Burlington free press. [volume] (Burlington, Vt.) 1827-1865, 1840-04-24

|
The present measure is TO authorize the imnle-
| date issue of five millions in Treasury Notes, for
| the purpose of being paid out to persons having
| claims ON Government, or used as means OF bor-
| rowing money for the necessities of the Trea-
| sury.
do not propose TO oppose the passage OF the
bill, because think It quite clear that the money
Is needed, in order TO carry on the Governments
There are, indeed, objections to this form OF bor-
| rowing money. For 1t is a borrowing of money,
| to all intcnts and purposes. The Secretary indeed
| in a recent communication to the Senate, does not
| call il borrowing. He avoids that word, as if he
| were afraid it would burn his mouth He calls it
only Exchanging Treasury Notes for specie"
This falls under that form of statement now usual
| w called humbug. The Secretary receives money
gives for it his Treasury notes, payable a year
hence, and bearing an interest of five or six per
cent. But this, he thinks is not borrowing money;
il is only exchanging his note for money !; a sort
of exchange, believe which most borrowers are
| obliged 10 conform TO. The authority, and the
| only authority, under which he makes this mar
| velous exchange" is a section OF the law OF
| 1886, which authorizes him to borrow money!"
cannot say that think the communication of
the Secretary, to which have referred, is a very
full or clear answer to the call of the Senate. But
we learn from it, after all, what was sure must
have existed, and which it may be of some i'm
portance to show. He admits that deposites have
been made, to the credit of the Treasurer, in
| tam banks, and that there upon such banks have
received Treasury notes 10 corresponding amount.
| And the Treasurer, in a letter accompanying the
Sccretays report, says that these funds are drawn
fer as other funds and not specifically. The Sec
rotary these depo>ies special. and in spe-
Gle. All that i humbng again for all deposiles in
banks regarded as specie deposites while banks
| pay specie, and the Treasurer, as have remarked
says expressly that these sums, thus deposited, are
| drawn for, when needed, IN common with other
| funds, and not specifically or separately. This
idea, or this deuson, or this pretence for hardly
deserves respectable name, about special specie
depo>ile>, was sufficiently dsspated by the exa-
mnation, last year, into the conduct OF the barns
| connected with the New York cnstom-horse.
| When the banks pay specie, special specie de-
| po>e is nothing but a deposile in specie or It's
| equivalent and the amount is paid ont, on draft,
in specie or its equivalent. And this is the case
with all other deposltes of money, unless it be left
| in kegs or bags, and not carried into the general
account of the bank. Any one may see how this Is
| and has been, who will rccur TO the evidence OF
| the cashier of the Bank of America, on the occa
sion which have referred to. As have already
| said the Treasurer informs US that these deposes
| mixed with other funds belonging TO the United
| States in the same bank. That is to say, they all
| stand together, to his credit, on the books of the
| bank, and he draws as he has occasion, just is
| done by any other dealer with the bank. This is
the whole of it. Special specie deposte is nom
| entity.
Now, it is easy TO see that this mode of obtain
| ing money from the banks may be of very consi-
| derable profit to them. Suppose bank deposltes
| million Of dollars to the credit Of the Treasury,
| and receives therefor million of dollars in lrea-
| surg Notes, bearing an interest of six per cent.
Interest Immediately accrres to the bank, ofcourse
| on the whole OF this sum !; but 1t may be many
| months before it is all drawn ont. The Treasury
may give out its drafts slowly, and these drafts,
when made, may be sent to distant parts OF the
| country, and be some considerable time in reach
| ing the bank.-When they arrive, the bank will
generally pay IN its own notes but, beside this
advantage, it will make clear gam, because It
has been receiving interest on more money than 1t
has parted with.
Under the law of 1886, the depositc banks were
required to pay interest on Government deposites.
The present system looks very much like making
Government pay the banks interest on its own de-
poSes
There are objections, repeat, to the Use of
Treasury Notes as means OF borrowing money.
In the first place, the interest must be higher than
on a loan contracted in the common manner. The
greater part ofall the Treasury notes issued since
| 1887 have borne an interest OF SIX per cent !;
I whereas my information is, and have little donbt
of the correctness of il that United States stock,
bearing a per cent, lmcrcst, could be readily sold
at par abroad, not having any great number OF
years TO rum or it could readily be sold at home,
with view of sending it abroad.
In the next place, Treasury Notes, bearing
| high interest, and redeemable at any time upon two
months notice, issued under the present clrcum-
stance, of the country, are very likelyto absorb a
cons dcrable portion of the money now so much
needed for the relief of trade and commerce and the
revival of business. 1t strikes me that the whole
operation is likely TO make money scarcer than 1t
| is already since the Treasury is coming into the
market as borrower, Offering high interest.
Again, am aware that a use may he made OF
Treasury Notes which is quite opposed TO the splr-
it of the Constitutions that is, TO Issue them With
out interest, with a mere nominal interest, ana
10 attempt TO force them into circulation as money.
ANY such attempt ought be strenuously resisted
being neither more nor less than an attempt 10
} establish system of Government paper money
But Congress has sanctioned long ago, and I'M
der better auspices, the occasional issue OF reasu-
ry notes, and do not feel at liberty, therefore, 10
U withhold my assent on the present emergency from
| that mode Of raising the sums which the state OF
the country requires, no other mode is proposed
But the President and Secretary would seem ex-
U cessivey anxious to distinguish the issues OF
Treasury notes from the creation of a debt but
U think this distinction is without a difference A
note issued, bearing interest, and payable hereafter
0 has created debt as much any form of stool,
could create it. A national debt was actually
0 commenced at the very first session of Congress
= under the present administration, and ii never has
0 been paid except as obligation has been dis
:, charged by borrowing money ON another. Like
e other deb,ors we have renewed notes, and re-
IS newed them often, sometimes paying high interest
d but we have never eXtinguished the debt. The
first Treasury notes were issued in the autumn O
t. 1887. The amount outstanding January, 1888
d was, think, four or five millions in January
I. 1889, it was also large and in January, lSiO a,
1t have already SAID, the Secretary state it at two
| millions and three quarters.
&c One object of the present bill is TO enable tn,
J. Treasury to pay of the unpaid part of these two
millions and three quarters by borrowing again
So that is true that from the first session of Con-
gress under this Administration to The present day
Is the Government has been in debt for borrowe,
J. money, and has been, every hour, paying interes
Is for such borrowed money. This is public debt
of What tins debt may amount 10 by March, lS41,
NJ i'm
N by Congress- and on those changes and iucualion
in trade which cannot be fore.een. But if no new
s. means of revenue are supplied, aud Congress shou
ee ma Ike such appropriations, as it usually has done