The Sun.
London, England, 1866-04-19 00:00:00

AMERICAN CURRENCY.

Now that purely political matters in the United
States have come to a dead lock, owing to the di-

verse policies of different departments of the Go-
vernment, it is encouraging to find that Congress
at Washington is disposed to give some attention
to the finances of the country. There is no ques-
tion that the financial condition of the Republic is
much more favourable than the most hopeful could
have anticipated after the lapse of so brief a period
from the close of the civil war. The revenues of the
Government are considerably in excess of its cur-
rent expenditures, both gold and greenbacks are
accumulating in its various depositories, and the
real question now is, not how more money shall be
taken from the pockets of the people, but how taxa-
tion shall be abridged and its burdens made less
onerous to commerce and production.
There is not, probably, a parallel instance re-
corded in history of a nation whose credit has re-
covered so rapidly from so low a point of depression
as that of the United States. - In less than eighteen
months the market value of its bonds has more than
doubled in Europe, though it has gone on increas-
ing the supply during a large portion of the time.
Its circulating medium has also appreciated in about
the same proportion in the same time, notwith-
standing its acknowledged redundancy, and is still
approximating a gold basis. With abundant
means and resources, not only to pay the interest
on, but to speedily liquidate the principal of, every
dollar of its floating and funded debt, this improve-
ment in the financial situation must continue to
progress till gold and American public securities
stand side by side in all the markets of the world.

So far as the bonds of the United States Govern-
ment are concerned, they will take care of them-
selves, and find their level upon a plane with the
most solid investments known to capitalists. But
the management of the currency is a separate ques-
tion, and as involving the interests of the commerce
and industry of the country, requires very careful
treatment.

As a general principle, the less that is done in the
way of legislation upon this subject the better it is
for these great interests, which are always most
prosperous when values are stable and there is no
unnatural disturbance of the laws of trade. But in
the present case, with the currency and commercial
values fluctuating with every speculative movement
in gold, legislation is proposed as a means of cor-
recting these disturbances, and establishing values
upon a fixed base.
Though the volume of currency is large, it is pos-
sible that, with the domestic political relations of
the different States restored, and industry seeking
its accustomed channels, the business of the coun-
try may grow up to it, and a return to specie pay-
ments become practicable. At present, with the
heavy commercial and speculative demand for gold,
this is clearly impossible ; and how long this state
of things, involving continual suspense and hesita-
tion in all business enterprises, may continue,
without legislative interference, it is equally impos-
sible to decide.
There is, undoubtedly, a strong motive for keep-
ing the currency inflated and prices high among
those who desire to speculate in stocks and commo-
dities, and who would likewise be willing to keep
the business of the country unsettled till certain
political ends are gained. On the other hand, many
business men of large experience, including Secre-
tary M'CuLLocu and a majority of the Committee
of Ways and Means, believe that the present
volume of currency (amounting to some
$900,000,000, is liable to still further expansion by
the organisation of new national banks) is fatal to
the best interests of American industry, by keeping
its products at home while sending gold abroad,
and enabling speculators to withhold these produc,
tions even from home consumers. They claim tilt
prices are too high, not only restricting produc.
tion and consumption, but giving the foreign pro-
ducer an unfair advantage in all the markets of the
world ; that they will not come down to the nomi-
nal standard till forced down by a vigorous con-
traction of the currency ; and that the sooner the
bottom of the market is reached the better it will be
for all concerned.
This radical diversity of opinion has been deve-
loped in the discussion and action which have taken
place in Congress on what is known as the Loan
Bill. In this bill, the Secretary of the Treasury,
who moulded its principal features, sought to
obtain a large discretionaay power for the purpose
of funding the superfluous currency, and thereby
inaugurating low prices and specie payments at an
early date. His opponents declared that no such
power should be granted ; that its exercise at the
present time would be ruinous to property holders
and manufacturers, who have already hard work to
prop up the market iu the decline in gold ; and in-
sist that there should be no contraction or retire-
ment of Treasury issues, excepting the debt certi-
ficates and interest bearing notes, leaving the
$450,000,000 pure and simple legal tenders intact.
A member from Pennsylvania even went so far
in his opposition as to introduce a substitute pro-
viding that gold should not be sold by the Govern-
ment at less than 130.
But Mr. M'CuLLoCii'S Loan Bill has passed the
Lower House of Congress, and in spite of the
almost frantic speculators, gold continues to de-
cline, or, to put the case more intelligibly, Govern-
ment promises to pay continue to appreciate in
value. Gold in New York has been down to 125,