The daily union. [volume] (Washington [D.C.]) 1845-1857, 1847-11-22
Finances.

We welcome "Theta" once more to our columns No
better understands, sSjsa which he discusses
and at time when the money market inviting the atten-
ton OF the capitalists, and indeed the community large
and the prospect OF the financial the part
OF the government is exciting much interest," few sub
jects are more important We hope that "Theta" will
redeem his promise, and continue his labors.
Treasury Notes.-No.4.
In compliance with lie ssnggesions that have been
made to us by of our readers we shall offer some
further remarks on this important subject
we have SAID that the principles OF finance which the
United States government has adopted have thus far
red safely along and that they are the only principles
which can sustain it through all the vicisstudes 10
which governments are liable in time of war.
These principles
lst revenue in gold and silver sufficient to pay or.
binary expenses and the interest the public debt
3D. Inc Issue OF treasury notes, OF large denomina-
TONS ana bearing no interest, but to greater amount
than is required in governmental transactions as substi-
tutes for private bills of exchange
3D. The issue OF treasury notes of large denominations
and bearing an adequate rate of interest.
am. Inc funding OF all such portions of the public
debt as there is not fair prospect that government will
in reasonable period, be able to redeem.
revenue in gold and silver affords far more substan-
tia basis than revenue in convertible bank paper be-
cause banks make issues to supply the wants of gov
eminent, IN addition to the wants of commerce. their
operations are so extended that they later be-
come embarrassed and them by their reflex action they
embanass the people and the government. Under the
present SYSTEM government leaves bank paper to per-
form its proper functons-that of a commercial medium
This policy so far as it tends to throw into circulation
an additional amount OF SPECIE conduces much to the
permanent interests OF the banks those of the gov
eminent and OF the people. The gold and silver which
is one day in treasury Office the next day in the
hands OF the people and the next in the vaults of
bank Increasing the amount of specie in the country
il increases the fund out OF which bank notes to be
redeemed, and thus increases the security of those ns
utions in their manifold operations II the local banks
had been used as fiscal agents since the commencement
OF the present war, the whole system of domestic ex-
changes would long since have become deranged
An adequate foundation of specie being thus laid for
both government and bank operations, treasury notes be
come more valuable, instances than silver
and gold; and SUCH their ought to be economsed
BY government with the same care that it economses
gold and silver
They more valuable because government can buy
them, and effect payments at distant points with prompt
itude which 1t could not effect with silver and gold.
They are more valuable, also, in many instances, to
the public creditor TO in the wlds of the west
an order to receive gold and silver at any of the great
centres OF trade, is OF value than gold and silver
the spot where he resides. treasury note s under
listing arrangements, equivalent to such an order.
Again; Every great dealer who receives large amounts
in one place. and dlsburses them in another, must make
use OF bills OF exchange. Government is the greatest
dealer IN the country and consequently has the greatest
use for bills OF exchange By law, it prevented from
purchasing private bills Of exchange, and by very
wise provision OF the Independent treasury act Though
one adopted from the best OF motvcs) prevented from
transferring its funds from place TO another, the
public service may require by means OF treasury drafts
Under these restrictions the of treasury notes.
governmental bills of exchange is indispensable. With
would be subject TO immense and unnecessary expense
in transporting specie from part of the country
other. The most rigid hard-money cannot if he
derstands his own principles object to bills of exchange
Such bills, whether they are the notes OF private
chants bank notes of large denominations treasury drafts
or treasury notes. do not drive specie out of circulation
They are simply orders drawn in place to receive
specie In another, and thus save the trouble and expense
of unnecessary transfers of specie from point to point
In the use which government is thus compelled to make
of treasury notes substitutes for private bills of
change, we have additional why they should
be economsed The issue of such notes, even of large
denominations and bearing interest," ought to be strict
y limited TO such amounts will government the
expense of making unnecessary transfers of specie In
deed treasury notes bearing interest would this
purpose equally we'll and answer other purposes beside
il any change Is made in the SYSTEM it should be call
ing IN all such notes as bear only nominal rate OF inter-
est.
By the use of treasury notes bearing interest," govern
ment borrows just such amounts wants. Just such
times as it wants. and pays interest only from the day
on which it borrows Under the old mode of borrowing
from the banks government used pay interest large
of its depostes in the banks Or speak with
exacness used to pay large sums for inscriptions
to its credit on the books Of the banks
The chief advantage however is, that by of the
treasury note SYSTEM government eec, large loans
without causing those banking and commercial derange
ments which inevitably follow large loans OF bank credit
After ALL however, the treasury-noe system must in
time of war, be regarded only auxiliary to the funding
system, The floating debt of no government can, with
safety be extended beyond certain amount And carry
out strictly the principles of its policy, the United States
government guards against any such by giving
The holders OF such notes inducements to fund hem-tha
is, to exchange them for certificates OF stock
No government ever had sounder principles OF financial
policy: They are such as must command the approba-
ton OF all who have money to lend.
In future numbers shall show that, by strict ad-
herence to these principles, government will be able to
borrow any amount which the public service may re-
quire; while departure from these principles will be
sure to involve government the banks, and the people
IN the most distressing endorsements.
THETA