HARVARD WINS.

A very large audience assembled in Sanders Theatre last evening to hear the second debate between Harvard and Princeton. The question was: "Resolved, That Congress should take immediate steps towards the retirement of all the legal tenders." The affirmative was supported by Princeton, her representatives being Herbert Ure '96, of New Jersey, Robert McNutt McElroy '96, of Missouri, and Frederick William Loetscher '96, of Iowa. For Harvard, William S. Youngman L. S., of Pennsylvania, Joseph P. Warren '96, of Massachusetts, and Fletcher Dobyns '98, of Ohio, supported the negative.

Ex-Governor William E. Russell presided. The judges were Hon. George F. Williams, of Massachusetts, Professor A. T. Hadley, of Yale, and Professor Richmond Mayo-Smith, of Columbia.

Ex-Governor Russell's introductory remarks were received with great applause. He said that his duty was both pleasant and simple; that his position was not one of great responsibility, for he was neither to judge nor to be judged; and that he was to be the time keeper, to whom not the latitude but the longitude, of the question was entrusted. He spoke of the advantage of debating the great public questions of the day, and of hearing them debated, not with the drifting aimlessness of the politician tied to his party, but with the energy and frankness of men who have as yet no political affiliations. He then explained the question which was to be debated and the rules governing the debate. Each speaker was to have twelve minutes and five minutes for rebuttal.

The debate was opened by Herbert Ure '96, of Princeton. He began by outlining briefly the legislation which has been passed concerning the legal tender notes. At the time of the Civil War Congress provided for the issue of notes which should be accepted as legal tender. It was later ordered that $100, 000,000 in gold should be kept as a reserve fund in the treasury to meet these notes.

The speaker first argued that in issuing the legal tenders the government is assuming a banking function for which it is unfitted. Issue, being carried on by discount and deposit, is essentially a banking function. Behind the power issuing there should be an adequate reserve fund to meet all outstanding notes. There should also be some means of regulating the issue. The income of the government is fluctuating, and in consequence the reserve fund in the treasury cannot be maintained at a given level. Again the treasury has no means of regulating the credit issue to the needs of the community.

The monetary difficulties of the present were forecast by the opponents of the bill authorizing the notes. At the time of the issue, too, it was stated that these notes would be redeemed and retired as soon as the war pressure was over. They were not intended to be a permanent part of the currency, and in issuing them and thus keeping them in circulation, we are violating the wishes and nullifying the intentions of those who made the law authorizing the issue.

W. S. Youngman opened the debate for Harvard. He showed that no presumption could be raised against the negative either by history or by authority. He said that the negative did not defend flat money, but legal tenders convertible into gold. He closed by saying: "I have cited some of the most eminent authorities in favor of the government's supplying the country's minimum of paper money. I have called attention to the parallels of the uncovered notes in three of the soundest currency systems in the world. I have referred to the remarkable success of our own greenbacks up to 1890. I have shown that of all the evils that afflict our currency system today, not one is inherent in the legal tenders; for of the three causes of the present trouble, the first and second were due to an iniquitous act passed wholly in the interests of silver. And for the third and final cause, I have shown that we must not blame the legal tenders themselves, but the absurd connection of the two departments of the treasury; and that mandatory provision for endless reissue. If the redeemed notes had been held in the treasury we should have had an automatic contraction of a currency made redundant by causes originating outside of the legal tenders.

The second speaker for Princeton was R. M. McElroy '96. Reminding the audience that his colleague had already shown how the government was in no way suited to issue legal tender notes, he went on to point out various other reasons for retiring them. He said that their presence continually threaten the financial situation of the country. Confidence is the basis of all financial success. We have $1,000,000,000 of notes resting on a nominal gold reserve of $1,000,000, which may at any time sink lower. The depletion of the gold reserve takes away foreign confidence with the result of a general panic, which makes a new bond issue necessary. With such an absurd system as this, our government will never get on a sound financial basis. Legal tender notes make the gold reserve necessary, and so long as they exist the reserve must be kept up. Such a system constantly threatens the country with financial panics, as we have seen during the last three or four years. The gentleman (Youngman), advocated the retirement of a certain amount of these notes. This would only be a temporary relief. The only cure is to remove the legal tender notes entirely. By this means the danger of a deficit in the gold reserve would be forever avoided.

The second speaker for Harvard was J. P. Warren. After answering the preceding Harvard speaker he showed that all our experience points to the separation of the issue and revenue departments of the treasury, as the necessary step to make the legal tender system as successful as it was between 1879 and 1890. He asserted that this change would assimilate the convertible legal tenders completely to the position of specie, as illustrated in the matters of redundancy and stringency, elasticity and the rate of discount.

In closing, he asked the next speaker on the affirmative to find some flaw in the workings of the system proposed by the negative and to show also some way in which the convertible legal tenders differ from specie, except that they are more convenient. "Unless he does this," asked Warren, "how can he prove that all the legal tender notes should be retired?"

In opening his argument the last Princeton speaker, Frederick William Loetscher '96 said that he fully agreed with the negative speakers that the treasury notes of 1890 should be retired. But this he argued would do away with only a part of the evil.

Congress in issuing legal tender notes has given us practically flat money, the evils of which are only too well known. For fifteen years our confidence has been undermined by this constant flooding of the currency. Until the legal tender notes are retired confidence can not be restored. We must draw a sharp distinction between the functions of a bank and the true duty and business of a government.

The speaker thought that Congress should begin to retire the notes at the rate of $30,000,000 a year. With the gold which would then flow into our treasury we could pay the outstanding notes. He advocated the increased use of national bank currency. This would give us the true requisites of currency-stability and elasticity.

The speaker closed by summing up all the arguments of the affirmative.

Fletcher Dobyns followed on the negative. He said that his colleagues had already established the negative, but that their resources were not yet exhausted. After showing that there are fatal objections to the substitute which has been proposed for legal tenders and that the legal tender system possesses great, positive advantages that demand its retention, he dwelt upon the point that the principal objection that is urged against the legal tender system is without foundation.

"If the legal tenders should be retired," he asked, "would the danger of inflation be removed?" At any time the people desired they could demand a new issue of legal tender, or resort to some form of wild-cat banking, or, what is more probable, they would resort to some form of silver inflation. Twenty-five per cent, of the currency would be called into the treasury and burned, and the clamor for silver will be increased to that extent. Since the silver dollar actually possesses some intrinsic value, it furnishes a much more insidious temptation to inflation than do the legal tender. This fact it proved conclusively by recent events; for, although the demand for paper inflation has died out, only a few days ago a free coinage bill passed the United States Senate. So we see that the proposition of our opponents, while it would not remove the danger of inflation, it would direct the inflation movement into a channel a thousand times more dangerous to all the business interests of the country."

"I have shown you that there are fatal objections at the present to the issue of the entire volume of our paper currency by banks; that the legal tender system possesses the positive advantages of economy, and of relieving the strain upon the world's gold supply; and, lastly, that the central objection to this system is wholly without foundation.

The first of the six speeches in rebuttal was delivered by Ure, of Princeton.

After calling attention to several dis

(Continued on fifth page.)