New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1883-12-08
TILE OLD ENEMY AGAIN.

4 subscriber In Wisconsin asks answers to certain
questions regarding the proposal to issue $780,
600 United States notes in place of bank notes. For
convenience, we put question and answer together :
Suppose the bonds due and the bank notified to return
s circulation and receive for every $50 returned ethe
500 in coin OF I'm the greenback at their option, In
what way would this break faith with the bank
The public faith has been pledged by repeated en-
actments that issues of United States notes should
not be made beyond a certain amount. larger is
sue would break faith, not with the bank, but with
every noteholder every citizen, and every creditor
of the Government.
think the bank would call for the bills instead of the
coin almost entirely.
Notes rest on public faith Those who believed
that the Government had broken faith, as nearly
all bankers would in the case supposed would not
prefer more notes to gold. Everybody would know,
too. that payment of $500, 1000 in gold was i'm
possible, and would therefore want to be one of
those to get gold, before the inability of the Gov
eminent to pay coin should cause gold to sell at
premium.
don't SEQ that there would be initiation of the cur
rency as new notes would merely take the place OF bank
notes withdrawal
On $500. 900 900 Of bonds deposited, there is now
nominaly issued 1910 900 900 of bank notes but Of
this per cent. or $13.5O0,00O, is by law held in
the redemption fund, leaving 1886 100000 for cir
culation. An issue of $500, 100000 notes would
initiate the currency $43, 100000.
Would not this be the mode by which the new notes
would get into circulation all over the country
On November "a there were inst 1901 701 $50 of
bonds deposited by banks for circulation which the
Government has power to pay prior to 1891. In an
attempt to pay off all these bonds with new notes. it
would not only be impossible to put out
$500, 900 900, but probably not even $100,000,0O0
would be voluntarily taken by bOndholders.
II the Constitution gives power to Congress to order
the issue Of such note, of course that ends IT,
The Constitution does not empower theGovernment
10 ssue Lgal-tender notes in time of peace. Other
notes t.cannot put out unless the people are willing
TO receive them in place Of gold due. An act of bad
faith would quickly end the disposition of people to
take promises thereby tainted
II Congress cannot lawfully issue such note where
does get the power to authorize bank to do the same
Congress does not authorize any bank to issue a
note receivable for taxes redeemable by the Gov
notes-that is, to borrow mOney-Only because they
have bought and deposited United States bonds
sufficient to make payment of the notes certainty
But if the Government issued notes to like amount,
would be obliged to pay them itself. That is the
fatal difference; bank note does not increase the
liabilities of the Government.
Ihave subscribed for and read THE TRIBUNE for the last
thirty five years, and look TO it for information.
1t Is discouragng to reflect that fellOw-citzen
can read THE TRIBUNE for thrty-ive years, and
vet stand in need Of information which has been
given in its columns so often that most readers
tired of II.