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. Tho 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; nor can it bo 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 more
than $200,000,000. Now the circulation of the National
Bank notes, and those known as legal tenders, is nearly
$700,000,000. While it is t.rged by some that this
amount should be increased, others contend that a de-
cided reduction is absolutely essential' to the b.st 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 convertiLls
currency. For this purpose let us inquire how much gold
and silver could be purchased by the $700,000,000 of paper
money now in circulation. Probably not 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 fact makes it the obvious duty of the Government, 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 a resultso desirable
is demanded by 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 paper
currency. The sages of that period were anxious to pro-
tect their posterity from the evils which they themselves
had experienced. hence, in providing a circulating me-

dium, they conferred upo❑ Ceugross the power to coin
money uud regulate the value thereof, at the same time pro-

hibiting the Btates from ma king anything bu t gold and silt, r
tender in payment of debts. The anomalous condition of
our currency is in striking contrast with that which was

originally designed. Our circulation now club aces, first,
the notes of the National Banks, which are made receiv-

able fur all Cues to Government, excluding imports, and by

all its creditors, excepting in payinent of interest upon its
boudsand 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;

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and third, gold and silver coin, By the operation of our
preseLt system of lluatwe, however, the metallic currency
when collected is reserved only for one class of Govern•
ment creditors, who, holding its bonds semi-annually, re.

. .
ceivo their interest in coin from the national Treasury.

They are thus made to occupy an invidious position, which

maybe used to strengthen the arguments of those who
would bring into disrepute the obligations of the nation