New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1878-04-08
The UNDERST4NDING NTH orr CGED-
TTIBS


ITORS.
4 correspondent asks what we have to say to
the FREQUENT assertion that there has never
"becn I'M understanding with the creditors of
" the Government that they should bc paid only
Gin gold" and that mot the slightest trace of
"this understanding can be found. Surely,
he who believes this statement must consider
1t the stlangest thing i'll the world that for
eigncIs who so recently bought bonds most
eagerly have now made haste to sell them at
the rate of SO, 100000 or more within three
months Ii is true that the Act authorizing
the issue of funding bonds names not gold
only, but "cOin of the present standard value.
The silver and the gold dollar were then
"cuns of the standard value But no one
expected to pay, or To be paid in, anything
but gold. The silver dollar had entirely van
ishcd from the country. All the American
silver dollars which had ever been coined, II
all could have been brought back from for
cign countries, or from melting pots, and gath
cred up by the Treasury, would not have sui
feed to pay one months interest on the pub
lie debt, so that payment of the coupons In
silver was well known to be physically impOs-
sible. These facts Undcniably formed part,
and an essential part, of the entire under
standing between the Government and its
creditors. But there is far more conclusive
proof in the prospectus of each loan, as pub
lished by the authorized agents of the Gov
| eminent.
In the prospectus of tho per cent loan, as
published in England, bonds were offered for
sale by duly authorized bankers, and it was
! particularly announced that " an officer OF the
" United States Treasury will remain for some
time in London to inscribe, free of charge,
" the bonds into the names of such holders as
"may desire it," Yet this apparently official
announcement described the loan thus {:
Principal rodcemable at par after 1st Of
"May, 1881, in United States gOH coin" Was
it conceivable that published announcements
made in the very presence of L" an officer of
"the United States Treasury" and stating
that he was specially sent to Europe to assist
the sale of these bonds, would seem to
anybody less than official in character Z?
The AZ per cent prospectus also announced
the presence of the officer of the Treasury
and described the loan thus Redcemable
Gin coin of the standard value of the United
Estates, on said July II. 1870, gold coin) with
interest in such coin" 1t is not strange that
these words of explanation, "gold COIN" were
inserted. No officer Of the Government then
supposed that anybody would ever propose to
pay in any other coin. 1t was known that
other coin did not exist, and had never been
produced, since the foundation of the Govern
ment, in amount sufficient to make sin
gle payment. Not only was there plainly
general understanding on the part
of buyers, but it was fully warranted by de-
ClaratOnS published under the eye and with
the sanction of officers of the Treasury specially
designated to represent this Government in
London. Any contrary understanding, prior
to 1878, would have involved an expectation
of payment then physically impossible and
belief that the official specially delegated 10
represent the United States Treasury in Lon
don was deliberately cheating buyers by
countenancing false public statements.
1t is very strong proof of the existence and
nature of the understanding that, notwith-
standing all the discussion of United States
loans in foreign journals, correspondent Of
The London Economist, after searching, finds not
n single expression of doubt as to the mode
of payment until September, 1876, when The
Daily NerS observed:
Our attention has called fact that the Act Of
Congress authorizing the operation does specifically
mention gold the medium In which the loan Is
redeemed but IL is hardly likely, considering the present
depreciation in the metal now. and what may be
expected of the future that any other will be employed
uOreorer The prospectus ia The outset distinctly states hat
Il is redeeBd5Ic in goN coin, although 1t might be ad
yisabe for the American Government to introduce the
word "gold" before "con Of the present standard