State Convention—Interconvertible Notes. 217 
rate of interest. There would be no need of exchanging or modi¬ 
fying the present issue of greenbacks in any way. 
The government has only to announce its readiness to take our 
money at all times and pay us 1 cent a day on each §100. so long 
as we want to leave it, and the scheme is in complete working order. 
Why the public has at all times had the privilege of putting its 
money into United States bonds, which, even at the highest rate of 
premium, would pay a better gold rate than is proposed. Thou¬ 
sands of trusted and solvent institutions throughout the country 
have stood ready to pay four per cent, interest for money on call. 
The plan under consideration offers no new inducements, save possi¬ 
bly a slightly increased facility. That is all there is of it. Is it 
not an exceeding small goose for so big a boo? And yet there are 
those who sincerely believe that this unimportant privilege 
would put an effectual check on over-issue, and appreciate our 
paper money until it should be better than gold. Could human 
credulity go further? The class of men that would ever, under any 
circumstances, be able to avail themselves of it would be very small. 
Men of large, ready means would doubtless allow the government 
to protect them from loss during the temporary lulls that occur in 
business. The banks would hold their legal reserves in intercon¬ 
vertible bonds, instead of keeping unproductive greenbacks in their 
safes, as they are now obliged to; but the great mass of the com¬ 
munity have not, nor are the} 7 likely to have money to loan on call. 
As a check upon over-issue, the controlling influence of this plan 
woule be absolutely nil so long as the current rate of interest ex¬ 
ceeded .03.65 per cent., which it is very certain to do, for a long 
time to come, in spite of all the usuiy laws that can be spread upon 
our statute books. In countries where money is far more plentiful 
and cheap than with us, 8, 9, and 10 per cent, is found to be insuf¬ 
ficient to control the demands of eager borrowers in times of spec¬ 
ulative excitement; and at such times—that is to say, when con¬ 
trol is most needed, the interconvertibility plan would be powerless. 
Was expansion ever known to lower the rate of interest? Those 
who favor it do so on the ground that it will stimulate business and 
make the various industries more profitable, and it is the degree of 
profit with which money can be used, and not its quantity that regu¬ 
lates its price. 
What is the course of events when an expansion takes place? 
