The Sun.
London, England, 1867-12-19 00:00:00

FINANCIAL MATTERS.

The present condition of our finances and circulating
medium is one to which your early consideration is in-
vited. The proportion which the currency of .any country
should bear to the whole value of the annual produce cir-
culated by its means is a question upon which political
economists have not agreed; ncr can it be controlled by
legislation, but must be left to those irrevocable laws
which everywhere regulate commerce and trade. The
circulating medium will ever irresistibly flow to those
pcints where it is in the greatest demand. The law of
demand and supply is as unerring as that which regulates
the tides of ocean; and, indeed, the currency, like the
tides, has its ebbs and flows throughout the commercial
world. At the beginning of the rebellion the bank-note
circulation of the country amounted to not much mere
than $200,000,000. Now the circulation of tie) National
Bank- notes, and those known as legal tenders, is nearly
$700,000,000. While it is krged by some that this
amount should be increased, others contend that a de-
cided reduction is absolutely essential to the best in-
terests of the country. In view of these diverse opinions,
it may be well to ascertain the real value of our paper
issues, when compared with a metallic or convertible
currency. For this purpose let us inquire how much gold
and silver could be purchased by the $700,000,0)0 of paper
money now in circulation. Probably hot more than half
the amount of the latter, showing that when our paper
currency is compared with gold and silver, its com-
mercial value is compressed into $350,000,000. This strik-
ing feet makes it t'ae obvious duty of the Govertiment, as
early as may be consistent with the principles of sound
political economy, to take such measures as will enable the
holders of its notes and those of the national banks to con-
, vert them without loss into specie or its equivalent. A re-
duction of our paper circulating medium need not neces-
sarily follow. This, however, would depend upon the law
of demand and supply ; though it should be borne iu mind
that, by making legal tender and bank notes convertible
into coin or its equivalent, their present specie value in the
hands of their holders would be enhanced 100 per cent.
Legislation for the accomplishment of tt rrsultso desire.blo
is demanded l.y the higheSt public considerations. The
constitution contemplates that the circulating medium of
the country shall be uniform in quality and value. At the
time of the formation of that instrument the country had
just emerged from the war of the revolution, and was suf-
fering from the effects of a redundant and worthless piper
currency. The sages of that period were anxious to pro-
tect their posterity from the evils which they themselves
had experienced. Hence, iu providing a circulating me-
dium, they conferred upon Congress the power to coin
money and regulate the value thereof, at the same time pro-
hibiting the States from making anything but gold am!
tender in payment of debts. The anomalous condition of
our currency is in striking contrast with that which was
originally designed. Our circulation now crab aces, first,
the notes of the National Banks, which are made receiv-
able for all dues to Government, excluding imports, and by
all its creditors, excepting in payment of interest upon its
bonds and securities themselves; second, legal tender notes,
issued by the United States, and which , the law requires
shall be received as well in payment of all debts between
citizens, as of all Government dues, excepting imports ;
and third, g4ll and silver coin. By the operation of our
present system of finance, however, the metallic currency
when collected is reserved Only for ono class of Govern-
ment creditorr, who, holding its bonds semi-annually, re-
ceive their interest in coin from the national Treasury.

They are thus made to occupy au insidious position, which.
may ho used to strengthen the tii'guments of Ow* who
would bring into disrepute the obligations of ihrilation

In payment of all its debts the plighted faith of the Go-
vernment should be inviolably maintained ; but while it
acts with fidelity toward the bondholder who loaned his
money that the integrity of the Union might be preserved,
it should at the same time observegood faith with the great
masses of the people, who, having rescued the Union from
the perils of rebellion, now bear the burdens of taxation that
Government may be able to fulfil its engagements. There
is no reason which will be accepted as satisfactory by
the people, why those who defend us on land and pro-
tect us on the sea, the pensioners upon the gratitude of
the nation, bearing scars and wounds received while in
its service; the public servants in various Departments of
the Government ; the farmers who supplied the soldiers of
the army and sailors of the navy : the artisans who toil in
the nation's workshops, or the mechanics and labourers
who build its edifices and construct its forts and vessels of
war, should, iu payment of their just and hard-earned
doss, receive depreciated piper, snide another class of
ther countrymen, no more deserving, are paid in coin of
gold and silver. Equal and exact justice requires that all
the creditors of the Government should be 1 a'd in a cur-
rency possessing a uniform value. This can only be ac-
complished by the restoration of the currency to the stan-
dard established by the constitution; and by this means
we would remove a discrimination which may, if it has not
already done so, create a prejudice that may become deep-
rooted and wide-spread, and imperil the national credit.
The feasibility of making our currency correspond with
the constitutional standard may be seen by reference to a
few facts derived from our commercial statistics. The
production of precious metals in the United States, from
1843 to 1857, inclusive, amounted to $579,000,000 ; from
lESB to 1860, inclusive, to $137,000,000; and from 1861 to
1867, inclusive, to $457,500,000—make a grand aggregate
of products since 1849 of $1,174,000,000. The amount
of specie coined from 1849 to 1857, inclusive, was
$439,000,000 ; from 1858 to 1860, inclusive, $125,000,000;
and from 1861 to 1867, inclusive, 8310,000.000 --
making a total coinage since 1849 of $874,000,000.
From 1849 to 1857, inclusive, the net exports of specie
amounted to $271,000,000; from 1858 to 1860, inclusive
to $148,000,000; and from 1861 to 1867, inclusive, to
$322,000,000 ; making an aggregate of net exports since
1849 of $741,000,000. These figures show an excess of
prAuct over net exports of $433,000,000. There are in
the Treasury $111,000,000 in coin, something more than
$40,000,000 in circulation on the tacifie coast, and a few
millions in National and other banks—in all, about
$160,000,000. This, however, taking into account the
specie in the country prior to 1819 leaves more than
$300,000,000 which have not been accounted for by ex-
portation, and therefore may yet remain in the country.
These aro important facts, and show how completely an
inferior currency will supersede a better, forcing it from
circulation among the masses, and causing it to be exported
as a mere article of trade to add to the money caplal of
foreign lands. They show the necessity of retiring our
paper money, that the return of gold and silver to the
avenues of trade may be invited, and a demand et eated which
will cause the retention at home of at least so much of the
productions of our rich and inexhaustible gold-bearing
fields as may be sufficient for the purposes of circulation.
It is unreasonable to expect a return to a sound currency so
long as tho Government, by continuing to issue irredeem-
able notes, tills the channels of circulation with depreciated
paper. Notwithstanding the coinage by our mints since
1819 of $874,000,000, the people are now strangers to
the currency which was designed for their use and
benefit, and specimens of the precious metals bear-
ing the national device aro seldom seen except when pro-
duced to gratify the interest excited by their novelty. If
depreciated paper is to be continued as the permanent cur-
rency of the country, and all our coin is to become a mere
article of traffic and speculation, to the enhancement in
price of all that is indispensable to the comfort of the
people, it would be wise economy to abolish our mints,
thus saving the nation the care and expense incident to
such establishments, and let our precious metals be ex-
ported in bullion. The time has come, however, when the
Government and national banks should be required to take
most efficient steps, and make all necessary arrangements
for a resumption of specie payments at the earliest practi-
cable period. Specie payments having been once resumed
by the Government and the banks, all notes or bills of
paper issued by either of a less denomination than 820
should by law be excluded from circulatien, so that the
people may have the benefit and convenience of a gold
and silver currency, which in all their business trans-
actions will be uniform in value at home and abroad.
Every man of property or industry, every man who de-
sires to preserve what he honestly possesses, or to obtain
what he can honestly earn, has a direct interest iu main-
taining a safe circulating medium, such a mediutn as shall
be real and substantial, not liable to vibrate with opinions,
nor subject to be blown up or blown down by the breath of
speculation, but to be made stable tied secure. A dis-
ordered currency is one of the greatest of political evils.
t undermines the virtues necessary for the support of the
social system, cud encourages propensities destructive to
its happiness. it wars against industry, frugality, and
economy, and it fosters the evil spirits of extravagance
and speculation. It has been asserted by one of our most
profound and most gifted statesmen that of all contrivances
for cheating the labouring classes of mankind none has
been more effectual than that which deludes thetli with
paper money. This is the most effectual of inventions to
fertilise the rich man's field by the sweat of the poor
man's brow. Ordinary tyranny, oppression, and excessive
taxation, these bear lightly on the happiness of the com-
munity compared with a fraudulent currency and the rob-
beries committed by depreciated paper. Our own history
has recorded for our instruction enough, and more than
enough, of the demoralising tendency, injustice, and in-
tolerable oppression on the virtuous and well-disposed of
a degraded paper currency, authorised by law, or in any
way countenanced by the Government. It is one of the
most successful devices in times of peace or war, of expan-
sions or revulsions, to accomplish the transfer of all pre-
cious metals from the great mass of the people into the
bands of the few, where they are hoarded in secret places,
or deposited in strong boxes under bolts and bars, while
the people are left to endure all the inconvenience and
sacrifice, and demoralisation resulting from the use of de-
preciated and worthless paper money.
The condition of our finances and the operations of our
revenue system are set forth and fully explained in the
able and instructive report of the Secretary of the Trea-
sury. On the 30th June, 1866, the public debt amounted
to $2,783,425,879 ; on the 30th of June last it was
$2,692,199,215, showing a reduction during the fiscal year
of $91,226,664. During the fiscal year ending June 30,
1867, the receipts were $490,634,010, and expenditure,
$316,729,129, leaving an available surplus of $143,901,880.
It is estimated that the receipts for the fiscal year ending
Juno 30, 1868, will be $417,161,928, and that the expen-
ditures will reach the sum 0f!5393,269,226, leaving in the
Treasury a surplus of $23,892,702. For the fiscal year
ending June 30, 1869, it is estimated that the receipts will
amount to $381,000,000, and that the expenditure will bo
$372,000,000, showing an excess of $9,000,000 in favour
of the Government.