New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1878-11-14

General Butler, MS ianguagc may VIC q'"''"
as giving the opinion of great m1ny men,
many of whom are less intelligent than he,
and very many of whom are more honest.
He said:
Gold IL now only Is; that Is. 1t only costs i2l cents
TO get 500 Of IL In greenOacks today before resump
ton prudent man VIII want to insure hmsen lroni
what may come from possible failure OF resumption
he can DO It for l2is cents on 800 by buying gold.
Then If RESUMPTION is his g1d viii DC As geod
as any other money that event. aud then he mas io'
12l. eeuts OH 500 only, has he not or 1922 on
sIo0y0g II Presumption should happen 10 be ialuie'
then he ali right, becae no has got MS goio now
ever high gold may 20. Now what would you say
would be the duty of prudent mon who mas charge Oh
large amounts OF money Ia that beha1t "euiunt ID
ne 10 insure himself so as to be 20 be right, which
ever wav IT turnedi Wen, now. how mony men are
cang t. do thati have no doubt they all VIII.
The mistakes here are almost as many as
the assertions. For % cit costs only Zig
"cents to get 500 of gold.' but 1t would
cost a great deal more on every dollar 10
Get many millions of gold. If ".all men who
have deposits attempt to insure themselves III
this way, they have sense enough TO kno"
that the gold cannot be obtained by one
tenth of them. and the bidding would force
the price up indefinitely. Hence, prudent
IMAM knows that he cannot insure himself
without paving q great deal more than the
insurance is worth. But (2) "a prudent man
does not want to insure himself. Fifty banK
presidents. whose prevailing fault has ever
been m excess OF prudence, formally declare
that they want no insurance, and deprive
themselves of the power to get it. And go
buy,pg gold would not insure anybody, be-
4, nf fhn hanks Ines
day. the holder Will be compelled to take
care of the gold himself, to guard 1t himself
TO lose the interest on it during all the
months or years which may elapse before re-
sumption breaks down, and then to sell It, IL
he is to insure himself in reality, not tor
ereenbacks. but for property at profit. No
body can gain cent by holding hfty MIL
lions in gold If resumption should tall, UNI
less the failure should enable him to buy
more property with his gold than he can DuY
now. but it is inevitable that prices of all
kinds of property would rise Oh the instant
as soon as specie payments should cease
Aud az the cost of buying and sellng-the
mere brokerage-would be much greater than
the l2la cents on the 800 which General
Butler falsely names as the only loss If resump-
IOH SUOulu SutttNhs
The pith of this false reasoning ia the naked
assumption that banks and their depOsltors
will think it safer and cheaper to draw gold,
hold it, and lose the interest on it, tbnn to JON
with the Treasury in making and keeping
their assets and deposits as ,cOod as gold. The
banks have proved conclusvely that this as
sumption is mistaken as to them. They hold 1t
altogether safer TO make both loans and de-
posts rs good as gold. 80 that they can con-
tnuc to get interest on the money loaned
instead Of having it lie idle IN the form OF
coin. and so that their depositors can continue
to employ their money in profitable business
instead of stopping business, closing doors.
and putting their capital into idle gold. But
there was still fear that some depositors
might reason and act otherwise. That fear
was grounded upon the false assumption that
the banks would continue to harbor special
deposits of gold drawn for that purpose. But
the banks refuse to harbOr the gold, AS
consequence, the depositors find that they
cannot afford to draw the coin, hide it, guard
it themselves, and lose the interest on it, AT
a single stroke. all the reasoning of Butler,
Ewing. Voorhees,, and many like men, IL Mt
terly demolished.