Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-09-26

bon rule for the next dozen wears.
Wealth here Is almost omnipOtent and Its or
ganiz ,ion is very perfect, but you'll see that once
awake the masses will smash rings, journals and
parties aud hat neither wealth nor the seaboard
rules tins people
Yours truly, WENDELL PHILLIPs.
AUGUSTA, MAINE, September %, 1873.
WENDELL PHILLIPS, ESQ;
Nv Dear SRI remember the conversation ~
the Senate chamber to which you refer. and
beg to recall to you-posslbiy more fully than
then siatedthe objections to the inter convertible
| bond o. the basis OF our currency. | am aware
that many wise men besides yourself have APP
proved aud advocted this theory. The power to
hold bond which NAV at any moment be con
yeIted into legal tender notes Tor It's face value,
and to have legal tender notes which may at any
moment be converted into bond at par. appear.
at iist SIGHT attractive. But no scheme Is more
dec, ptive or deusive, and will briefly state the
objections which seem to me insuperable.
Fusl-If the bond be of sufficiently high rate
| of interest to float the currency even to an sp
proXimste equality with coin-ssy four per cent
| OF theresboul-thc inevitable tendency Will be Tor
the currency run into the bond rather than for the
| bond to be exchanged for currency, and this with
such force and volume at critical times as to com
pei a scarcity of notes, an overcoming strin-
gency in the money market and general insts
biry in affairs.
Second-lf you make the bond of rate so
low AS to avoid the tendency and the danger just
stated. YOU Of course abandon al idea of having
your currency at par with coin. II your inter-con
verible bond 10 worth but IS OIL 80 cents tn c dol
lar in coin you thereby fix the value of your cur
reucy at twenty or twenty five per cent. below
par aud you Danish coin from your crcu latiDg
medium absolutely and tnally.--So that, If your
bond be that will float 8 currency al par with
coin 1t will steadily and rresstibly tend to con-
tract its volume And If you seek to avoid this re-
suit by lowering the rate of interest the bond,
YOU render equality with coin impossible. Ia
either event the scheme would work its own des-
truction-switt and sure.
Thrd-No device was ever conceived that
would give O more complete advantage to IN
healthy speculation of all kinds, tnan the inter-
con eriihle bond. Several times within the past
ten years we have witnessed lock. up Of green
backs BY Wall street combinations, with view to
dnancial ends. which were at wih the public
good SO promising and so profitable were these
euds that the spectators could afford to have
many millions oil greenbacks lie idle in order TO
force n stringency in the money market. Your
inter convertible bond would open the way for
this class of financial operators to clock up
| greenbacks aud have the government pay them
| interest on the whole amount, while they might
| be conspiiiDg to derange the business Of Q con-
| tneut and depress the value OF every farmer
| crop in the land. In other words your theory
would force the government to be an accomplce
| in every gambling scheme devised in Wall
street against the peace and prosperity Of the
country.
Founh-Every year as the spring business
closes and summer comes upon us, there is q vast
accumu aton Of money that lies idle for three or
four months at the financial centres; in the vaults
of the banks, in the safes of capita lists. in the
tire asures of railways, and in the strong boxes of
Insurance companies. During that period-nesr-
ly one fourth OF the year-there are from one hun
bred and fifty TO two hundred millions of idle dol
lars in New York and the other great money cen
tres and these dollars all belong to rich men.
Your inter. convertible bond would provide an ad-
mirable mode for these capitalists to take large
amount Of interest from the government at q sea-
son when they cannot get il from any other source.
But question whether 1t would be quite fair to
tax the whole people during the hot months Of
su mer in order to insure to the wealthy CAPT.
talists of the country good income on that large
sum of money which would otherwise be idle
while they are enjoying the mountain air and he
sea breeze.
Fifth-rhe inter-converihe bond would lead
to postponement in the payment of small bills
and debts in the domestic business of supply 10
every day life. 10 our present system q large
sun of money is carried at all times on deposit
without interest When bills are presented from
The "butcher, the baker or csndestick maker"
he man having money on deposit not drawing
interest readily pays them, for there is no profit
to him 10 putting off his creditor. But once
teach every man who has surplus of ready
money that he can deposit it with the govern
ment and draw interest thereon, and the inevta-
BILE tendency is to place it there aud keep il there
| as long as a creditor can be denied, avoided or
| evsded. The advantage in all branches of trade
and labor OF promptly paving small bills, not
drawing interest, is incsculabe. The inter con-
| vertible bond would stop this at once and would
array the avarice and cupidlty of the moneyed
class against it. The interest paid BY the gov
| ernment would go into the pockets of the rich
and the nter-conseitible bond would AGAIN make
the government an accomplish with the capitalist
10 withholding his honest dues from the work ing
man,-the government meanwhile paying the rich
man interest on the money that honestly belonge ed
IN the poor mans pocket.
Sixth-ls it not apparent, from the considera.
tions thus hastily summarized that no form OF
cur ency could be devised which would be so con-
slant aud so oppressive as the inter convertible
bond, IN the taxation il would impose on the peo-
pie 7 II would make the G ivernmeut the con.
slant repository for the surplus money of the rich
who would use II as the resting place for fortunes,
waiting more permanent and more profitable in
vesment Ia short, the whole scheme would end
in making the Government snswerable for interest
on money that for the time could not be used in
any other investment. Ii would incur the general
0dlum OF taxing the many for the benefit of the
few, OF exsctng from the poor a contribution to
pay interest 90 the rich mans money! at a time
when the Government did not need il and could
not use it.
You urge that our party should have taken
ground 10 favor of 1.-THE Government's issuing cf
all The paper note currency, the same to he legal
| tender everywhere and for every purpose" Your
language implies more than YOU rea ly meant 10
| onvry for your "evttywhere" is nece- sarily
| limited 10 our own country and you proceed
yourself to limit the illegal I. NIL for epery pur
| pose bv declaring that the principal and interest
Of your inter convertible bonds shall he ''payahle
| "a coin" The moment You take the ground
hat the principal and interest of the bond. shall
| he Yad 10 coin, YOU sepa at yourself absolutely
| md ifrecuncaby from The advance guard Of the
Greenhack .chool of fnanciers who refuse TO in
| rul any obligations to ray coin. Aud you will
| observe that while your theory proposes to pay
both pii cipal and interest of your bonds in coin
YOU provide no way TO secure the coin but make
your paper money legal tender for custom. and
| all othel dues. lon seem TO approve the wisdom
III Republican legislation 10 SO far as t. make
"ovetnmen, bonds payable 10 coin, bat YOU fail to
90 with the same legislation in providing an eff
ncient aad certain mode of securing the coin,
| note ta's a- among the most glsring defects OF
Von' in'tr-convernble theory-one among many
'ha' leh1tf u adoption by the Republican Party
| ini"s'lne. Moreover the scheme would have proy.
eI lame n'noly Insufficient to sppease the demands
OF Inc nat money advocates. 1t would not even
nave proved a"sop TO Gerber us" and TO have re.
,orieh to 1t would justly have xposed the Reopb
| hcsn Party bret TO ridcule and then 10 disaster
| But 50 long a. you Acknowledge the value Of
| com a. a means Of steadying YOUR a. s,sm az in
ter convertible bonds, why are YOU no, willing IN
| admit the penpla n he fuu adj