Year: 1868

Il =
years. and have tried to make wisdom out OF its
expressed views OH finances. will therefore ask =
few questions. hoping thereby to See hight where
have seen nothing but darkness.


Does The TRIBUNE think that the existence OF
" "greenbacks" Government legal-tendersD retards
specie payments Dos not The demand Jor GOA MAKE


Does not the existence Of Government legal-tcn-
dors take the place of gold, they beins means py
which the banks settle their differences NJ the
Clearing. House, therefore causing less demand Tor
gold, and rather preventing thm CAuslis sVu W oc
at a premium Yours.


Philadelphia. Feb. 10.


Reply-We take the second question first In one
sense the demand for gold makes the price But TINS
is not the sense in which our correspondent speaks
The premium on gold Is due TO other causes than the
demand for gold in the ordinary sense For instance
economists teach ia general way that the demand
for goods and the supply of money and rice rtd the
supply of goods and the demand for money are the
same thing Whoeyerhas 81 900 worth of goods 10 sell
on mortgage or pledge TO get that sum- has supply OF
goods and a demand for money to that extent. Aud
whoever has 81 900 IN money with which he wants To
buy goods. has or creates q supply Of money and a
demand for goods TO that amount. Hence the supply
of goods is always equal TO the demand for money
and rioe rasa. Each fixes the other. In this sense
the demand for gold /. G., the quantity of wheat,
CLOTH houses bank notes, or other property offered
for it, makes its price in those articles-in other



what il will buy. But this is a wholly
different proposition from the statement that the
premium on gold is caused by the demand for it, 1t
is caused By depreciation in the value OF currency,
and this in turn is caused by depreciation in the
value of the Government bonds, and this in turn Is
caused By the fact that Government owes more than
il can save pay in - years and this in turn was
caused by the destruction and havoc of the war-not
by any demand for gold. 2. Do not the Government
legal-tenders take the place of gold. &c.f We an
swer for some purposes they do and for some they
do not and the great reason why We need to return
to specie payments is that no human wisdom can dis
ceTn the dividing line between the purposes for
which gTeenbacks are rs good as gold and those Tor
which they are worth but 70 cents on the dollar.
This unsettes all values and oyershadows all bust
ness with uncertainty and disrust For paying debts
to residents of America at least Of the States east
OF the Rocky Mountains they are good as gold For
paying debts to foreigners for buying property, for
having duties, they are worth but 75 cents on the
dollar For buying real estate and other property,
the value Of which changes slowly. they have usually
been worth more than for buying exports imports,
and pershable property, which rise and fall with
gold.


Legal tenders and paper currency have been the
bridge on which we have crossed from peace to
war; and from war to peace again, without that utter
ruin of our finances and widespread suffering and
destruction of our Government itself, which would
have taken place had we had no other more elastic
currency than gold. In this sense greenbacks have
taken the place of gold and lessened the demand for
gold But greenback is only promise to pay gold.
Gold remains the currency Of the world, and all prom
ises not redeemabe in gold are at discount. Gold
is the eternal par of Financeit is the ocean level,
subject to tides, but still Interchangeable.


8. Do greenbacks retard specie payments' Think
of the country as an individual debtor. II onesnotes
were unpaid past due and worth but IS cents on the
dollar, would we say that those notes prevent the
debtor from paying specieG OF course not. The
want Of the specie prevents him il he hasn't 1t. IL
he has IT. then the want of the will and inclination


is all that prevents his paying specie The notes, un-
paid and at a discount, the proofs that he does
not pay specie; if he did they would not be abroad
IL the Government owed neither the greenbacls nor
any other notes debts it could not pay specie, for
it would have nothing TO pay it for Specie payments
implies system Of debt and credit. We do not
think therefore, that gTeenbacks retard specie pay
ments. But we think that If Government should re-
sumo specie payments, Of the first debts II should
pay of is the greenbacks This is on the same prin
ciple that an insoveut debtor who shonld commence
paying his debts would begin with those that were
in small sums, past DUE and bearing no interest,
knowing that his creditors would be glad to hold the
long interest t-bearng debts an Investment. and
hence that they would not seriously iniure his
credit. or so ostentatously proclaim his insolvency..