Year: 1877

money standard by which they AZ
, measured. IfIuouey appreciate, thes
shrink and decline: if money depreci
ate, these accordingly enhance An,


considerable appreciation must. there
fore, work more or less detriment de
pending on its extent and the -degre,
: of its violence. If il be so gradua
that the recuperative energies of til,
, country can repair losses as they arise
I the transition may be effected withou
sensible shock. -Is. on the other hand


the transition be so sudden and great a


to paralize the power of continued re


cuperation, disaster must result in pro
portion to the unprepared condition o
, the country and the extent of the


change. That financial policy there
fore would seem wisest which vii, eff
feet a return to specie equivalent.
with the least possible Initiation on the
one hand, or contraction on the other
which will steadily but surely improve
the quality OF the currency without
lserions disturbance of its-existing vol


ume, or violent change of commercial
|, values. This understand to be the
{ policy of the Republican party-the


spirit of the platform of Cleveland


and Cincinnati.


Under the almost exclusive agency
'of business and commerce, the dis


tance between the inflated prices OF


the war period and full restoration


of coin values has been narrowed to a
span. If it were possible, it would be


well to permit these agencies to work
out final res :lts; but it is not. Be-
fore the point can be reached, the
Government must make its notes in
tercOnvertibie. This, business and
commerce can not compel. What
method shall the Government adopt?
1t has beeL urged that it should
make further issue of legal tender
notes and reinfiate their existing vol
ume. The objections to this are in
superabie. The poict to be reached
is coin values. We have almost
achieved the descent from a giddy
height of imitation. The marvel of
finsnciers is that it has thus far been
successfully made without more ser
ious consequences. To reinfiate is but
to again force up the balloon, to haz
ard, it may be, much more disastrous
descent. When we shall have return
ed TO where we are nothing will have
been gained; for interconvertibilNy
will be as distant then as now.


But if a further issue of legal tender
notes were desirable, it is impossible.
Nothing is clearer in the fundamental
law than the denial to Government of
the constitutional power to make its
due bills substitute for legal tender
money, except as measure of defense
in the emergency of war. The pres
ent legal tender notes were held con-
stitutional by a divided court on this
ground alone We therefore ought
not to deceive ourselves, ought not to
deceive the people into demanding an
impossibility.


This disposes of the equally impossi-
BILE proposition TO retire the National
bank currency, by taking up and dis
charging the bonds held as colIaterals
with a further issue of legal tender
notes. The public securities held by
the banks are as inviolable as those
held 10y individuals; they cannot be
discharged with the legal tender notes
of any issue without violating the faith
and honor of The Nation, originally
and repeatedly pledged to their pay
ment in coin. If, however, it were
otherwise, to do so would be unwise.
The present system of free banking, as
authorized by existing laws, is the best
ever devised by the wit of man. Re-
turn to specie payment, enable the
banks to make their notes intercon-
vertible with coin at the pleasure of
the holder, and they will constitute an
agency incompirably superior to the
centralized political power at Wash
ington for regulating the volume of
currency according to the wants of
trade. 1t furnishes to business inter
ests and to the business mea of every
locality, who knows its wants by per-
sonal contact with them, facilities and
power to supply those wants as they
may arise. 1t recognizes the principle
of home rule in furnishing and regu-
tating the volume of currency.


Another financial school insists that
the intercOnvertibility of coin and
paper money can better be effected by
the arbitrary contraction and retire
ment of the legal tender notes until
their value shall be brought to par
with c2in. This implies discretion in
the contracting power at Washington
that might be influenced by virtue. 1t
is a power that can be much more
safely exercised by the people at home
through the ordinary channels of bus
iness than by a central junto of 1oli
ticians piled by the bull and bear lobby
OF Wall str, ct.


1t is the last straw that breaks down
the camel; the last turn of the screw
that cause the fracture. The exist
ing strain upon Western interests and
Western capital by the shrinkage of
values without shrinkage of liabilities,
makes a return to interc onver;ibility
through contraction alone. simply
suicidal. Augmenting the value by
cheer force of making money scarce
would doubly intensity the strain
Dfc1n uN"h N-A-~'f
would cause the final fracture. For
these reasons il would seem the die
tate of common sense that stability OF
volume, insensible appreciation of pa
per money, and the gradual approach
to coin values are things to be united
if possible in any plan of resumption;
and hence, that either forced Imitation
or force contraction of the existing vol
ume by the exertion of arbitrary power
is alike hazardous and unwise. The
existing volume of currency embraces
a portion of gold coin. The gradual
replacement of legal tender notes with
coin money other than that already in