The herald., 1895-02-13
THE NATIONAL FINANCE
To the Editor OF The Herald:

issue of Government bonds, editorially
said:
cat the time the law of 1870 (the refund
ing aet} was passed there was no silver
agitation, and the WORD coin intlis-
putably meant gold coin. There can be
no reasonable question, therefore, as to
the payment of the principal and interest
of the new issue in gold. 1t is held by
some that the President has power to in
sert the word gold in the bonds but this
is doubtful. -
Yesterday your morning contemporary
said editorially:
Bonds of the Government, payable lin
coin, can be paid in either gold or silver.
This fact is indisputable."
These quotations are placed in juxta-
position for the purpose of asking how it
comes to be that the bonds of the United
States, payable ''in coin, - can now be paid
in gold or silver, if, in 1870, the date of
the law authorizing these bonds, owing to
the absence of silver agitation" the
word ''coin" indisputably meant "gold
coin?" There has been no change in the
law since 1870. What the word "coin"
meant in the law of 1870 1T means now in
1S95-nothing more, nothing less, nothing
else. 1t looks as if your contemporary
had spoken without knowledge when it
said that in 1870 the word coin in
disputaby meant "god CON- Indis-
| putably is strong word and it is better
| for one not to use it unless he is sure of
| his ground.
But, in it's second deliverance upon the
subject of bond payment, your contem-
porary, while conceding the legal right of
the Government to pay in gold or silver
coin, argues that it would be virtual re-
pudiation for it to exercise this option by
paying in silver. This proposition will
bear examination as to its soundness. In
order that your contemporary may be
fairly represented in this discussion, what
it said upon the subject is here given in
extenso
The Governments bonded obligations have
always been paid in gold unless otherwise
specifically agreed upon, and always must be
so paid so long as gold is the preferred metal
Of redemption IN the commercial world. For
the Cove nment to use its sovereign power to
metal less valuable than gold would place the
nation and all its business, public and private,
upon the basis OF the commercial value of the
less valuable metal
The commercial value OF gold is virtually
the same as its coin value, the wor over
The parity OF gold and silver can be main
tanned in limited sense. so long as the G "
eminent refrains from exercising it's sovereign
option to pay In silver. shou it exercise
that option, even its sovereign power would
not suffice to maintain parity between metals
worth intrinsically as 81 to L.
III the Government borrows dollar, aud. by
its sovereign power compels the lender to ac-
cept half a dollar in payment, it repudiates
payment of the half dollar which it refuses to
pay Neither acts of Congress nor presiden-
fact fact Pf00iama' 0n' can alter this memorable
That there would be any vestige or
kind of reputation involved in the Gov
ernment's now exercising its option to
pay its bonds in silver, | specifically and
emphatically deny. On the contrary,
from tl,n etc A,,1t q
morals, common sense, the welfare of the
debtors, who are the people of the United
States and whose creature the Government
is, contend that the Government should
exercise the option and pay its obligations
in silver.
in the matter of the payment of debt,
requires nothing more, and will permit
of nothing less, than that the debtor
shall discharge his debt by giving the
equivalent of the value which he received,
But, through the influence of those who
own the world debts, policy of finan-
cial legislation has been pursued whereby
the value of gold has been greatly en-
HANGED and the value of silver as meas
ured by gold greatly decreased so that, to
require debts contracted when gold was
less valuable to now be paid in gold that
has become more valuable, is to violate
equity and to require the debtor to give
of the value that he received. That gold
has increased in value and by reason of
legislation throwing npon it the whole
burden of ultimate redemption which was
formerly divided between it and silver, is
a proposition whose truth is conceded by
the leading authorities among gold mono
metalists, both in Europe and America.
They have made the concession reluct-
antlv because they were forced to do so by
'indisputable" facts More than this,
the discussion of this money question has
brought out this other "indisputable"
fact, namely, that this policy of gold
monometallism was not conceived until
there came to be great national and other
forms of debt, the interests of whose own
ers lay in making the money in which
those debts were paid as valuable as pos
sible. In other words, it was conceived in
human selfishness. and greed and was
adopted to crafty human avarice.
To paraphrase the words quoted from
your contemporary, for the Government,
any Government or all Governments COM
bned, to use its sovereign power to force
a debtor to liquidate debt in a metal
more valuable than that in which the
debt was contracted, is to violate the
principles of justice and equity, which it
is the first duty of the Government to
uphold and maintain.
But there are other statements above
quoted from your contemporary which de-
serve notice. 1t says: "'rhe commercial
value of gold is virtually the same as its
coin value, the world over
With the worlds minis open to the
free coinage of gold and with gold coin an
unlimited legal tender how could it be
otherwise? 1t seems that your contempo-
rary has not yet learned that under such
circumstances the mint price of metal is
the only price it has or can have. Under
such circumstances the owner of gold
bullion will not take less for it than he
can get at the mints, and no one will
pay more for it than the cost of gold coins.
How, then, could it have any other price
than the mint price? What your contem-
porary says of gold was also true of silver
when there was free coinage of that metal
and for the same reason. The price of
gold is fixed in England by the law that
requires the Bank of England to buy all
that is offered at the rate of 81 los I'D
per ounce. The price OF gold is fixed in
the United States by the law which re-
quires the mint to coin all that is
offered at the rate of 1922 grains
of pure gold to the dollar. The par
of exchange between England and the
United States is the value of the English
pound, which is the English unit of value
expressed in the dollar, which is the
United States unit of value. Take from
gold its lawgiven right of free access to
the minis and its unlimited legal tender
power and its commercial value will very
quickly part company with i4s coin value
the world over. Restore to silver the
right of free access to the minis and the
unlimited legal tender power, and its COM
mercial value will very quickly become