New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-07-29
THE A B C OF FINANCE.
II.
THE LEGAI-TENDER.

more. That rs q promise or the people, III Ie-
sumption they are keeping that promise The bit OF
paper is a note and resumption is its payment. The
people pay because years ago they borrowed from
individuals gold, OF It's equivalent In bread or pa
con- clothing OF shoes tents medo nes, iron, lead
or powder or other things for the defence of the
Nation. Ii the original lender sold the note, an
other person advanced TO him the value due, having
faith that che people would yet repay IN full. 30
the note passed from hand to hand, at
each transfer some new person accepting the claim
against the people in place OF the properly
or value paid over to the previous holder.
II passed because the people had declared, by for
nal act Of their Congress during the war that they
would paw what they had borrowed. In the Act OF
March, 1869, they repeated the solemn pledge OF
the public faith, though not ready to begin paying
OF to fix day. In the Resumption Act of January,
1878. they fixed day. and gave formal pledge
that after January l. 1879, the United States would
redeem any its notes, If presented in sums of not
less than $50, at the Treasury in this city. When
resumption came, the people began to pay back
those who had trusted their promises. Redemption
of note ar the Treasury is really payment for the
food clothing and arms sent 10 the soldiers who
ceased fighting fourteen years ago. Behind each
note there IS a most sacred debt Refusal to meet II
would be shameless and fool b.
Less than year ago, leading bankers said they
would give $50 900 to have the head Of the line at
the Treasury doors on the day of resumption. Be
cause the Government had in hand less cash Than 1t
owed, they thought Its store would be quickly
drawn out. But before the day came, the Govern
ment had made its notes so good that few holders
wished to be paid. In four months from January l,
only f.125jl2 in notes was handed in for pay
mont while 81 1914, 1S5 in coin was deposited az the
same Office in exchange for notes taken out. For
bs he da4Ir "a oh
stead of gold was quite great as the desire to get
gold in payment for notes held Yet If payment
of one note had been refused, the deposit OF
gold would have ceased instantly, the de-
mand for payment would at once have grown
beyond all limit and the notes would
have sold for less than the gold due
thereon The few who wanted the gold for notes
have been able to get it, and that fact alone has
made all the notes good Is gold TO every holder.
Only because the Government began to pay as 1t
promised have so few holders asked TO be paid.
Only for that reason have many holders of coin
been glad TO lend it to the Government for notes,
and found the notes more useful than the coin
itself Resumption is merely common sense and
common ho- ssty applied TO the debts of people.
II means simply good notes instead Of bad-notes
that men are glad to keep instead Of notes that men
are anxious to get paid.
Jones and smith. two farmers, lost their houses
ana barns by fire. with their grain and hay, their
implements and many cattle. They had to borrow
money. materials and help TO rebClld houses and
barns TO buy implements and cattle on credit and
/ even to borrow food through the long Winter and
/ grain for seed. In due time new crops gave them
/ some means Of payment. Jones began at once to
repay, with the interest agreed, whatever he had
| borrowed But because he was ready to paw, Others
were ready TO trust If some took back the Dor
I .lr,,fy IL tl.av LIFT fo
! be repaid on demand. II some received their money
| fortbIngs sold or work done, others preferred 10
take notes with interest II he wanted more
] money. many were ready TO lend for be kept his
/ honor bright and his credit good That was re-
] sumption; every creditor satisfied. But
! Smith. though equally able to pay, held back.
His creditors must wait, he said, until he
could spare enough to pay all alike.
His promises he insisted, ought to be as
good as cash to anybody. Presently a nei ghbor
needed wheat OF money instead of promise, but
asked in VAN. Then every creditor pressed hnty
for payment Men began to doubt, and would lend
no more. Notes were offered in settlement, but
were taken only at ruinous rates SO he went from
bad to worse. One poor crop made an end oft
the Sheriff seized his land, and Smith went up and
down railing at the " money sharks" the /" gold
bugsr and the " bloated bondholders.'
If the people pay In good faith as as they
can and as far as they can their notes become good
and holders are glad to keep them. Resumption
does not abolish United States notes. IL was an alb
/ surd notion that resumption was scheme of the
gold bugs To force every body 10 get actual coin
/ for payments. Every creditor is content with
| paper that is as good as gold. In no way under the
sun was il possible TO get gold enough TO take the
| place Of all our paper But il possible. and
| has been infinitely cheaper than any other way Of
escape from our troubles to make all our paper as
/ good as gold. Great Britain keeps paper notes IN
/ use because it pays gold on demand. France uses
notes az generally IS ever because 1t has resumed
specie payments. Before the war this country had
paper notes IN general use, without any act making
them a egal-tender, for any man could get gold for
| notes at will. A great volume of notes now re-
/ mains in use not in spite of resumption, but be-
| cause Of it--because every man can get his notes
paid if he wishes Hence contraction Of the paper
currency is caused Everybody prefers TO notes,
| if fey are good, instead of CON- If people should
wish to use coin instead of notes, there would be
! no contraction of the currency; in place Of every
note returned to the Treasury, coin would 90 into
/ use The difference between resumption and sus-
pension OF bankruptcy is not at all IN the quantity
/ of notes aAoat, but in the quality. Suspension
makes them bad for the holder of note knows
| that he can get for it only what else
/ be Obliged to give. Resumption makes them good,
| and gives the people currency which cheats no
| man. because every holder knows that he can al
| WAYS get the gold for his notes if he wants 1t.
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fgr NJ