.jpg)
The Pamphlet Collection of Sir Robert Stout: Volume 73
Objections
Objections.
| 1. | The notes are inconvertible into gold. What is meant? Just think. The objection is as unsubstantial (or, if you like, not so substantial) as Mrs Mellon's Cissy, or as Madame Blavatsky's astral body. It is at the most but grasping at a shadow in mistake for the real thing. Every note advanced represents property, the real wealth, and as long as it does so it can procure for you whatever real commodity you desire, including gold. No money can do more. What more do you want? |
| 2. | The notes will be issued in too great quantity. That is tantamount to saying that the owner of property will squander his property. I do not think New Zealand colonists can be accused generally of that kind of thing, but there is no saying—we might all go mad. The sensible view to take of this question is that every note out of the Bank not required for some legitimate purpose would quickly find its way back to the Bank to keep down the overdraft. But, suppose for a moment that a customer ventured on a bit of wild speculation, or tried his hand at some "corner," and began drawing heavily, unusually heavily, on his account, and out of the ordinary course of his business, the Bank Manager, or Bank Inspector, be sure, would be keeping an eye upon him, and would at the proper time probably give him a gentle hint to stick to his own proper business. That would be enough, and our friend would have recovered his sober senses. Anyway, if he should not do so, he would have to take the consequences, present or future. |
| 3. | We cannot pay our foreign creditors in such notes. Well, there is no need to. We can pay, as we do now, in products, including gold got in the colony. We always export more than covers all claims upon us, although by possibility it might happen that if the contraction of the gold currency were carried too far, and prices reduced to the minimum point, we might not be able to pay our way. Bankruptcy or repudiation might in that case be the alternative. But, conscienceless as the gold-bears are, they don't find it pay to squeeze beyond the point of endurance. A mere dividend, or a forced taking possession, are neither of them satisfactory; and the latter especially, done on a large scale, might not only be unprofitable but troublesome and even dangerous. But we can buy up all our gold production at market price, and pay for it in State notes, as the Banks now do in their own notes. And that million or so of gold could be kept in reserve to meet the demands of the foreign creditor should the balance be against this country at any time. |
| 4. |
Then the assignats of the
page 16 As to the greenbacks, they would have proved the best currency the United States could have had but for the unprincipled action of the Senate. The House of Representatives passed the Bill declaring them to be legal tender for debts and taxes, and redeemable in Treasury Bonds bearing 6 per cent, interest; but the Senate inserted two exceptions, and insisted on them: the one that greenbacks should not be legal tender for payment of import duties, and the other that they should not be legal tender for payment of interest on Treasury Bonds. The Executive was in the most urgent need for money for war purposes, and the minority in the [unclear: Senat] and the House of Representative had reluctantly to accept the amendments or let the country go without money. They acquiesced under protest. The majority of the [unclear: Senat] prostituted their public position for private gain; they made their country's necessity their opportunity and this transaction will for even remain as a blot on the honor of the United States Senate. It was filled with speculators and persons [unclear: wh] saw how they could gain by the depreciation of the greenback. They money-holders and money-brokers took full advantage of their opportunities, and of course at once began to manipulate gold at the expense of the greenbacks. The two exceptions enabled them to do that, and steadily the greenback fell in value to one-third of its face value. The greenback was redeemable in Treasury Bonds, but the minimum limit was 50 dollars. The mass of the people who had to take greenback currency in payment, almost never had 50 dollars at a time; and, besides, could not take them, it they had them, to New York for redemption. So the greenbacks were got hold of by the speculators in huge quantities, and they were converted into Treasury Bonds for full face value bearing 6 per cent, interest. Thus the people were robbed by law, doubly robbed—first in the depreciation of the greenback, and second in having to pay 6 per cent, interest (in Treasury Bonds) on the full face value of the greenbacks. It was a most dishonorable business, and a crime against the State on the part of the Senate. There must be no such exceptions,
page 17 |
| 5. | 5. But, says some one, is there to be no more money-lending by private persons? That does not at all follow, although, frankly, I say the less the better of such money-lending. Suppose that A borrows £500 from the Bank against security given, and by industry for some years he has been able not only to repay his loan and interest, but to have accumulated a substantial sum to the credit of his account at the Bank—is he to lend that out to Band get interest for it? Certainly; why not? A of course will have to lend on easier terms than the Bank—say at 4 per cent.—else B will not borrow; and A will equally, of course, take care that the security given is a first security. That would always be the ordinary case; but let us suppose that A, out of friendly feeling, is prepared to lend to B on second mortgage (B having already a first mortgage to the Bank) there is nothing to prevent A doing so. |
