them. The popular policy, therefore,
made the 5-20 bonds payable in greenbacks instead of coin. Of the
whole interest-bearing debt of $2,200,000,000, there were outstanding
about $1,600,000,000 of 5-20's, or securities convertible into them,
and of these $500,000,000 became redeemable in 1867. Their redemption
in gold, worth from 132 to 150, it was argued, would not only be a
discrimination in favour of the rich, but a foolish act of generosity,
since the law authorising the bonds stipulated that the interest
should be paid in "coin" and the principal in "dollars." As greenbacks
were lawful money they were also "dollars" within the meaning of the
legal tender act, and although an inflation of the currency, made
necessary by the redemption of bonds, might increase the price of gold
and thus amount to practical repudiation, it would in nowise modify
the law making the bonds payable in paper "dollars." This was known as
the "Ohio idea." It was a popular scheme with debtors, real estate
owners, shopkeepers, and business men generally, who welcomed
inflation as an antidote for the Secretary of the Treasury's
contraction of the currency. Democratic politicians accepted this
policy the more readily, too, because of the attractive cry--"the same
currency for the bondholder and the ploughboy."

[Footnote 1134: The following persons were nominated: Secretary of
State, Homer A. Nelson, Dutchess; Comptroller, William F. Allen,
Oswego; Treasurer, Wheeler H. Bristol, Tioga; Attorney-General,
Marshal B. Champlain, Allegany; State Engineer, Van R. Richmond,
Wayne; Canal Commissioner, John F. Fay, Monroe; Prison Inspector,
Nicholas B. Scheu, Erie; Court of Appeals, Martin Grover, Allegany.]

There was much of this sentiment in New York. Extreme Democrats,
taught that the debt was corruptly incurred, resented the suggestion
of its payment in gold. "Bloated bondholders" became a famous
expression with them, to whom it seemed likely that the $700,000,000
of United States notes, if inflated to an amount sufficient to pay the
bonds, would ultimately force absolute repudiation. These views found
ready acceptance among delegates to the State convention, and to put
himself straight upon the record, John T. Hoffman, in his speech as
temporary chairman, boldly declared "the honour of the country pledged
to the payment of every dollar of the national debt, honestly and
fully, in the spirit as well as in the letter of the bond."[1135]

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