Year: 1868

of British consols should sell for twenty per
cent. less? that the last time money was
borrowed in this country the government
was obliged to promise to pay interest for it
from to 10 per cent. of the sum loaned !?
that no indications appear anywhere that a
considerable loan could he now obtained up
on more favorable terms? The government
OF the United States had suspended payment.
Its credit is impaired just as that of any sus-
pended commercial house or corporation
would be for the same cause. The most ex-
plicit certificates are published that the failed
concern has ample assets, and that the cred
ltors will not lose dollar, but while the
house stands gazetted suspended, its paper is
not likely to circulate as briskly as Bank of
England note. This would be the precise
predicament OF the United States save that it
uses its sovereign power to compel its own
people to receive its repudiated paper at par
as money. This it can do, but j. can not sub
vert the laws that regulate value, nor pre-
vent the apparent appreciation of gold and of
all other commodities to the point that indi-
Gates. the real depreciation of its own paper.


Nearly every scheme of financial reform
that has been broached, involves the borrow
ing of money or the issuing of bonds or notes
OF other promises to pay. All this seems sim
gularly inopportune, not to say impudent. 1t
is like Mr.. Micawber in the height of his
difficulties giving his I. o. u, which he was
always ready to do with punctuality which
he thought redounded highly to his honor
and integrity. 1t is considered piece of COM
mercial effrontery for a failed merchant to issue
notes and bonds. When individuals and cor
poratons get to the stage of refusing to pay
their paper as it natures, the propriety of
Withholding the issue of such paper for the
time being does not have to be limited to
them by their creditors or the public. The
United States does not need to borrow apv.
thing or issue anything at present. A little
cessation OF borrowing, and little squirt of
paying is just what its credit as well as the
obvious propriety of the situation, seem to re-
quire. If it would hereafter, after its restored
soloency has become fully accredited all ooer
the ioortd, borrow at such rates as it is en-.
titled to receive, let it make haste not to an
ticipate in deprecated paper to pay debts not
due, and which the creditor would rather re-
new, but to pay its over due and dishonored
paper.


1t is not the professed creditors, the bond.
holders, who have been defrauded or DELAYED
good faith has been kept with them; but the
ordinary creditor, who is left with the govern
ment promises to pay, wearing to greasy
shreds in his pocket, with no security offered
either for their payment or funding. The
same policy that requires business man to
pay his floating debts, his borrowed money
grocery and supply bills, in preference to hi:
mortgages and secured notes, requires the
government to repay the forced loan it exact
ed of the people in making greenbacks lega
tender.


There was one piece of bad faith on the
part of the legislature which has attracted but
little attention. The first issue of treasury
notes during the war that were made legal
tender were exchangeable for 500 bonds in
4 sums OF $50 and multiples of $50, and the
condition were engraved on the back Of the
bills as part of the contract. Subsequently
| without making any provision for the pay
ment ofthe notes, Congress enacted that un
less such notes should be presented for e7N
ol~..se near aay certain, they should no!
afterwards be exchangeable. 1t not only
thus undertook to change a contract without
the consent of the other party, the original
stipulation being for permanent indefinite
exchangeabiity, but it got Fictitious cur
rency for the paper, upon promise to do
what in an underhand way afterwards it en-
acted that it would not do. The first issue
of greenbacks having obtained currency upor
the faith that it could at any time be changed
into bonds, and made an Investment, the 9th
er issues, which could not be distinguished
from it shared its Fictitious credit. So quiet
ly was this valuable condition Withdrawn
that the instance occurred of persons buying
up the greenbacks of the first issue, in The
expectation of efecting the exchange, which
the law had the year before rescinded.


The pretext for this rescission of the origi
nal contract was that the government ought
not to increase its burden of interest-bearins
debt, that is, it would not do the obvious jus
tice Of paying interest on notes it could no
pay according to their tenor! How short-sight
ed as well as dishonest this was, ,mss be easily
seen now from the fact that the funding of s,
many treasury notes would have made room
for the new issue ofjust as many more in lie,
of bonds with higher rates of interest; tha
the taking away of the right to exchange pre-
cipitated the value with them of the who'll
circulating medium of the country; and a
the heavy payments for the war had to be in
CURED afterwards, thegovernment must hav
lost by depreciation caused by Its own ST.
reputation ten times the interest it had ex
pected to save, but did not save A strikin,
Illustration of the maxim that honesty is th,
best policy.


But it may be said the people do not wan
the greenbacks redeemed. They prefer to us
them as currency and would even be pleas
ed to have new issue of them. The peopl
have used them because the government il
making them legal tender has driven gol'
and silver out of the category of money. ]
they do prefer them as a currency. then i
would seem all the easier for the government
, to make tender of paying them. If tn
people cherish and keep them when they ar
at discount and their payment suspended
they will none the less after they are mad,
equivalent to gold and easily convertible into
it. If man has bill of failing or sus
pended bank he hastens to get rid of it, ant
the bills that are sure Of payment on present
ment are the ones that are not presented.


The first, the indispensable, If not the onl,
step for the Government to take to re-estab
lish its credit, injured, as has been shown
almost solely by its delay of payment of it
demand notes, is to begin and maintain speci
payment simultaneously it should repea
the acts making these notes legal tender
and restore the provision making them ex
changeable for 5-2O years bonds in sums O
$50 and multiples of $50.


The two systems are incompatible witt
, each other The legal-;ender, forced-loan ac
: was war measure, the necessity Of whicl
passed away with the war. When the govern
ment stands ready to pay its notes in gold O
gold-bearing bonds, it may well trust their in
trinsic value to give them currency withou
compulsion. 1t was in anticipation of de
probation that Congress made those notes


legal tender. In maintaining infexble thei
} equivalency TO coin that enactment will b,
come superfuous.


r 1t is believed that with the resources at til
command of the Treasury the demand note
| can hp kent pouiva 1apt bopoofortIx no;,