Year: 1874




We reprint on another page of TINS mornings
TRIBUNE an extract from John stuart Mills
Political Economy" which viii DO found 10
have most important applications 10 Questions
already agitated In this country touchihg tue
rights of creditors, public and private. line
" equitable adjustment of private debts, TO
wit. the reputation of an lndehhite propor-
ton of the principal, has not yet been advo-
Gated in this country to any great extent. Inc
various communications in regard to the cur
rencv which appear in our columns from time
IN time. do not receive by the fact OF their
publication the approval in any sense of the
editor of this journal We have allowed, as
significant of the state of the popular knowl-
edge and feeling in regard to subject or
ounreme importance, Mr. David Wilder OF
BOSTON. and a correspondent writing from Bal
timore under the signature OF Dorlc'" TO ex-
nress views in favor of "equitable ADJUST
q ament.u We have heard similar views
EXPRESSED in private conversation, ana
have encountered them in two printed books,
Mann's "Paper Money" and Potter's Manual
"of Currency treatises not without merit in
some respects. The Pendleton scheme for
paying off the fve-twenties in greenbacks is
Equitable adjustment" applied to the Public
Debt. "MOderate infatiOD," as advocated by
Senator Morton, practiced by ex-Secretary
Richardson, and legaized by Congress at its
last session. is nothing but Equitable adjust
"mentn applied to the dishOnored part of the
Public Debt called greenbacks. The phrase
Equitable adjustment we commend to DEM
Ocratic Conventions as shorter and neater
than such circumlocutions as payment or
"the bonds strictly in accordance with the
"terms of the contract" and to Republican
Conventions we suggest that an expression in
favor of ga return to specie payments as soon
I" as consistent with the equitable adjustment
" of private contracts to the value of money
"durng the war;" would sound well, and pass
for statesmanlike and profound opinion.


However, our purpose is to point out the ap-
plicatiOn Of the argument OF Mr.. Mill to the
existing state of things in the United States.
The interest Oh our Public Debt was fortu-
nately made payable in gold, and little objec-
ton has been made by States or corporations
to the payment of the interest on their Obli-
cations in currency which has considerably
increased in value since 1866. There has been
not little insolvency since the panic and
before it, but corporations which are able TO
pay their interest would, we suppose, be will
ing to purchase the security which does not
and can not exist under paper currency, sub
ject to periodical imitation by unwarranted
exercises of Executive or Legislative power,
at price a good deal larger than they would
now have to pay in the shape of having their
interest reckoned by the gold standard.


In the third paragraph of the extract Mr.
Mill quotes the opinion of Mr.. Tooke, to the
effect that the value of gold itself was
enhanced above its ordinary value at other
times by the effect of Napoeon's embargoes.
There are several eminent authorities who do
not fully agree with Mr.. Tooke in this opinion,
but if the opinion be accepted as well
grounded, we do not hesitate to affirm that on
similar grounds a great deduction must be
made from the high premium at which gold
was quoted in this country in 1S64-5. The
average premium on gold exceeded fifty per
cent during the year 1854 and the first four
months of 1855. and at no other time was it
for two consecutive months maintained above
fifty, or for longer than two months did the
mean between the highest and lowest quota
ton exceed fifty. Now, to account for the
high premium in 1S64-5, there are peculiar cir
cumstances, which certainly are entitled to
even greater weight than any of those ad-
duced by Mr.. Tooke to support his opinion
that the value of gold in England was
raised above its natural level in 1811-14.
These circumstances are two in number. The
first was the extraordinary expectation of
the precious metals to India to pay for the
cotton imported by England at the high prices
ruling during the famine caused by the block


of IA,
great eflux of the coin of Europe and America
was the maintenance throughout the year 1864
by the Banks of England and France, of the
highest average rates of discount ever reached
before or since causing in turn q heavy drain
of specie from this country and an advance
of the gold premium to high figures. The
second circumstance was tho invasion of Mary
land and Pennsylvania by the Confederate
armies, the large issues of new legal-tender
notes, and the general prevalence among the
capitalists of New-York and London of the
spirit of distrust. These two circumstances in
combination carried the gold premium dur
ing their continuance to far higher level
than it reached at any other time. If the reader
will take the trouble to inspect the table
in The Tribune Almanac for 1874, giving the
highest and lowest prices Of gold for each
month since the suspension of specie pay
ments, he will find that with the exception of
the extraordinary period above mentioned,
there are no market quotations which can
Justify higher estimate than fifty per cent
for the premium on gold caused by imitation.
Now fifty per cent premium on gold means q
depreciation of the paper money of thirty
three and one-third per cent below the gold
= l. IL .o1f


advocates of the Pendleton scheme of re-