you in full herewith
is that of European 6nancer who has had exne-
riencc in the placing OF great national loans France
and elsewhere He OF the principal advocates of
the double Standard his plan looks the adoption
OF this by the United States, wnilc the operation
he proposes would, he believes, lead certainly 10 the
rehabilitation OF silver in Continental Europe and even
in England. The interest on tho loan, he proposes
would DO paid not in gold or In silver, but in pounds
sterling which would give the option Of either or both
metals He asserts positively that the whole amour,
Of the loan. submitted under the conditions he sug
gests, would be subscribed in twenty iour hours.
The following Is Mr.. Ccrnuschs "Plan for tho re.
sumption OF specie payments IN gold and silver on
January, lS1S:"-
The Secretary OF the Treasury to bc authorized ana
required. rapidly practicable, TO open for three
days in the principal markets 0f Europe public sub.
scription TO loan OF ES5 900 sterling nomnab,
be called United States sterling consols, with pcr.
petua interest at the OF tour per per annum
payable half yearly, London, IN pounds sterling
Tho coupon first due shall be paid on tho LIST day OF
October. 1877, Tho price OF issue snail be under par
such ratio in the judgment Of the Secretary OF the
Treasury will insure the success OF tho operation
The nsalmcnts on the lonn shat! be payable monthly
aud shall extend over period OF twelve
months with option OF payment in advance under DIS
count, ut u rate TO be fixed from time by the
Secretary OF the Treasury. Should the amount ap-
piled for be III excess OF the whole amount OF the
stock tho subscriptions will bo reduced pro rata The
expenses OF tho issue will be paid out OF the funds
produced by tho loan.
The United States sterling consols exempt IRON
the payment OF all taxes or duties OF the United
States The specie payments resumption will take
place in January, 1875 and tho grcenbacks VIII
tnue 10 circulate, but certificates Of deposit reim
bursable in coin, at call, in Now York.
on and after the 1st Ct January, 1878, tho Mints Of
old silver dollar, weighing 4i2H grains. nine teu,hs
ne and upon the adoption OF this plan the weight Of
the gold dollar will be Immediately raised 20 26 81
grams, nine.tenths fine, and the gold pieces will TO
coined accordingly. Tho Mint charge Tor converting
gold and silver standard bullion into coin shall bo
equal for tho metals the o. half pcr
dollar coined. Until the 1st Of January, 1875 the'gold
coins currentmay be exchanged for gold coins
dollar for dollar, at the Office OF tho Assistant Treasurer
OF the United states, in tho city of New York, after
which time they will cease TO be legal tender. ON
and after the ls Of January, ls7s all existing debts
stipulated IN dollars, OF whatever denomination SHALL
without exception, be payable in the new bmctaic
currency; and gold and silver dollars shall be equally
legal tender In full for all payments.
Mr. Cernuschi adds the following explanatory note: -
To resume specie pay yments the Government OF the
United States must not only retire $500, 600 900 OF
grecnbacks but also supply their place by putting into
circulation $500 000 900 OF metal Should the green.
backs be converted directly to bearing bonds
the country, being deprived Of currency, would be
exposed TO monetary crisis, and the Government,
after having issued bonds In exchange
for grcenbacks, would possibly be under the necessity
Of issuing ncwgrecnbacks Admitting that the OF
exported imported merchandise shall result an
importation ofgoj, and admitting that the Nevada mines
shall be very productive, the metal SO imported
extracted Is not tho property Of the Government but
Of individuals; and tho fact still remains that II tho
Government shall retire greenbacks, IL will have to
procure metallic sum Of $500 900, 900.
For that purpose bonds mus. be issued, but what
bonds? II the government issues bonds with prncl-
pal and interest payable in gold and silver at its pleas.
las are all the United States bonds issued IN Eu-
ropo up to the presently, and II at the time the
aw.oi 1873 prohibiting the coinage of silver is abro-
gated. these bonds will undoubtedly be refused in Eu-
rnpc Europe has taken them until now because al.
though stipulated payable in gold or silver dollars,
there silver dollars existing and silver dol
lars could bo coined But If you begin to recon silver
dollars all Is changed; silver dollars then your
disposal and as The coinage OF silver rs now
prohibited throughout Europe ana silver
is there no more than q merchandise without
monetary power, your bonds would be unsuitable
AUSTRIA which has always issued silver bonds,
Gently obliged Ia issue gold bonds. IT, the other
hand In beginning TO recoin silver dcars you should
issue bonds with principal and interest payable cxclu
sively in gold dollars, you would recognize the gold
dollar as having superiority over the silver dollar
In place OF the b'metac standard would then have
two conflicting standards, gold international
and silver merely national money; all your gold
would DO rapidly exported and you would remain with
only silver As compared with such n result, IL would
be better to MAINTAIN tho present national currency
The greenbacKs, and thereby to the government
the burden Of issuing new bonds.
The only safe means TO overcome all difficulties is 10
issue external loan In sterling. BY this you
only avoid making distinction between the gold dol
lar and the silver dollar but you do not engage pay
the coupons expressly in gold You will pay In pounds
sterling The pound sterling was for long time OF
goc and silver then OF paper IL Is OF gold to-day,
but before long may be again Of gold and silver
Therefore, II Is evident that for tho American people
debt in sterling less stringent than debt IN gold
dollars Once In possession of $500, 00O,O 900 OF gold
produced by the sterling loan the Unied states Will
be strong enough to establish bmctaism. Then France
rccoins silver willingly, ana the general rehabili-
tation OF this metal follows natural consequence
Silver being rehabIlitacd In America and IN Europe,
the silver dollar having the same paying power the
gold dollar you inure nobody In declaring that all
debts stipulated In dollars OF every denomina will
be paid in the new bnetac money, dollar for dollar
All this Is possible with loan in sterling All this
impossible with loan In coin doIlars. Beng drained
oil considerable sum OF gold England cannot fail to
sec TO what dangers she IS exposed by her gold
motalsm and perhaps she will consent TO confer with
the powers tor assuring by international law
rho subscriber will have 10 deposit only the
small SUN which will be sufficient to guarantee the
payment OF all the instalments Issued under par tho
United States sterling cOnsos will easily
premium on the market soon the subscription is
announced, and the whole stock will be eagerly sought
after as well Tor permanent Investment as for specu-
lat0n. All loans Issued IN France within the last
thirty have been issued by public subscription
and under par Through this method France obtained
the money required for the wars IN the Crimca and
Italy Through this method France was empowered
to pay so rapidly the German indemnity. Once tho
subscription covered land II can be covered within
tweDyour hours more than $500 900 600 gold
sure1 10 the United states and the OF paper money
is closed.
The reason why The issue OF perpetual debt is pre-
icrablc that OF debt rcmbursabe at fixed date is
that when the amount Is very large the engagement
reimburse al fixed day Is too oncrous. And u for
this main reason that tho English consos and French
renics are constituted as perpetual funds
Let the United States finances be prosperous. The
excess Of the revenue VIII then be first employed To
extinsuis the dollar bonds and when the perpetual
debt shall be the only debt in existence IL will be easy
10 reduce u IN buying bonds on the market
or by rcimbursing them in series Raise
the weight Of the gold dollar to 206l grains,
in order TO establish between the weight Oi tho
gold dollar and tho weight OF the silver dollar tile
ljis-a ratio without which bmctasm cannot be
IcuIzcd II IoYIyc The rniin Ii Eraucr cuunul re