The daily gazette., 1881-04-05
A FAMILIAR FINANCIAL QUESTION

A FAMILIAR FINANCIAL QuEsTIoN
REvIvED.-Quite an animated DISCUS
sion has arisen between the Brooklyn
Eagle and the New York Essntno Post,
which will be remembered by most
politicians. We had thought the
question was dead and settled but it
seems it was only sleeping, and was re-
vived by the action of the National
Banks on the Funding bill and its veto
by Hayes. No doubt the question has
merits. We quote the reply Of the
Post:
We suppose that it is the intent of
our contemporary that the Government
shall buy with its $500, 600, 900 of
greenbacks $500, 200, ,000 of its out
standing bonds. This 10 the obvious
way Of putting out fresh quantities of
notes as proposed by currency reforms
ers from time TO time. We say moth
ing now of the obligation of the Gov
ernment to pay its bonds in gold. We
assume, for the present purpose, that
the holders would take paper for them.
This, then would be the result Of the
ira usaction ; there would be $500. 900, !.
QUO of greenbackS in circulation and
$500, VOC, 600 of tho Government bonds
in the possession of the Government.
To whom would these bonds be paya-
blef They would not be payable TO
any creditor of the Government they
would be payable 10 nobody unless the
Government should enact the farce of
preCending to owe itself the amount of
the bonds. The bonds would be paid
in fact, and in effect they would be
cancelled. L. is true that the NaalS
proposes that, in what IL believes to DO
the improbable event of q demand for
the redemption of the $500, 900, 900 of
notes, these bonds shall be sold ia or
der toget gold for redemption purposes.
But the sale depends upon the good
faith of the Government. 1t could be
as readily trusted to issue new bonds
and to sell them for gold, or TO get
gold in any other feasible way, for in
stance, by means of short interest
bearing treasury notes. We say moth
ing now of the prRcticability of get
ting gold at all in such ali emergency
except at great saorifice-a question
which would have to be considered if
the scheme should be adopted. 1t is
clear, however, that the bonds which
1t is proposed that the Government
shall buy and hold are . mere matter
OF bookkeeping, OF at most are q re-
affirmation of the intent to pay alt eady
affirmed by the issue Of the green aak :.
1t is the case over again of the Auy,s's
making a promissory note payable to
ills own order and locking it up in Its
own safe whenever il gives promise
sorry note to anybody else. There
would be really nothing behind the
greenbacks but the credit and good
faith OF the Government. There
would be really nothing more although
The Governments bonds, owned and
held by the Government, should be
piled as high as the unfinished Wash
lngton monument.
We really cannot see that the Gov
ernment would lack credit. With
5000, 900, 900 Of gold and silver on
hand, 1t would be be better able to re-
deem its paper than it ever was under
the old State Bar x system, during
which the people OF the whole count y
prospered more than the people Of any
Government in the world. The paper
currency is now all backed up by the
Government /; none of the Banks pro-
pose to redeem their noIes in gold and
silver. There is nothing more sure in
dnanoe than that the Government
should have the credit for the sirculat j..
ing medium it sustains. The green
back 10 at premium abroad and
treasury notes that are Aot legal ten
ders would be equally as popular at
nome as the legal tenders are. But
this is question for those who hav q
the finances in charge. The Demo-
Gratis could not introduce this measure
Of saving sz0, 600, poo year If they
| would.