Year: 1874

We have not considered it any part OF our
professional duty to propose specific plans 1or
CARRYING into effect any of the financial re-
forms we advocate. IL there is a will 1T VIII
not be long before the way is found. we
went to an architect for plans Of our new
building, and whenever the Government Is
ready to fund tho greenbacks, or negotiate
new loan at a lower rate of interest than 1t
is now paying we trust those who make 1t
their business to place great loans VIII be
consulted as to the details Of the operation


Being convinced. however. that the measures
indicated some months ago by the President
as necessary to be taken, if we are ever TO
have a currency Of stable value, are entirely
| practicable, VIC here depart little from our
ordinary practice, and propose specific meas
ure by the aid of which greenbacks may cease
| to be legal tender, and sp cie payments be
resumed in July, 1876, without conyul-
sion This measure is simply to authorize
| the Treasurer at New-York to sell for green
backs to the highest bidder, every week, one
or two millions of five per cent bonds of the
new loan, the greenbacks received therefor to
| be destroyed, and the legal-tender circulation
| permanently reduced by the amounts thus



| is ct par That is our plan, and the whole OF
it. Had the Secretary Of the Treasury COM
menced withdrawing grcenbacks III this way
| last December, and continued the process, we
| have not dOubt that the premium on gold
vOuld now be several units lower than 1T is !;
| that instead OF twenty five millions of gold
having passed out of the country during last
Summer, merchandise and securities would
bave gone instead, and that business would
be ~ good as it is now, il not better


| What is proposed to be done is this: to
cause, between this and July, 1915, the
discount Of nine per cent on the paper
money of the country to disappear. NO
one will deny that there has been within tho
last twelve months fall in general prices OF
ten per cent, and probably more. In many
OCCUPATIONS labor has been reduced ten and
even twenty per cent. There has been, how
ever, no corresponding fall in gold. 1t stands
now at the price it brought four years ago.
We maintain that in the present condition OF
trade. industry, and credit, not only here but
throughout the commercial world, 1t has been
and is still in the power of the United States
Government to cause the gold premium to
disappear, without any serious effect on gen
eral prices. II we wait two or three years un-
I'll the whole industrial machinery of Europe
and America is once more under full headway,
credit at h;gh tension, and the currency in
countries using specie worked up to It's
utmost capacity, the state of things will be
very different. Within twelve months the
Bank of France, which for our present pur-
pose may be considered the same thing as the
French Government, has withdrawn from cir
culation ninety-five million dollars in paper
money. and has increased the specie III its cof-
fers by one hundred and ten million dollars.
Here is downright contraction of two hundred
and FIVE million dollars in twelve months by
nation inferior to the United States IN popu-
Iotion. credit, and resources. The paper with
drawn has been taken, OF course, IRON france
but the specie has been drawn from .hc Whole
world. Some of it has come from the United
States. Yet any man can borrow from the
Bank Of France, on the same conditions rs
usual. at the rate OF four per cent
per annum.


The method of contraction pursued by the
Bank of France and the French Government
is substantially identical with that here ie-
commended. The expansion OF its circulation
was rcsorted to by the Bank in order to make
loan to the Government. by issuing It's
notes directly our Government obtained and
still retains four hundred million dollars at no
greater cost than the expense of paper and
Drintirg. BY borrowing of the Bank of France
the expense of engraving, printing and paper
WAS thrown on the Bank, and the rate Of
interest paid by the Government, which Is
only one per cent per annum, Is not much
more than sufficient to enable the Bank to pay
the necessary expenses connected with the issue.
During the last twelve months the French
Government has been paying Oft its indebted
ness to the Bank, or rather changing the form
of the debt from nOn-interest- bearing notes to
five per cent rentes. The amount repaid by the
Government to the Bank since October, 1873,
when the last installment of the indemnity
was paid over to Germany, is ninety-fiye MIL
lion dollars, which exactly corresponds to the
amount of bank notes withdrawn from clrcu-
lotion. The accumulation of specie in the
Rank is movement precisely OF the same
character as the accumulation of legal tender
notes in the banks of NewYOrk. Money in
such dull times as these piles up in banks be-
cause there is not sufficient employment for it
in the commercial world. The discounts of
the BANK Oh TIduCt, ITO pi"iAShSft
are one hundred million dollars less than they
were a year ago, being decrease of more
than one-third. Money for which there is no
employment might as well not exist. The only
effect of retiring and destroying few millions
of unemployed greenbacks, and issuing
bonds in exchange for them, would be to give
the owners of the greenbacks good invest
ment in exchange for dead money, and to re-