The Sun.
London, England, 1869-12-27 00:00:00

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MR: BOUTIVELL'S .REPOR7

(From the Anglo American Times.)
The Treasury Report, which we publish to-day, is
the document next in importance to the PRESIDENT'S
Message. The first portion has reference to the
Department itself, the force employed, the manufac-
ture of paper, engraving and printing, and the ad
visability for increasing the salaries of underpaid
officers, more especially the appraisers, which Mr.
BO UTWE LL thinks would rather increase than de-
crease the revenue. Ile observes that these im-
portant posts do not furnish their incumbents in
some of the large cities with sufficient means for the
suitable support of a family, and that the Govern-
ment not without responsibility when it so places
its officers that they have to choose between disho-
nesty and penury. The main interest of the Re-
port. in Europe will centre in the Debt, the re-
sumption of specie payments, the funding of the
Five. Twenty Bonds, the National Revenue, and the
Banking System. Mr. BOUTWELL observes that
the currency is depreciated from two causes, an
excessive issue, and a want of faith in the Govern-
ment. To ascertain the force of the first, the full
extent of the second must be known. The amount
of currency necessary for the business of the country
cannot now be fixed accurately, but the Secretary
points to a circumstance exercising, and likely to
exercise, a considerable influence. When issued, the
currency was confined to the Northern States, but
the South_being included since the close of the war,
much has flowed into that empty reservoir. - The
Pacific Railroad is substituting paper for coin on
the Pacific Slope, and the demand is estimated at
$30,000,000. This dissemination of the currency
into new channels has the same effect as curtailing
the volume; hence the appreciation of the legal-
tenders, which are further affected, so far as the Pa-
cific States are concerned, by the transfer of the coin
there in use to the Atlantic States. This means,
when effected, more gold in New York and less
currency, almost as much so as if the Secretary
had sold $30,000,000 of gold and locked the green-
backs up, which, probably, is the main reason for
the late steady rise in greenbacks towards their par
value with gold, Mr. B 0 UTIVELL attaches great im-
portance to the development of the American com-
mercial marine as a help to specie payments; in-
deed, as it appears to us, an undue importance.
The ability to resume, as he says, will not be due
to any special legislation, but to the condition
of the industries. The ocean carrying trade, though
an important interest, is but one, aid that one
most dependent on the others, for there can be
no carrying-trade if there is nettling to c wry. The
Union presents the finest field for industry in the
world, but the oceans which lave its shores are as
open to the other countries on which they touch. If
a considerable portion of the citizens take to the sea
in preference to home industries they do no more
than the English, the French, or the Chinese can
do; hence, except under special privileges, which in
the ocean carrying-trade cannot be accorded, au
American citizen abandons the blessings PROVIDENC
has given in the more productive industries, to com-
pete with foreigners not so fortunately placed in
their home advantages. In a word, Mr. BOUT-
WELL proposeS to legislate men from a more profit-
able into a less profitable pursuit. There may be
special reasons, such as the necessity for trained
sailors in the event of war, to which we will refer
hereafter; but we may here observe that science is
superseding seamen, and the war vessels of the future
will need gunners, engineers, and stokers only. When
the exports are as valuable as the imports, specie
to equalise the exchange will not be needed, except
when the Bonds held abroad are sent home for sale.
This contingency evidently weighs on the mind of
the Secretary. What he says is that Five-Twenties
are chiefly held by the speculative classes, American
credit not yet having been fully established in
Europe. These would be ready t.) sell freely whet,
sufficient inducement offers; or on political or
financial disturbances causing a demand for money.
He estimates that from seven to nine hundred
millions dollars of bonds are in European hands,
and in the event of such a panic as that of 1866
the amount returned to America for sale would
embarrass business if specie payments had been re-
sumed, and force the Banks to suspend. Hence
the necessity for first funding the Five-Twenties
upon terms and conditions which would make them
permanent investments. Resumption, in itself, is
not difficult, but the problem is to effect it so'that

it will withstand periods of excitement and peril.
Every measure should have a tendency to raise the
value of greenbacks, and for this purpose the Sec-
retary suggests a gradual withdrawal of currency,
the amount not to exceed $2,000,000 in any one
month. This, with the other causes at work, must
tend to equalise greenbacks with gold, when the
resumption could be effected without any disturb-
ance. Mr. BOUTWELL gives a powerful reason
why the States should not be permitted to tax the
Bonds of the United States. The amount imposed
by the local authorities will be added to the inte-
rest the Federal Government has to pay, whereby
the National Exchequer will be taxed by the local
authorities to supply them with funds. Another
reason is that the ability to borrow, under certain
circumstances essential to the existence of the Go-
vernment, should not be qualified by any concession
to the States of the right to tax its means, a course
practically an infringement of its sovereignty, which
the National Government should never surrender
or qualify. These are the points in the Secretary's
Report which will most strike our readers, as many
of the other propositions are already known, but
there remains a bold and remarkable statement on
the Banking System. From it two evils arise requir-
ing prompt and efficient remedy by legislation ;
first the bank practice of allowing interest on de-
posits, the effect being thatthe moneys of individuals
go into the banks, instead of being loaned into
regular mercantile and other pursuits, under the
idea that if the security be not better repayment at
least can be procured at once. Country banks hav-
ing received the deposits, tratisfer them to town
banks at a slight increase of interest over that they
pay, still on call. Eventually the accumulation is
piled up in such centres as New York, where the
money is lent, not to merchants who will not bor-
row large sums on demand, but to speculators.
Thereby two evils are fostered ; the already too rapid

depletion of remote districts with a consequent ple-
thora in great centres, and gambling, for as it must

be loaned on call, the mercantile community is barred '
the use ; hence it can only be employed in large
sums by speculators on margins of Government and
other Securities. That it is so used, is shown by
these facts. Upon commercial paper for legitimate
purposes the borrowers pay three to six per cent.
additional interest per annum over the borrowers
for speculative purposes, while in October, 1868,
41 per cent. were call loans, and in October, 1869,
37 per cent. The remedy Mr. BOUTIVELL considers
to be the passage of a law prohibiting, absolutely, ,
the payment of interest by banks upon deposits,
limiting also their loans upon collaterals to an
amount not exceeding 10 per cent. of their capital.
The practice of certifying cheques being fraught with '
evil, ought, he thinks, to be entirely prohibited.
In England we know such recommendations will
find but few advocates. The evils are glaring,
the had results so evident that they are seen and
felt by all, but there is au inveterate British dislike
on principle to interfere with. the free course of
commercial affairs. The assertion is that the lenders
and borrowers are not only
the best judges of the
terms, hut those alone capable of framing the
conditions, and that any attempt to interfere will
be by them defeated. Mr. BOUTWELL desires Con-
gress to specify the conditions upon which a citizen
is to lend, and upon which the banks are to receive,
but such conditions have never been observed in
their integrity, an probably never will be, for
they can always be easily defeated, although pater-
nal Governments have often made the attempt thus
11 to direct the action. of the governed.