Newspapers / The Era (Raleigh, N.C.) / Oct. 28, 1875, edition 1 / Page 1
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S .ft u i ' s PUBLISHED EVERY THURSDAY. (SEE RATES OF. SUBSCRIPTION ON THIS PAGE.) , jefr- Job Wor executed at short do tioe arid In a stylo1 nrirarpassedhy any imiiarestabl&hmenin the State, pATKR TIIK CliMwAlj UUUAJi uF THIS PARTY. W. 31. BItOWN, Manager. Offick over the North Carolina Book store, corner of Fayetteville and Mor gan streets, first door south of the State ItlTlOADyiRTIsiNa i House. HATES OK SUBSCRIPTION: One year, - - - - JJ2 10 Six months, - - - - 1 05 Three months, - 55 cir Invariably in Advance.- Ono square, one time, ( 44 44 two times, r. : $ 1 00 1 60 2 00 t 41 three times, - ; , - VOL. V. RALEIGH, N. C, THTJHSPAY, OCTOBER 28, 1875. NO.-19. Contract .advertisements taken at proportionately low rates.. J . THE EBA. A RliPUBLICANWEEKLYNEWS- "':.-:;7vlf ni -f.vi!w TOLITICAL. THE CURRENCY. I.KTTER FROM DANIEL II. (;OODIX)Ef ESQ. Ioply to General Cliiigman. Raleioii, Oct. II, 1875. . Mv DkakSih: Your favor of the 5th instant reached Raleigh during my ab and wa not received until Satur i.v Y'ii remind me of our conver Mn in rcgarn 10 mu rising iuijkii u- A A I S 2 . ar-.- of the currency question, in wbicn I rgl tbo d"ly 01 a resumption m period ; and you ask my views of t!,.. recent suggestions and statements ,n 4.i. liy lien. Clingman. in his "In ters " with the correspondent of the y, ,v York Herald. Whatever emanates from the pen of that ntleuian-and I take it for grant ,,1 that his elaborate answers to the few l,r;tf interrogatories were carefully written out is apt to be clearly and !"..rcillv expressed. But I cannot as srt m "the truth of his facts, nor to the eorne ness of his inferences. Neither am 1 convinced of the wisdom of his Hinjireotions, as to Uo remedy for the liiiaiu ial embarrassments of the eople. But first, as to his statements of fact. He estimates the total debts, expendi tures, w ante and destruction of proper ty, cauel by the war, at eight to ten thousand millions dollars. This iu du les the lows arising from the non- employnient of millions of laborers in jrluc-tivo pursuits, and is doubtless within the mark. But ho says further that " this immense loss was not so ap parent I km -a use of tho very large issues of paj-r credit in dillerent forms which i h,K the pla-e of the property destroy e.!, and thus created the impression that tiu-re hail been little or no loss of wealth." This is mainly ti ue as it re-pwu-d tho northern States; and lie infill have added that the fact was due t. tlct enhanced value which was fixed njM.n everything, in consequence of tho abutnlance of paper money, and to the artificial stimulant arising from the production and manufacture for, and ale to the government, of the supplies an. 1 munitions of war. But I am at a l.s to dud authority for CJeneral Cling imn's statement, that " Tho country iveril wed with paper representatives of money, the whole amount of eireu U:in K'ing not less than two thousand iti.lt linn. " The oilicial Report of tho I'uite I suites Treasurer, Spinner, ought t and will be taken as the highest authority on this subject. His author ity should bo the higher with General I'lingman, for the reason that he is known to be in favor of a scheme of paper money, base I on tho credit of the country, similar to that which (Jen. C. neoiiiinends in tho 44 Interview." The Treasurer's Report for lb73 contains a U tailed statement or the 44 Currency outstanding at the closo of each fiscal year lor the last twelve years," that is to say, from June 30, ld2, to June 30, 173; and at the end of it there is an ab.stra.-t statement of tho same, which is as follows : iut- stainlmg, JtuiO 30, 1862,$! 47,725,235.00 1863, 411,223,045.00 1804, 649,094,073.70 1865, 093,913,800.25 1866, MW,K7U,825.40 1867, 536,567,523.02 44 44 1808, 444,196,262.47 1869, 391,649,559.61 44 1870, 398,430,502.48 44 44 44 1871, 397,699,652.06 1872. 399,245,363.52 1873, 401,527,363.94 This statement embraces Troasury Notes, or Lcg.il-icnderst Compound in terest notes, and other interest-bearing n tes, together with the Fractional Cur rency ; but it is exclusive of the Bank N"tes. It is manifest that the interest-1-earing notes cannot be properly styled a currency. They were in no other vnse a currency than the Bills of Ex hange, and Drafts, which serve as money in settling balances between na tions and remote sections of the same country. During the war. Foreign otiuneree was greatly impeded by the Confederate Privateers, by the loss of Hie Cotton crop, and the trade of the "titire South. This state of things is made clear by the official Reports of the Customs duties, during and since tariff the war. The verv hich war brought in a larger Revenue even du ring the war than was collected before ; but the restoration of peace was imme diate y followed by a duplication of re- pipu. Thus, from 1S62, when the rev enue from this source was forty-nine millions, it rose, year by year, to sixty nne millions, to one hundred and two, nd then fell to eighty-four millions du ring the war. Bu it bounded up again 10 one hundred aud seventy-nine riil- on in IW. d to two hundred and sixteen millions during the fiscal year which terminated June 30, 1S72. The next fiscal year, which immediately Preceded the panic, the revenue from custom fell to one hundred and eighty eight millions ; hut this was In conse- 'I IlpnAA f .1 1 . . rr 1 -"voui me reaucuon 01 uuiies. ine porutions and exportations during "vo tnu reuiicuou ui uunes. xuo im wee years were correspondingly large, a matter of course ; and they neces arily called for, and called into exist ence, an immense amount of Bills of Exchange, and Drafts. This commer cial currency naturally took the place f'f the Interest-bearing notes, and ren dered them unnecessary. They had 1 iiipri . . .1 was not oniv me universal suwuaiu 11 . ChSnge' nd-vl. the Lf Talue, buf it wLthegeneral medium Mn,e tine, to depreciate tho value of ge Legal-tenders, as they did not perish with the using, like Bills of Exchange, ...... i . uuk uiHjr were never in any proper sense of the word a part of the curren cy. When Mr. Kelley was told that his interest-bearing notes would double the currency, be very properly replied "that it would be a very difficult thing to buy a pair of chickens in the market with a fifty dollar convertible bond, or to pay your passage upon a railroad, or buy a pair of gloves with a fifty dollar, or a hundred dollar, or a thousand dol lar convertible bond ; and that as theso bonds would not be legal tender, shop keepers, conductors, persons in market. ami laboring people might refuse to re ceivo them. It is impossible that tliey should go into the currency." Yet this was precisely tho condition of the 44 Compound Interest" notes, the one year notes of 1863, the two year notes of 18G3, and the two year coupon notes of 1863, (except that they were made legal tenders,) amounting in the aggregate to 212,340,640.00 in 1SG5, and to about one hundred and eighty mil lions in 1804 and 1800. If it be 44 im possible," as Mr. Kelley says, that his Currency interest-bearing notes could 44 go into the currency," it must be equally so frr those above designated, which he as well as Mr. Spinner has, nevertheless, set down as a part of the currency in 1865. 1 1 m ust not be forgotten that the Com pound, and other interest-bearing notes abovo specified, were due, and that the government bad no alternative, consis tently with good faith, but to pa3 them. They were issued as a temporary expe dient, to avoid the necessity of inflating the paper currency, of which they could never have been a part in any proper sense ol the term. No farmer or me chanic, or private citizen ever saw one, unless his curiosity prompted him to go to a bank, or to the Treasury and in quire for them. But if they were admitted to be a part of the Currency, and if to them we add the Bank Note Currency, we should still have considerably less than one thousand millions, and therefore less than half the amount at which General Clingman who accepts the loose state ment of some Congressional or "stump" orator places it. I propose to show this to be true by putting together the 44 Currency' of the Government, as stated by Mr. Spinner, the U. S. Treas urer, and that furnished by the Banks, thus : Government and Bank Deduct interest Currency, bearing notes. 18G3. $411,233,045.00 Gov.3 3,384,000.00 1S04. 649,094,073.70 Gov. 45.2G0.501.00 Bk. Total, $694,354,577.70 $179,4io,587.50 1S05. $G9S,918.800.25 Gov. 171,321,903.00 Bk. Total r 870,240,703.25 $242,340,010.00 I860. $008,870,825.40 Gov. 280,129,558.00 Bk. Total, $S89,000,3S3.46 $181,081,614. 1867. $536,567,523.02 Gov. 293,887,941.00 Bk. Total, $S30,455,404.02 $136,309,303.00 1863. $444,196,262.47 Gov. 295,769,489.00 Bk. Total, $739,965,751.47 $ 50,40-5,354.00 1869. $391,649,558.61 Gov. 293,593,645.00 Bk. Total, $085,243,203.01 $ 3,534,921.25 1S70. $398,430,562.48 Gov. 291,798,640.00 Bk. Total, $090,229,202.48 $ 2,551,878.00 1S71. $397,699,652.00 Gov. 315,519,117.00 Bk. Total, $713,218,769.00 $ 1,110,777.50 1872. $399,245,363 52 Gov. 333,495,027.00 Bk. Total, $732,740,390.52 5 1873. $401,527,267.94 Gov. 339,081,799.00 Bk. 889,528.25 Total, $740,009,066.91 $ 727,902.50 1874. $422,000,000.00 Gov. I find no re- 333,225,298.00 Bk. turns 01 in- terest-be.iring 1 otal, $755,225,298.00 notes for 1874; and it is certain there was next to none remaining. If we deduct from General Spin ner's official report of the 44 Currency," the interest-bearing notes which, ac cording to Mr. Kelley, can never be a currency in any proper sense of theword, it will be seen that during, and imme diately subsequent to the war, there was really much less of the 44 circulat ing medium" afloat than there was in 1S73, when the panic occurred, or than there is to-day. Or, if we offset the interest-bearing notes, which the govern ment issued during the war, when the foreign and domestic commerce were in a crippled condition by the bills of exchange and drafts which immediate- rung into being with the re-ival of trade, we shall still have a large per centage of currency accommodation in favor of the present, over the period of the war. The important part played by Bills of Exchange, in the commerce of the world, is little understood by even the " " jnore intelligent classes of men,..whd are not engaged in that occupation, on in the study of the laws of trade. Sena- I tor Sherman, of Ohio, In his able speech on the subject of currency and specie payments, delivered In the United States Senate, In January of last year, presents this matter in a striking point of view, as follows : 44 Specie in former times," he remarks. ot all exchanges. Jn modern times this is greafly changed.' Specie is still tho universal standard of value, but it has cemeU t-i le ven iheusual medium of exchange. 44 In this way bills or exchange, drafts, promissory note vhefkM, "d like com mercial paper cuiiih into use, so that now, even in this ajje of paper money, it is computed that fu l !5 per cent, of all tho exchanges in commercial cities is niiJe by such promises jn pay. Only 5 per cent., or one twentieth part of the payments in New York are mads in money, and this chietlv in paper money and not in gold. If g hl were now the only legal standard of value it would not be used as a medium of exchange for 1 per cent, of the transactions of daily life. The con verietie the por tability of commercial paper sud paper money has superseded if old as a medi um of exchange, but hu Iftit at the fixed, the only true standard 0 value, by which the value 01 all mediums ot 1 exchange is tested. 44 In England, where the specio stand ard of value is jealously maintained and where no Bank ol 1-mgland note can issue beyond a prescribed limit, ex cept upon a deposit of an equal ainoun of gold, specie is not used as a medium of exchange to an amount exceeding 2 per cent, ot the aggregate payments.' In a recent letter of Ex-Senator Schurz, in refutation of the inflation theories of Wendell Phillips, he makes tho following statement which corrobo rates the above remarks of Mr. Sher man. Mr. Schurz says: 44 In the year 1873, according to clear ing house records, checks, bills of ex change, and notes passed to the amount of 33,000,000,000 (thirty-three billions) in rew 101k alone, in making purch ases and payments, and Mr. Phillips wants to put in the place ol that me dium of exchange, enecting such gigan tic transactions, his system of green backs and interconvertible bonds." It is to be remarked that this curren cv or medium 01. exenange, wnicn is used by merchants and bankers and business men in the cities, arises nat urally as it is wanted, out of the subject matter of trade and commerce, and disappears immediately when it has been used and thus ceases to be necessa ry. It perishes in the using, and unlike other forms of curroncy, it has no ten dency to be issued in excess of the de mand, and thus to create fictitious values. It thus appears from the highest offi cial sources that General Clingman has based his speculations upon an entirely mistaken view of the facts. Instead of the currency having been 44 not less than two thousand millions" at the close of the war, or at any time, during or since that period, it was never so much as nine hundred millions, including the interest-bearing notes. While if W3 deduct those notes, which can in no proper sense bo called a currency, there had never at any time previously been so much currency in the country as there was when the panic occurred in September, 1873. General Clingman's false facts, there fore, cannot in anywise explain the panic ; and its causes must be looked for in some other direction. It was elearlv not the contraction of tho currency that produced the disaster. The above table shows that so far from contracting, the currency was constant ly being expanded from and including 1869. down to the present time. The aggregate amount in the first of these years was. For 1S69, SG85.243.293.01 44 1870, 690,229,202.48 1871, 713,218,769.06 44 732,740,390.52 740,609,060.94 1S7.1 7RTx V9Ji 90 AO These figures include the remnant of interest-bearing notes that still remain ed uncancelled or unfunded in mofe per manent forms, as the preceding table shows. It could not be contraction, therefore, that caused the panic For if contraction were tho cause, it would have produced the result in 1869, when the volume of the currency was at the lowest point. The panic of 1873 can only be account ed for on the opposite theory, which has been so well and so often stated in Congress, and in the able independent press of New "York. It was caused by the superabundance of irredeemable paper money, which never had the con fidence of the public, while it stimulat ed speculation, and tempted men to run in debt beyond their power of repay ment. At such a time the tendoncy is not to go into legitimate enterprises, such as manufacturing, so much as it is to speculate in stocks or gold, and to spend money only for luxuries. At no former time was gold in the shape of jewelry, fine watches, services of plate, and the like, so common in the United States.especially in the Northern States, as it was after the issue of irredeemable paper currency, and the decline in that currency to less than half its nominal value. When gold ceased to circulate as money, there was more than ever an ostentations display of it on the person, . . 1 m l in tne iorm 01 ornament. iuis was not owing to the fact that the disuse of it as money had cheapened it as a com modity ; but it was because paper cur rency was abundant, easily obtained and little prized by the people. Con tractors with the government for the supply of the munitions of war, often at their own prices, made enormous sums of money, suddenly, and with ease. For government contracts are often like charity, twice blessed, they bless- those who give and those -who re ceive. Fortunes thus easily accumula ted were freely spent. The noureau riche, as the French say.paid high prices for their fine equipagesand ornaments; but they could afford to do so. They illustrated the homely proverb, "come lightly, go lighUy." Unfortunately, all clashes were affected more or less, by the mania for display, and theresujt; was. a decree of extravagance never r i r w n ViafVifA In (Vita r"v nnf rxr . . - never enjoy tho confidence of the pub lie for a length of time. From the day of its issue, it tends to depreciate in value, and therefore to become inade quate to the demands of trade. Its pur chasing power from day to day grows less. More of ft is required to be paid for other commodities ; and this neces sity tempts men to demand a further issue of bills. Nothing is easier than to print paper currency ; and the facil ity of thenanufacture tempts the gov ernment to gratify the popular demand. In such a condition of things, men are slow to invest their funds in manufac turing, for the reason that no one can know what price to put upon goods. I The nominal sum which is considered a fair price to-day, may be far from it, sixty or ninety days hence. Capitalists, therefore, prefer to hoard their funds, or use them in lending on mortgages, or buying mortgages, to investing in productive enterprises which would give employment to labor, and scatter blessings over the land. But the his tory of the past few years has furnish ed abundant proof that men who have more enterprise than money are not slow, in eras of inflation, to engage gov ernments, corporations, and individuals to invest their credit and their means, in the construction of railroads on the most gigantic scale, and with, it maybe flattering, but very remote prospects of remunerating dividends. Before closing this branch of the sub- ieet. I venture to make the following long citation from the annual report of the Comptroller of the Currency. Hon. John Jay Knox, which immediately A f r followed the panic. It bears date Nov. 28, 1873. lie says : "The immediate cause of the crisis is, however, more apparent. The money market had become overloaded with debt, the cost of railroad construction for five years past being estimated to have been $1,700,000,000, or about $340,- 000,000 annually ; whiledebt based upon almost every species ot property state, city, town, manufacturing corporations and mining companies, naa been sola in the market. Such bonds and stocks had been disposed of to a considerable extent in foreign markets, and so long as this continued the sale of similar se curities was stimulated, and additional amounts offered. When the sale of such securities could no longer be ef fected abroad, the bonds of railroads and other enterprises of like nature which were in process of construction were thus forced upon the home mar ket until their negotiation became al most impossible. The bankers of the citv of New York, who were burdened with the load, could not respond to the demands of their creditors, the numer ous holders of similar securities became alarmed, and the panic soon extended throuffhout the country. 44The present financial 11 nnanciai crisis may in agreatdegree.be attributed to the in- timate relations 01 tne bangs or tne city of New York with the transactions of the stock-board, more than one-fourth, and in many instances, nearly one-third of the bills receivable of the banks, since the late civil war, having consist ed of demand loans to brokers and members of the stock-board, which transactions have a tendency to impede and unsettle, instead of facilitating, the legitimate business interests ot the whole country. Previous to the war the stock-board is said to have consist ed of only one hundred and fifty mem bers, and its organic principle was a strictly commission business, under a stringent and conservative constitution and bv-laws. The close . ot the war found the membership of the stock- board increased to eleven hundred, and composed of men fiom all parts of the country, many of whom had congrega ted in Wall street, adopting for their rule of business the apt motto of Hor ace, "Make money ; make it honestly if you can ; at all events make money." Tho law of the State of New York, re stricting the operations of the stock- board, which had been retained on tne statute book since 1813, had unfortun ately, been repealed in 185S, so that its members and manipulators were en abled to increase their operations to a gigantic scale." Who can doubt that the collapso of the paper bubble was brought about by these vast expenditures in Railroad building, and by the reckless gambling in stocks ; or that they were themselves the fruits of the inflated and irredeem- able paper currency ? Yet the remedy which General Clingman-following fAnrl F. Butler, of Massachusetts. Mr. Kelley, of Peun., and Wendell Phillips, of Boston offers for the pecu niary troubles which have resulted from an irredeemable paper currency, an augmentation of its amount! It is said that 44 the hair of the dog is good for the bite ;" but it niaj- well be doubt ed if another bite of the dog would be advantageous. The specific remedy proposed by General Clingman for tho existing financial embarrassments of the coun try, U given in the following auswer to, a question of the Herald Correspond ent: CoRUtsroNDKNT What is yoAir idea, General, of the national bank ay stem? General Clingman The present na tional bank monopoly ought to be dis continued and a system of State banks, allowed to tako its place. For tenor fif teen years prior to i860 we had as good a system ol currency as we could rea sonably expect to see. 1 doubt u the community lost as much under that flan as it does under tne present one. ndeed, in addition to liabilities of in dividual losses, the present national bank organization, besides its inordin ate gains, is enabled to make so exten sive combinations among its members us to place the ' business operations of the country under its' control, and the debtor class at its' mercy. Besides re moving it, the government should, it seems to me, not -only -win specie but also furnish the paper heeded lor circu lation. . By making ' that paper receiv able for all public dues, it could doubt less keep afloat a larger vol u trie than, we now have.. To pre ven t depreciatiori that paper should be exchangeable Tor government bonds at a rate of interest not above four per cent. In the first irr- , I stance such paper should be exchanged t for the present national bank notes, paid I UUk AJi All UUUU1VU L 0. v. w c it is bound to par in specie, ana m ex - J change for interest-bearing bonds at a Man rate, until mere was outscanumg huco a volume as me wants m coin- me roe and business required, to be less ened when necessary by investment in bonds bearing a low rate of interest. It is no part of my purpose to defend the National Banks. They have the faults common to all banks, and espe cially the fault of exacting an unreason able rate of interest from borrowers. They have doubtless made great gains, unfairly, at the expense of the people ; but that they are worse in this respect than other banks, I have seen no evi dence. All banks, upon one pretext or another, disregard usury laws, and vio late their charters, by exacting more interest than the law allows. But the national banking system has some pe culiar advantages. It furnishes an ab solute'y uniform currency thronghout the United States ; and its bills can never depreciate lower than the credit of the Government, as it is expressed in the value of the Legal-tenders. In deed, the National Bank Notes are doubly guarded ; for they are not only redeemable in Legal-tenders, but their redemption is secured by a deposit with the Government of one hundred dol lars' worth of gold-bearing bonds, for ev.ery ninety dollars of notes ; and in addition to these safeguards, the Banks are required to keep on hand reserves of Legal tenders for the prompt redemp tion of their notes. The failure of a National Bank is of no sort of conse- qnence to its bill-holders ; the uovern ment beinS ultimately responsible for their circulation, and the Government in turn being fully indemnified for its responsibility by the deposit in the Treasury of ten per cent, more of its own bonds than the bank circulation amounts to. When a bank breaks, therefore, the Government immediately sequesters, or covers into the Treasury an amount of bonds equal to the Bank notes that are unaccounted .for. These are rare advantages of the National banking system ; and yet it is by no means perfect. But what I mean to say, is that Gen eral Clingman's substitute for the "Na tional Bank Monopoly," would, in my judgment, create a far more dangerous one, in the hands of the general govern ment. He, like Messrs. Kelley, Butler, Phillips, and other champions of an ir redeemable paper currency, would coa ler the whole power of manufacturing, issuing and circulating it, upon the government. His proposition is in the first place, to substitute legal ten ders for the bank notes, thus doubling, at one fell swoop, the paper currency fuQ Atinn whih the o-rw- . j . . , , , , ernment is directly and solely respon siblethough it be, in the indefinite fu ture. The present p mount of legal ten ders or greenbacks in circulation, or in the vaults of the Treasur', ready for use whenever there r&- a call for it Is $32,000,000. This of course includes the bank reserves. The over strain they make on the credit of the government is moasured by their depreciation below the value of gold. When a dollar in gold is worth one dollar and seventeen cents in currency, as is the case at pres ent, a paper dollar is worth a fraction over 85J cents in gold. Now, if the bank circulation, amounting to three hundred and fifty millions, be with- drawn, and legal tenders be substituted in their place, the effect will be to double the government's responsibility for their redemption ; so that, if the depre ciation were to co on no faster than it has done, we should have gold up, at a single bound, to $1.34 in paper; while the paper doUar would fall to a fraction under 75 cents, or to less than three- fourths of its nominal value. But it is not at all probable that the depreciation would keep to the present rate. It would acquire accelerated force, just as the velocity of a falling body is in pro portion as its weight is increased, with out an increase of bulk. Jiiverybody Knows luau me umuu .oiC 1 A 1 A. A 1 TT!i..l a. A. 1 . Py ."ou.uw. uut uie iroume is I . . 1 A Ail 4. J "O ay is nxeu mr seiueineiu, aim no interest accrues, xi a aeDi is uue from a solvent individual, the remedy is to sue, and the debt jvill be paid in the course of a few months ; but when a sovereign government is the debtor, it depends upon the honor and good faith of those who administer its affairs when payment will be made, or whether it will be made at all. It is manifest that the day of payment will be remote, in proportion to the magnitude of the debt. But General Clingman has suggested what he considers a remedy for this eviL He thinks, in the first place, that the Legal-tenders should be made re ceivable for all public dues, except the interest on the public debt. In other words, that; they should be taken for the customs duties; or tariff tax. There are two difficulties in the way of thia arrangement. In the first plate, the gold which i3 exacted and paid for tariff duties was pledged for the payment of the' interest,' and the redemption of the principal of the public debt, in the hour of' its creation. This was - they pled go given to the buyers of the bonds: In the dark hour of? the civil war, wheh the nation's life was in peril and the worhl at large would regard it as' bad laith to withdraw the pledge; And again, if Legal-tenders were to be taken in payment of the tariffduties it would become necessary for the Government to go monthly into the market, in com petition with the gold speculators, for the purchase of several millions of that article ; and it may be questioned whether the "strain thus placed upon its credit would not bo greater than that which depresses Legal-tenders in con sequence of their non-receivability for tariff duties. - At any rate, the proposi tion, being inconsistent with good faith, is inadmissible. The next , suggestiohMs to make the Government notes, or Greenbacks, "ex changeable for Government bonds, at a rate of interest not above four percent." There is a want of definiteness in thi9 proposition but it is to be inferred from the general tenor of the 44 Inter view," that General Clingman's ideas are coincident on this subject with those of Messrs. Butler, Kelley and Phillips. Mr. Butler's plan of finance was put forth as far back as 1869 ; and Mr. Kel ley, who seems to have followed Butler, has more than once elaborated the scheme, in his Congressional and 44 stump " speeches. I have before me the Congressional Kecord, containing one of his speeches on this subject in January, 1874. His plan is to make the Greenbacks interchangeable for bonds of the United States, bearing interest, payable in Greenbacks, at tho rate of $3.65 on the bundled dollars, per an num. This is one cent interest per day, per hundred dollars. The interchange is to work both ways ; so that the hold er of either form of public credit may exchange it for the other, at pleasure. As to tho limit which Mr. Kelley and it is to be presumed, Gen. Cling man. who adopts Kellev's leadinc idea would assign to the amount 4of this paper-interest paying debt, interchange able with Greenbacks, I propose to let Mr. Kelley speak for himself. In the debate in the House of Representatives, January 17, 1874, Mr. Kelley interrupt ed Mr. Burchard to say, as follows : "I wish to correct the gentleman as to misapprehension he has fallen into when he supposes I limit the amount of bonds to 400,000,000. I am nearly sixty years ot age, and somewhat broken in health, but I hope to live to see the day when no foreigner Will hold a bond of the United States, and when our whole debt will be floated at 3.65, and be in the hands of tho Ameri can people." If this plan of Mr.t Kelley should be adopted, General Clingman might wit ness, what ho imaginesyito have been in existence at the close of the war a sort of paper currency, composed of legal tenders and interesVbearina notes. amounting to abovo tli'o thousand mil- ions dollars. What .proportion of it would assume the form of legal ten ders, aud how much there would be of interest-bearing notes, Mr. Kelley fails to inform us. But it is quite certain that he expects to "float" half the na tional debt, or about twelve hundred millions of the greenbacks, at the least. The complaint now is, that the existing amount of nearly eight hund red millions of paper currency is utterly inadequate to the demands of trade ; and it may be doubted whether he would compromise on less than four or five hundred mil lions of additional greenbacks. ' With these twelve hundred millions of legal tenders upon the market, re deemable only in bonds bearing 3.C5 per cent, interest, which interest is pay able in greenbacks, it is difficult to im agine that a rational man can expect such a system of finance to succeed, or that the notes or bonds could command the public confidence. It is idle to sup pose that the common sense of the American people would for a moment tolerate such folly and ignorance, which is only equaled by the crude speculations of the unlettered ancients, who are said to h-ave believed that the earth rests on'the back, of a tortoise. But it will b-J said that tho greenbacks aro legal tenders, and that they are to be made receivable for all public dues, including duties on imports Still, the interest of the public debt, must be paid in gold, at least untU' it is all bought up, and converted into 3.435 pa per interest bonds, and the ditficulty of re-funding in this way will be great. To buy a hundred millions of, gold annu ally, with paper currency, redeemable only in paper interest bonds, may be feasible for one or two years; but It must be at a premium which would duplicate the debt in a short time. In- deed, the only practicable method of re funding the five and six per, cent, gold interest bonds into 3.65 paper, interest bonds, is to do it arbitrarily, without asking the consent of the gold bond holder. He must Lm told-tbat his op tion is to take the 3.65 paper bond at the rate' fixed by the government, or take nothing. On these terms, the exchange may be effected j but It will be nothing less than repudiation, and the conse quence will be the dishonor of the general-government in the eyes of the world. If this is not what Mr. Kelley expects, as tho issue of his scheme of fi nance, he must be singularly infatu-. ated. He cannot plead ignorance of the fate of other paper currencies, equally, but not more baseless than his own. General Clingman may ha ve in view a bond at a rate of gold interest"44 not above four per cent." - But he omits (o specify gold" Interest and from the whole tenor of his '' Interview, as well as his active sympathy with those who advocate the 3.65 paper.;lnterest bonds ; and above all, from the high commend ation of his views -wbich he-Teceived, in a private letter from Mr. Kelley him self, which has found its way into the newspapers, the Inference is fair' that they art in perfect accord as to the de tails of the scheme.- Gen. Clingman expresses great ap prehension for tho liberties of the coun- i try, founded upon tbo control Which the Government will have over! the Na tional Banks. He says: u , , General rLiyoMANTherels another great question to be considered; one which vitally affects the existence of our whole sj-stem of free government. General Jackson thought that the old United States Bank, with its capital of $35,000,000, was .a power -dangerous to popular liberty; but our present na tional banks have a capital of $350,000, -COO ten times as much as the old insti tution had.- Messrs. Clay, Webster and Calhoun dreaded a government bank and said that it was most fortunate for the country that there was an antag onism between the then government and tho United States Bank. Now wo have the immense capital of the nation al banks, closely allied with a govern ment tenfold more powerful than then existed, with nearly twenty times tho expenditure and official patronage. It has, too, at its back the power of $2,000.- 000,000 in the hands or bondholders and other creditors, who are making a com mon tight for it. This powerful com bination has, up to the present time, carried all its points and wielded tho power of the government at its will. The obviate this danger Gen. Cling man proposes to abolish the Banks, or at any rate to denationalize them. Un der the existing law, the Banks are re quired to deposit in the Treasury, a one hundred dollar United Statos gold bearing bond for' every ninoty dollars of notes they issue. It i not eauv to understand that this is a great priv ilege ; and I bolieve it is not so consid ered by bankers. They would gladly be released from the necessity of tho deposit. Neither is it obvious that thd hard condition, which the Government officers have no power to relax In fa- vor of friends, can have any tenden cy to bind the hank officers td tho fortunes of an Administration. And in fact, in the course of twelve or. thirteen, years past, no charge of sub serviency to tho party in power has ever been made against the Banks, except n a vaguo and general way ; and no stress has ever been laid 011 such charges. There are now about fifteen National Banks in North Carolina, and hear of but ono President among them who is a Republican. The govern- ment keeps its millions of money lock ed up in tho Treasury. This has been the law sinco 1840 f and thero is very little witli which to bind bank ofliceis to the fortunes of an administration. Certain banks are made temporary de- , positanes for moneys collectod, but tho amounts are never large, and! are" gen erally, paid out on treasury warrants as : fast as they come in, while the govern ment exacts security for the deposits to the extent of threo times their amount. This security consists in U. S. gold in? terest bonds, deposited in the Troasury. The law requires that only thirty-tbroo percent, of tho amount of these bonds shall be deposited with the banks by Collectors of the Revenue.1 The favored ' banks, therefore, are not placed under very great obligations to the govern ment by being mado public deposita ries. That political partiality has noth-, ing to do with tho selection of tho banks, is not probable; but I have heard no com plaint that tho power has been abused. In this State, the chief depositary of tho public money is the First National Bank of Raleigh, which has all along been owned and managed by Demo crats. . .1 ,.,., Gen. Clingman's substitute for this - c arrangement is to give to the general government the whole power of fur nishing a paper currency for tho peo ple, and he regards this as a safe and conservative arrangement. T can Im agine no scheme so well calculated to place the banks and tho people under the control of an unscrupulous admin V istration, as this would be.; The bank' 1 issues, under tbo Jaw, as modified In Jauuary last, depend upon the wants of the community and the availa ble capital of the moneyed class. Not a dollar can bo issued which is not , . first well guaranteed by a larger amount in gold-bearing bonds.' Baton General Clingman's plan tho government could issue or withhold currency reward or punish the people, at i its 1 pleasure. It could combine with the 44 balls" or the "boars," for any, speculative purpose, by which the officials might be enriched . at the expense of the best interests of so ciety. And mere'peculatioh might not bo the worst abuse to which such, a system would be liable. An ambitious" Presi dent in the White Ilouse might use It to crush out opposition; to his plans for perpetuating his power, lean Imagine 110 more potent engine of political pow er, or one better calculated to facilitate an insidious scheme of turning the Re public Into im Empire.' ' .1 1 might notice other statements In tho Interview but I fear that this letter is already .too long, and I therefore de- I am, very respectfully, ,,,, . Your ob't serv't, , j, DANIEL R. GQODLOE., Wm. S. BAX.W Esq.t - , , ' ' - ; North Carolina' . i ' 1 1 Felons. -A borie ielon is a bad . , thing, and there ' aro numcrpod so-. , 1 called remedies for it. Doubtless,; .u an application which la jBUCcessfol". 1 in one case may, from somo cause, fail In'aiibther. ' An exchange says r 2- that'll sore cure latdry rock salt, ; poundetl and mixed With .spirits of 1 turpentine. f Put tho mixture in a : i cloth, , and wrap around .the pait affected, and charigQ when it gets dry. Thfs ia'sald to kill the felon in twenty-four hours. i I t
The Era (Raleigh, N.C.)
Standardized title groups preceding, succeeding, and alternate titles together.
Oct. 28, 1875, edition 1
1
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