The Providence news. (Providence [R.I.]) 1891-1906, 1896-03-14

tied quantity OF convertible government
notes not only safe but possibly adyan-
tageous. This plan Is to establish an ade-
quate gold reserve; to separate the rev.
enue department from the issue depart
ment. and to withhold the redeemed legal
tender from reissue except In exchange
for gold. This reform will restore the
convertible legal tender permanently 10
the conditions that they enjoyed by accl-
dent between 1879 and 1890. AS soon ms
we grasp clearly the idea that convertible
legal tenders are just like specie, we see
that the arguments against them are de-
prived OF their effects"
In closing, no asked his opponents to
find some flaw In the workings OF the pro.
posed system, or 10 show some way I'm
which the convertible legal tenders differ
from specie, except that they are more
convenient, and closed by saying that un-
less this is done IL cannot be proved that
all the legal tender notes should be re-
tired.
Not Amount. but Kind.
Frederick William Loetscher, Princeton,
'e6, OF Iowa, opened his remarks ty point.
ing out that the negative has mistaken
the nature OF tho question, as IL was not
the question OF the amount OF money tho
treasury has, but is fundamentally one Of
the kind OF money. Our present credit
currency has Deen excessively inflated
without % corresponding change in the
credit basis. Facts since 1890 point to u
redundancy OF money.
Gradual undermining OF public conf
dence he said. has inevitably followed
the governments attempt to manage u
credit paper without the indispensable
functions OF discount and deposit. II
these notes were retired, the contraction
would at most be slight and of no disas-
trous effect. The example OF Russia,
Italy. Austria, Egypt aud France prove
the wisdom Of such u course. Moreover,
our currency was virtually contracted 20
the extent Of S6o,0O00JO after the recent
bond sale, aud there was no monetary
disturbance.
The affirmative proposes gradual re-
tirement of 30000.0J0 a year, TO avoid
sudden change. This vacuum would be
adequately filed by inflowing gold after
the restoration OF confidence, and our
financial system would thus obtain stabll-
ity. Moreover, the national banks would
come to our aid and add elasticity to the
currency.
The wind-Up.
Fletcher Dobyns, Harvard's third
speaker, after briefly reviewing the points
already advanced by his colleagues, pro-
ceeded to point out what he considered
fatal objections 70 the substitutes for
legal tenders, which have been proposed
The speaker argued that IL the legal ten
ders are retired and the banks issue tho en-
tire volume Of paper money as proposed,
the system would be inadequate, since
the volume OF notes would always vary
with the premium on government bonds
rather than with :he demands OF bu.iness
But IL IL were satisfactory it must soon
come TO an end. rs the bonds will MATURE
In a short time and It's retention woulI
necessitate u permanent national deb:
which in this country is impossible.
Mr.. Dobyns also argued that the legal
tender system possesses great positive ad.
vantages that demand It's retention, and,
finally, that the principal objection urged
against il is without foundation. Among
the advantages Of the system, the speaker
cited the fact that il constitutes a great
saving TO the people and serves TO relieve
the strain upon The worlds gold supply,
and said that to abandon the legal tenders
would be nothing short OF financial mad
ness, rs such step wOuld contract the
basis of credit, alter existing contracts
and prove disastrously injurious to the
business interests of the country.
After the contest the debaters and in
vited guests adjourned TO the Empire
cafe, where n banquet was given. Josiah
Quincy Isesided. and among those who
responded to the toasts were President
Eliot of Harvard George +. Williams,
Professor Hadley of Yale, ex-Governor
Long and Professor Mayo.Smith OF
Columbia.