Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1848-02-25

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cussrs the questions Of finance connected
with the Mexican War. Il is apparent that
Mr. G. has given these questions a very care.
ful consideration, with mind, notwith-
standing his advanced age in, its full yigor,
and'with the advantages Of his grea; expe-
Renee in matters Of this nature. His re-
Elections therefore are of grea, value, and
entitled to the most careful attention:
In the present case, the terms Of the loan
will in great degree depend on the opinion
which the money lenders may entertain re-
speeding the probability OF another, or a
series Of other loans. Most of those who
subscribe 10 a loan, expect TO sell it with
profit, and are therefore apprehensise OF the
effect produced on the market, by new is.
sues Of stock, which must necessarily de-
preciaie its value. Were il not for that ap-
prehenson, it is probable that loan in six
per cent stock might be obtained at price
very little below par
Whatever the rate Of interest or the price
Of the stock issued may be, ! am clearly of
opinion that a simple and direct loan, for
which nothing but stock shall be issued, is
the most eligible mode of borrowing.
Whether this will be effected by giving
six per cent. stock at less price than its
nominal value, or by giving stock bearing
higher interest than six per cent at par,
will depend in some degree on the opinions
Of the money lenders. All other things
being equal, although was, from particular
circumstances, compelled during the last
/ =. \ IL. al
latter mode 10 be preferable.
In arranging the terms, it must always be
recollected that there is an important differ
ence between Great Britain and the United
States. Entertaining no expectation Of
ever re-imbursing the capital, the sole OBJ
ject Of the British Chancellor Of the Ex-
chequer is, to obtain the money at the low
est possible rate of interest We must new
er lose sight, in the United States, of the
fundamental principle, heretofore SO con.
stantly adhered TO, that Government will
pay the capital of the debt as soon as prac.
ticable On that principle. the loans, re-
imbursable within the shortest possible
time, are always preferable IL it were
practicable, and supposing. for Instance that
both could be sold for the same price, a
seven per cent. stock redeemable within ten
years would appear to me more eligible
than one bearing six per cent interest and
redeemable in twenty years.
The preceding observations apply only
TO details; but there is an important point
to which wish to call the public attention.
Treasury Notes were first introduced BY
me; they are but n mere transcript Of the
British Exchequer Bills, and were intended
to perform the same office. At the COM
mencement Of a war, they afford a COVE
nient mode Of anticipating portion Of the
annual revenue, equal 10 the amount OF
notes which may be kept in circulation, at
par, or above par. They afford the means
Of convenient investment for short period ;
and the extent to which they may circulate
at par, depends on the demand for such in-
vestments. They are made payable at the
end of a short period, generally one year
, from their date and they bear an interest
, generally lower than that which prevails al
the time. So long as they bear those char
D acters, they never can become part OF the
8 currency. No species of paper, by whom
: soever issued, can become currency, SC
{ long as specie payments are maintained, un
Q less il can be exchanged at once for speci,
n at its nominal value. This is the characle
OF bank notes and il is wanted in thu
Q Treasury Notes, the value Of which neces
y sarily fuctua:es, according to demand AM
l. TO the rate at which money may be borrow
:. ed. If above par, no debtor will give then
q in payment of his debt; il below par, n
r creditor will accept them. II, in order I
il increase the demand, they are made recei'
4 LII IF
Ie or any other debt due TO Government, the
ID are still subject to the same general law
in If above par, they never will be used for I'll
IS purpose Of effecting such payment II b'
low par, Government will be compelled I
lie receive them in payment while, on tn
Df other hand, il is obliged TO make all its pa!
ID menls in specie, or in drafts equal IN yalu
to specie. This is precisely the state {
E. things at this moment. In order TO il
is crease their circulation, the Treasury Not,
10 have also been made convertible at any lin
into six per cent. stock, which would has
err answered good purpose, il the price oftt
he six per cent. stock could have been mai
e. tanned at par.
he There is however state Of fittings, durir
Id which the amount Of Treasury Notes mi
he be indefinitely increased, and be occasio
We ally used as currency. This takes pla
re when there is a general suspension OF spec
he payments. When this catastrophe TAX
place in England, there is at least uniforI
Iot ily of depreciation. The notes Of the Bar
al of England are substituted for specie; al
the price of all commodities, Of Pub
IN Stocks and Of Exchequer Bills, is regulaI
he by the market value OF those notes in 81