New-York tribune., 1878-09-30
AN OLD LIE DOING FRESH DUTY.


AN OLD LIE DOING FRESH DUTY.
rux CLAIM OF THE DRMAGoGUEs THAT THERE HAS
RyEN AN ENORMOUS CONTRACTION OF TIE CUR
BENCY.
iBY TELEGRAPH To THE TRIBUNBI
WAsgrNeToN, Sept. 20.-It might very properly
he inferred by one who has kept pace with the
times that enough has been written and said within
the last three four years upon the subject OF the
contraction Of the currency to explode forever the
story that the Government hasretired and destroyed
vast sums of that which at one time formed part
Of the circulating medium Of the country Yet let
in great numbers are received at the Treasury
Department which indicate that this old story
forms the basis Of one Of the favOrte arguments OF
sneakers and writers in the West and South, who
attribute the hard times to the misdirection of the
National financial affairs. According TO these
theorists there were issued between 1862 and 1868
over $500. 100000 of 7-30 United States notes,
which have since been called in, and the circulating
medium of the country has been contracted to that
extent
The fact is, the 7-9Os never did and never were
intended to enter into circulation. by an act OF
March 3, 1853. the Secretary of the Treasury was
authorized to issue compound interest-bearing
legal-tender notes to redeem previously issued de-
mand notes. and to pay the current expenses OF the
Government. These notes. to the amount of $780,
short time remanedin circulation By the terms Ofthe
act authorizing their issue, they were made payable
mot less than three years" from the date of the
massage of the law, and interest upon them was to
cease al that time whether they were presented for
redemption or not. Only one specimen OF these
notes is believed to be in existence at the present
time and that is held in the Treasury Department
All the rest with the exception of about $3OO,OOO
which have never been presented for redemption
and which have doubtless been lost by their owners
have been destroyed, as the law required.
The specimen of the compound interest notes pre-
served is of the denomination of $40 and at its
maturity on March 8, 1885, was worth $l1 "a.
This fact plainly printed the back of the note
and it needs no argument 10 show that such
piece of money, even though aslegal tender, would
never circulate under normal condition of things
BY the side of non-interest bearing legatender note
worth only its face value These compound interest
notes we're redeemed as presented in geenbacks OF
were converted by their owners into nOn-crculating
interest bearing paper of subsequent issues. People
who remember to have seen them in circulation are
Easily led to believe that they identical with the
7-3O bonds which they know have been called in by
The Treasury.
The letters making inquiry with regard to this
matter are so numerous that the Secretary finds 1T
impossible to reply in detail to each inquirer. He
has in consequence had photographs mace, DOth OF
the compound interest notes which have been re-
deemed with greenbacks and the 7-30 bonds which
never went into circulation. In order that the differ
ence may be seen by comparing the two. the
former is the once familiar note bearing in
broad Gilt letters across its face Compound
Interest," The other is an unwieldy coupon bond,
three times the size of an ordinary bank bill and
which very few people who have not themselves
boupht Government bonds as an investment Will re-
member ever 10 have seen. The 7-30s were never
made legal tender and were never paid out by the
COyernment to it's creditors. On the contrary they
were negotiated as other loans have been; and, as 1t
A well remembered Jay Cooke a. Co. were the
agents through whom the bulk OF them We're sold.
Singularly enOugh,sO good an authority as the late
Treasurer Spinner has made the mistake OF saying
In letter which has been widely quoted by Dem
ocratc and Greenback orators and writers, that
these 7-30 bonds were issued and designed TO be
part of the circulating medium OF the country NO
better reply is needed than the fact tnat he never
recognized them such in any OF the reports issued
from the Treasurer's Office while he presided over IT,
The largest amount of circulating money OF all
kinds including State and National bank clrcula-
tion legal-tenders and fractional currency, at the
end Of any fiscal year, was S7ol ,48O9l6 ~ on the
SOth of June 1874 Since that time the experiment
Of gradual contraction has been tried, but has now
ceased the total contraction amounting TO Htue
over 500 600 600. On the other hand the purchas-
ing power of the currency remaining IN circulation
has risen so that il amounts TO within $zTOOO,OOO
Of that of the maximum amount ever put INTO
eircnIa fiou nv the (,oVernment.