I 
 
 DISCUSSION ON FINANCE. 
 
 4 
 
 « ~- 
 
 GREENBACKS A LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE, 
 EXCEPTING ONLY, INTEREST? ON THE PUBLIC DEBT 
 AND DUTIES ON IMPORTS. 
 
 NATIONAL BANK NOTES A LEGAL TENDER IN PAYMENTS TO AND FROM THE 
 GOVERNMENT FOR ALL DEMANDS, EXCEPTING ONLY, IN¬ 
 TEREST ON THE PUBLIC DEBT AND DUTIES ON IMPORTS. 
 
 READ TUTS LAW! 
 
 * 
 
<=,. 1 ^ . 
 
 • “IX <o Z \ 
 
 P m 
 
DISCUSSION OU FINANCE 
 
 From THE HEW YORK MERCANTILE JOURNAL of Sept 23.—In continuation. 
 
 ♦ 
 
 Scene:— Editorial Rodins of The New York Mercantile Journal, Sept. 4, 1869. 
 
 * * * I hope you will not be offended if I talk 
 
 ■R '—Let me make an inquiry just here, plainly, even should it cut rather close. 
 
 Do I understand you correctly in this mat- R.— Proceed. I trust that I am quite 
 ter ? I infer that you desire an issue by the prepared for all that you may have to say. 
 Government of legal tender paper money, I have no fears that you will disturb me, 
 which shall be used in paying duties, and provided that you confine yourself to a plain 
 also for redeeming the Government bonds, statement of facts. 
 
 G-—I intended that you should under- O. —I shall rely upon the law. of the land 
 
 stand that we advocate the demonetizing of to back up my statements. Mark what I 
 gold and silver. Those metals are mere ar- say, the law. Is that good authority ? 
 tides of merchandise, and should be so con- R ,—Certainly ; we must obey the laws ; 
 
 sidered. Hence, working under our plan, therefore, it is perfect authority. But what 
 we would have no other currency except do you intend proving by such reference ? 
 that based upon the pledge of the entire na- G. —Nothing less than that you r and such 
 
 tional wealth ; it would, therefore, necessarily as you who clamor for the payment of the 
 be used, as we have often stated, emphati- 5.20’s and other bonds of the Government, 
 cally, for all purposes. as they stand to-day, in gold, while the 
 
 R -—To me this sounds like the doctrine greenbacks remain as now—partial dollars 
 of repudiators. I hope that you do not de- only—with no provision for their redemp- 
 sire to have the national debt repudiated. tion, are the worst of repudiators. You 
 —What have I said at this time, or have the hardihood to repudiate the green- 
 whathave you ever read in The Mercantile backs, which are the most sacred obligations 
 Journal that would lead you to think, for a of the Government—its forced loan ; while 
 single moment, that we desire to see the myself, and others of like faith, aj*e en- 
 nation so terribly disgraced ? I am pleased, deavoring to obtain a fair recognition of the 
 however, that you made the suggestion, for rights of the people under the laws, not as 
 it gives me a fine opportunity to talk to you we would like to have them, but as they 
 a little more pointedly than I had intended, stand on the statute books to-day. Like the 
 
4 DISCUSSION 
 
 Pharisees of old, you strain at a gnat, but 
 swallow a camel. 
 
 R. —This is rather pointed. Why do you 
 call me a repudiator ? Are you in earnest ? 
 
 G. —I call you a repudiator simply be¬ 
 cause I know of no word which would better 
 express my meaning. I am most positively 
 in earnest. 
 
 JR. —I cannot understand how you should 
 come to such a conclusion. I fear that I do 
 not fully get the idea you mean to convey. 
 
 G. —I will repeat it,then. X say that Sec¬ 
 retary Boutwell, and all those who uphold 
 him in his policy of buying 5.20 bonds at a 
 'premium of twenty per cent., making pay¬ 
 ment in greenbacks, are repudiators. Please 
 remember that I do not say that they all are 
 aware of the fact. It is probably only ig¬ 
 norance on Mr. Boutwell’s part; and others 
 have been led to believe it all right, because 
 they have not given the matter a serious 
 thought. It would be unkind to insinuate 
 that the Secretary of the Treasury has not 
 given the matter special consideration. 
 
 JR. —The law authorizes Mr. Boutwell to 
 make purchases of bonds. 
 
 G .—You cannot show me any law which 
 gives such authority. 
 
 R .—I think I can satisfy you that you are 
 mistaken. 
 
 G. —I would prefer that you save yourself 
 that useless labor. Mr. Boutwell himself 
 knows better. 
 
 R. —Why do you say that ? 
 
 G. —Simply because it is a fact of which 
 we have abundant evidence. The bonds 
 purchased are being held by him subject to 
 the order of Congress. 
 
 R .—Well, what would you have done un¬ 
 der the circumstances, if you had been at 
 the head of the Treasury department ? You 
 know the money market was exceedingly 
 stringent just before the purchase of bonds 
 was commenced. The rate of interest on 
 Wall street was reported as high as f of one 
 per cent, a day, or the enormous rate of two 
 hundred and seventy-four per cent, per an¬ 
 num, which would reach a sum several times 
 
 ON FINANCE. 
 
 the amount of the principal, if paid every 
 day, for one year ; in fact there was a panic 
 among the stock operators and money lend¬ 
 ers. 
 
 G. —In replying to your question, I desire 
 to remind you, first, that the great stringency 
 in the currency market was occasioned prin¬ 
 cipally by the heavy sales of government 
 gold, made by order of Mr. Boutwell, and 
 the hoarding of the legal, tender notes re¬ 
 ceived therefor. * That was the origin of the 
 difficulty. To have corrected that difficulty 
 after it was brought about, I should have 
 offered to pay those 5.20 bonds, upon which 
 the 5 year option had expired, in legal ten¬ 
 der notes, dollar for dollar, accrued interest 
 of course additional. 
 
 R. —That would not have answered. 
 Those bonds are, by law, made payable in 
 gold. Nobody would have accepted your 
 offer. 
 
 G. —We differ on the point of law, very 
 materially, I notice. As I have the law at 
 hand, let me read Section One, of the Act of 
 July II, 1862,/which you will observe is a 
 portion of the bill under which the legal 
 tender notes were issued. It is very plain 
 indeed : 
 
 Section 1. Be it enacted by the Senate and 
 House of Representatives of the United States 
 of America in Congress assembled, That the 
 Secretary of the Treasury is hereby author¬ 
 ized to issue, in addition to the amounts 
 heretofore authorized, on the credit of the 
 United States, one hundred and fifty millions 
 of dollars of United States notes, not bear¬ 
 ing interest, payable to bearer at the trea¬ 
 sury of the United States, and of such de¬ 
 nominations as he may deem expedient : 
 Provided , That no note shall be issued for 
 the fractional part of a dollar, and not 
 more than thirty-five millions shall be of 
 lower denominations than five dollars; 
 and such notes shall be receivable in pay¬ 
 ment of all loans made tp the United States, 
 and of all taxes, internal duties, excises, 
 debts, and demands of every kind due to 
 the United States, except duties on imports 
 and interest, and of all claims and demands 
 against the United States, except for mterest 
 upon bonds, notes. and certificates of debt or 
 deposit , and shall also be lawful money and 
 a legal tender in payment of all debts, publio 
 
DISCUSSION ON FINANCE, 
 
 5 
 
 and private, 'within the United States, except 
 duties on imports and interest, as aforesaid. 
 And any holder of said United States notes 
 depositing lany sum not less than fifty dol¬ 
 lars, or some multiple of fifty dollars, with 
 the Treasurer of the United States, or either 
 of the assistant treasurers, shall receive 
 in exchange therefor duplicate certificates 
 of deposit, one of whicl} may be transmitted 
 to the Secretary of the Treasury, who shall 
 thereupon issue to the holder an equal 
 amount of bonds of the United States, 
 coupon or registered, as may by said holder 
 be desired, bearing interest at the rate of 
 six per centum per anuum, payable semi¬ 
 annually, and redeemable at the pleasure 
 of the United States after five years, and 
 payable twenty years from the date thereof : 
 Provided , however, That any notes issued 
 under this act may be paid in coin, instead 
 of being received in exchange for certificates 
 of deposit, as above specified, at the direc¬ 
 tion of the Secretary of the Treasury. * * * 
 
 R .—But that law was passed in 1862. 
 Congress, at its last session, passed a bill 
 which was intended to strengthen the Na¬ 
 tional credit. The latter bill, being subsequent 
 to the legal tender act, takes precedent. It 
 states plainly that the 5.20 bonds shall be 
 paid in gold. What have you to say in re¬ 
 ply to that ? 
 
 G. —That bill is not worthy of mention. 
 There is really nothing in it. I might, with 
 propriety, say that it is merely a conglomer¬ 
 ation of words* calculated to deceive the 
 stupid—only. Notwithstanding that the 
 bill declares that the 5.20 bonds shall be 
 paid in coin, still it has no force, for the 
 reason that it futther declares that the bonds 
 shall not he paid at all , until greenbacks are 
 made equal with gold. I claim that is really 
 the same thing as stating that the bonds are 
 payable in legal tender notes, or their equiv¬ 
 alent. It is an axiom, that things that are 
 equal to the same thing, are equal to each 
 other. Furthermore, I boldly declare that 
 the last Congress had no right to meddle 
 with this matter of payment of the bonds. 
 The contract was previously consummated 
 between the Government and the bond hold¬ 
 ers, and that contract should be carried out 
 both in letter and spirit. 
 
 R. —As you claim that the last Congress 
 ought to have left the matter alone, pray 
 tell me who should have settled the differ¬ 
 ences of opinion that existed. 
 
 0 .—Most decidedly do I think that Con¬ 
 gress “ ought to have left the matter alone." 
 We have courts, maintained at great ex¬ 
 pense—which are supposed to dispense jus¬ 
 tice—to determine the equity of such cases. 
 Let me read for your edification, Section 
 Twenty-three, of the National Bank Act. It 
 will probably astonish you somewhat, not¬ 
 withstanding the most important portion of 
 it is printed upon the backs of all the Na¬ 
 tional Bank Notes. It is quite probable that 
 not five persons out of a hundred have ever 
 read it: 
 
 i( And be it further enacted, That after any 
 such association shall have caused its prom¬ 
 ise to pay such notes on demand to be sign¬ 
 ed by the president or vice-president and 
 cashier thereof, in such manner as to make 
 them obligatory promissory notes, payable 
 on demand, at its place of business, such as¬ 
 sociation is hereby authorized to issue and 
 circulate the same as money ; and the same 
 shall be received at par in all parts of the 
 United States, in payment of taxes, excises, 
 public lands, and all other dues to the Uni¬ 
 ted States, except for duties on imports; 
 and also for all salaries and other debts a\d 
 demands owing by the United States to individ¬ 
 uals, corporations, and associations within the 
 United States, except interest on the public debt, 
 and in redemption of the national currency. 
 And no such association shall issue post 
 notes or any other notes to circulate as 
 money than such as are authorized by thfe 
 foregoing provisions of this act." 
 
 R .—Excuse me ; but right here let me 
 make an inquiry. Do you assert that 
 with gold demonetized, government tokens ' 
 based, as you say, upon the entire national 
 wealth will retain a steady position, and be 
 a complete measure ? Is that your idea ? 
 
 G. —I claim that subh tokens will most 
 dertainly be a perfect measure—which gold 
 and silver never have been—provided that 
 the volume of those tokens shall be made 
 self-adjusting, by making them interchange¬ 
 able with bonds bearing a fixed rate of in- 
 
e 
 
 DISCUSSION ON FINANCE. 
 
 terest. Such adjustment will make their 
 value as uniform as the governor makes the 
 motion of a steam engine. 
 
 B. —A very plausible theory, undoubted¬ 
 ly, but I think defective. You argue upon 
 the idea that the paper token may be kept 
 in a steady position (as regards its purchas¬ 
 ing power) by adapting its volume to the 
 ever-changing conditions of trade, but you 
 forget one thing; i.e., it will not be possible 
 to govern^ token such as you propose by 
 the law of supply and demand alone, for it 
 is subject to an influence that gold and sil¬ 
 ver are entirely free from, namely, the de¬ 
 gree of confidence that may be felt from time 
 to time in the Government. 
 
 G .—What am I to understand by the ex¬ 
 pression “ the degree of confidence that may 
 be felt from time to time in the Govern¬ 
 ment ?” Which do you question, the ability 
 or the good faith of the Government, in 
 fulfilling its obligations ? 
 
 B. —Either case being considered a possi¬ 
 bility, what then ? 
 
 G. —The most skeptical can have no doubt 
 as to its ability to meet all obligations. And 
 as to good faith, when that becomes extinct, 
 through the corruption of the masses, we 
 shall have lost that which, mainly, makes 
 life enjoyable. 
 
 B .—You say, then, that such legal tender 
 paper money tokens, as you advocate—issued 
 by the Government—“will'most certainly be 
 perfect measures .of values—which gold and 
 silver never have been —provided that the vol¬ 
 ume of those tokens shall be made self-ad¬ 
 justing, by making them interchangeable with 
 bonds bearing interest at a fixed rate.” 
 
 G. —You evidently understand my meaning 
 fully. 
 
 B. —Allow me to inquire what is the ob¬ 
 ject of the “ Currency Reform Association,” 
 which is now forming ? 
 
 G. —In replying to this question, I cannot 
 do better than read to you the resolutions 
 which were unanimously adopted at a pri¬ 
 vate meeting of prominent merchants, bank¬ 
 
 ers, and capitalists, recently held in this city, 
 which is a full, but concise, 
 
 “ Declaration of Principles.” 
 
 Whereas, the history of the United States, 
 as well as that of every other nation, has 
 been marked by frequent money panics, in¬ 
 volving severe losses, through the derange¬ 
 ment of business and consequent embarrass¬ 
 ment to all industrial and commercial inter¬ 
 ests, causing great suffering, and materially 
 retarding the progress of national as well as 
 individual prosperity; and 
 
 Whereas, it is evident that these periodi¬ 
 cal disturbances of trade have been caused 
 by a blind subserviency to a false monetary 
 system ; a system which fails to recognize 
 the fact that all values, not excepting gold 
 and silver, are constantly changing, and are 
 estimated, from time to time, only by way 
 of comparison, and then, necessarily, in a 
 very indefinite manner ; thus making ordin¬ 
 ary business calculations of uncertain ac¬ 
 curacy and unstable character ; and 
 
 Whereas, second only in importance to the 
 joint and harmonious action of capital and 
 labor, is a properly regulated supply of 
 currency, based upon sound financial prin¬ 
 ciples, and the first requisite for business be¬ 
 ing a token recognized thoughout the land 
 as a dollar ; and 
 
 Whereas, in the interchangeability of 
 currency with government bonds bearing a 
 fixed rate of Jnierest, we recognize a subtle 
 principle that will regulate the movements of 
 Finance and Commerce, as accurately as the 
 motion of the steam engine is regulated by 
 its governor ; therefore, making such dollar 
 ' tokens , measures of values much more perfect 
 and stable than gold and silver ; and 
 
 Whereas, we believe‘that, with a sound 
 currency, many of the evils which have come 
 upon the country through strikes of laboriug 
 men, and the numerous embarrassments 
 which grow out of the uncertainties of trade, 
 may be avoided; and realizing that great 
 benefits must accrue to all, through the ad¬ 
 vantages atising from an ample supply of 
 money tokens ; Therefore, be it resolved ; 
 
 First —That it is our duty as citizens, 
 to urge upon public attention the necessity 
 for such a reform of our monetary system as 
 shall fully accord with the spirit of our free 
 institutions ; giving to the people a perfect 
 legal-tender dollar token , issued by the Gov¬ 
 ernment, and, thereby, based upon the en¬ 
 tire national wealth. 
 
 Second—That in order to absorb any 
 surplus of such amounts of these money to¬ 
 kens as may at any time exist, over and 
 
DISCUSSION ON FINANIE. 
 
 1 
 
 above the sum required to meet the legiti¬ 
 mate demands of trade ; and to inaugurate 
 a self-adjusting system, which shall he be¬ 
 yond the control of all cliques, the Govern¬ 
 ment should issue in exchange for such tokens 
 —when required by any person presenting 
 the same in sums of one thousand dollars or 
 its multiple—bonds bearing interest at the 
 rate of 3.65-100 per centum per annum ; said 
 bonds being made payable, in the perfected 
 legal-tender tokens, on demand; interest 
 payable semi-annually until the prin¬ 
 cipal is demanded, and then in full to 
 date. 
 
 Third— That we organize an Associa¬ 
 tion, having for its object the advocacy of 
 the issue of paper money by the Govern¬ 
 ment, which shall be a legal tender for all 
 purposes whatever, and also convertible at 
 the option of the holder, into bonds bear¬ 
 ing interest; said bonds being convertible, 
 on demand, into said legal tenders. 
 
 B. —If the substance of those resolutions 
 were embodied in a bill, and at the next ses¬ 
 sion of Congress it should be made law, what 
 do you think would be the result ? t 
 
 G. —I am positive that there would be an 
 immediate resumption of activity in every de¬ 
 partment of trade. The supply of money 
 would be steady, and ever after financial pan¬ 
 ics would only be known as belonging to the 
 past. The dangerous power which may now 
 be used by a small combination of “ opera¬ 
 tors” to “ corner” the gold market at their 
 pleasure, thereby affecting the money market, 
 because of its improper connection therewith, 
 and seriously deranging all business affairs, 
 could not longer exist. 
 
 B. —Do you really think that any serious 
 “ comer” could be effected, provided specie 
 payments were resumed ? 
 
 G. —Most assuredly I do. The situation, 
 even now, is very precarious, and if specie 
 payments were resumed—which, I boldly pre¬ 
 dict, never will be done in this country—the 
 situation would be ten times more hazardous 
 
 than it is at present. I have, on many occa¬ 
 sions, when in private conversation, called 
 the attention of my friends to a combination 
 which might znder such circumstances be ef¬ 
 fected amongsay only ten of our wealthiest 
 citizens, wh>jould, with specie payments re¬ 
 sumed, bring £out a financial panic which, in 
 magnitude, vmld so far exceed all that have 
 preceded, as to sink them into comparative 
 insignificance 
 
 R .—You tik extravagantly. 
 
 G. —It map so appear to you, but I believe 
 I know “wle'eof I speak.” I believe I shall 
 make you ac ait, notwithstanding your pre¬ 
 judices, thatn this matter, at least, I am 
 correct. 
 
 Strong —Getlemen, allow me tn 
 your attentia to the fact that we have 
 already had e longer interview than origi¬ 
 nally agreed fli, and as I have kept very quiet, 
 
 I think you ught to allow me a few words 
 now. I hav< some matters of business I 
 want to talk about; besides, I think it is 
 time for Mr.Rbhardson to haul off for repairs. 
 It will be necessary for him to read up 
 very sharp between this and next Saturday, 
 or jelse he won’t stand any show at all. 
 
 2.— Well, I declare, you are not very 
 complimentary, Mr. Strong. I fear that you 
 are being injured by listening to this dis¬ 
 cussion. 
 
 Strong—I hope I am not being injured 
 very seriously. I am frank to confess that 
 I now understand this financial matter 
 mych better than I did three weeks ago. 
 And what is more, I have fully made up 
 my mind that it is my duty to patronize 
 Tbe Mercantile Journal. But how is it ? 
 Do you consent to give way for my accom¬ 
 modation ? 
 
 B.— I assent to your request, of course. 
 
 This Discussion is now being published in The New York Mercantile Journal, 
 We also have the same in press, together with the various Loan Acts of the United States, 
 passed since 1860, and the National Bank Act. In one volume. Price 50 cents. Sena 
 all orders to The N. Y. Mercantile Journal Co., No 350 Pearl Street, New York. 
 
 Every business man should read these Laws with care.'^