Year: 1874

OBJECTIONS TO THE COMPROMISE"


The news from Washington is that the
President will veto the wild initiation bill
passed by the Senate SHOULD it ever reach
him), but that he is willing to accept the bill
reported by the Senate Finance Committee.
The political situation is supposed to require
that the currency shall be subjected to a sur
gical operation of some kind, while the saliva
ton of the Administration depends upon the
preservation of harmony among the party
leaders. The welfare of the country is to be
subordnated to that of a political Organiza-
ton, and both infatonsts and their Oppo.
nents are to unite in an effort to
mix fire and water. The position of
affairs is full of peril. Ignorance and
insincerity dominate in Congress. The
few statesmen who still ornament the cOun-
ellis of the nation are without a party, and the
undisciplined rank and file rush wildly about
without leader, threatening every moment
either to sink the ship that carries them or to
rush headlong into the sea themselves. The
President points out to his followers the Sher
man Finance bill as the haven of safety, and
calls upon Senators and Representatives Of all
shades of opinion to compromise" their diff
ferences and unite in favor of actual in
flation and sham redemption. We wash our
hands in advance of this sO-called cOmprO-
mise, and denOunce it as a compound of ig
nOrance and guile.


|. The proposition to make greenbacks equal
to gold in value by exchanging five per cent
bonds for them after the 1st of January, 1877,
is worthless. There is nothing to prevent this
Congress at its next session, or the next Con-
gress at either of its sessions, from postpOning
the operation two years more, and so on IN
definitely. The removal of the restriction
imposed on the Bank of England from paying
its notes in cash was postponed in this way
again and again. The removal of the income
tax was put off year after year in the same
way. The trick is stale one.


H. The proposition to get back to the specie
standard by exchanging five per cent gold
bonds for greenbacks at par, while the bonds
are worth in greenbacks premium of fifteen
per cent, is sheer experiment. AS we pointed
out in discussing Mr.. Shermans project over
a year ago, its success depends solely upon
the amount of contraction it effects upon the
paper circulation, and that, it will be observed,
is chiefly to be determined by the Secretary
of the Treasury, who is thus given con-
troll of the money market greater than
Boutwell, and Richardson ever claimed.
Strictly construed, the provision in the last
section Of the BILL forbidding any increase
of the principal of the Public Debt, prohibits
the reissue of single dollar of the green
backs received in exchange for bonds. A
more liberal construction would allow the
greenbacks to be reissued to the amount of
the surplus gold in the Treasury, which might
be used in paying off Five-Twenties at par,
the reduction in the Public Debt thus effected
being neutralized by the reissue OF green
backs. We see that in so far as the act in
wolves contraction it is Objectionable, since
the rate of contraction is left entirely to the
discretion of the Secretary of the Treasury.


III. If we interpret the act on the SUPPOSE
ton that there is to be no contraction, we
have presented to us the problem of perpetual
motion. In the words of Lord OverstOne, it
will be trying to fll tub which has no bot
tom. The relative value of gold and green
backs, supposing public and private credit to
remain the same, is purely relation of guam
tity. Upon the present supposition 1t is not
contemplated either to increase the quantity
of gold or diminish the quantity of green
backs. Why, then, should the gold pre-
MUM be aifected3 The whole funded
debt might be converted into five per
cent bonds, when the water would
be exhausted, but the tub would be as empty
as ever Under the circumstances many per-
sons would wish to convert greenbacks into
five per cent bonds. But the greenbacks,
being paid out again, ,.would continue to be
as plenty as ever. Only one thing could hap
pen: The market price of five per cent
L0.d. having hem rednnnd fiftaan ner cant