New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1848-02-05

P'ss, nj Great Britain, because, ever slhce Tue
ss~ioniag OF the 18th century perfect coi'e. ~
80 always been placed In the gooo Isun '. nc
government. and In its AFFINITY 70 pay ~
sry in those OF more recent date, the process
h.s beep regularly the same; selling tnree per
cant stock nearly at par ~ the beginning Oh tue
w.r and fnay-the value gradually decreesing
.,. vesr-at the rate OF aboat fifty per cent.
In he present case the terms Of the loan will in
c-sst degree depend on the opinion which the
,nonev lenders may entertain respecting the pros
reef Of a speedy peace, OF rather respecting the
Probability of another or series Of other loans.
Most OF those who subscribe 10 loan, expect TO sell
!. With profit and are therefore spprehensive Of
The effect produced on the market by new issues
Of stock which must necessarily depreciate its
value Were it not for that apprehension 1t is prob
able that a loan in six per cent. stock might be
obtained at a price very little below par
Whatever the rate Of interest or the Priee OF the
stock issued may be, am clearly OF opinion 'ns.
a ample and direct loan, for which nothing but
stock shall be issued 10 the most eligible mooe OF
borrowiae Whether this will be Effected oy CIV
ing a six Der cent stock at less Price than us
nominal value, or by giving STOCK bearing hlgnef
interest than six per cent al par, VIII depend "a
acme degree on the opinions OF ihe money1enoefs
All other things being equal although was, from
narticusr circumstances compelled during the last
wsr 10 pursue q different course think the latter
mode to be preferable
In arranging the terms 1t must always be recoi-
lected that there is an important difference be-
tween Great Britain and the United States. Eo-
Pertaining no expectation OF ever reimbursng the
capital the sole object OF the British Chancellor OF
tha Excheduer is, 20 obtain the money at the low
eat possible rate Of interest. We must never lose
sight in the United States Of the fundamental prin-
eiple, heretofore 30 constantly adhered TO- That
Government will pay the capital Of the debt as soon
as practicable On that principle. the loans, REIN
bursabe within the shortest possible time, are al
WAYS preferable. II IL were practicable and sup
posing for instance that both could be sold tor the
same price, a seven per cent stock redeemsoe
Within ten years would appear to me more eligible
than one bearing six per cent interest ana re-
desmable In twenty years.
The preceding observations apply only 70 details
bat there 10 an important point 10 which wish TO
call the public attention
T,essury Notes were first introduced by me they
a-s bat mere transcript Of the British Exchequer
Bill. and were intended TO perform the same Office.
AT the commencement Of war, they afford con.
veuient mode Of anticipating portion OF the annual
revenue equal TO the amount OF notes which may
be kept in circulation, at par, or above par. they
afford the ofconvenient investn ent Tor snort
period and the extent 10 which they may circulate
n, oar depends on the demsnd for s1ch investments
They are made paysble a. end OF short period
one ar from tn cir date and they bear an
Interest generally lower than that which prevails at
the time. SO long as they bear those characters
they never can become part OF the Currency NO
species OF paper, by whomsoever issued, can become
currency so long specie payments are maintain
sd unless II be exchanged at once Tor specie al
IFS nominal value. This ia the character Of bauk
notes and IL is wanted in the Treasury Notes, the
value OF which necessarily huctuates according 70
demand and TO the rate at which money may be
borrowed Ifabove par, debtor will give them
IN osyment Of his debt if below par, no creditor
will sccep, them IT, in order 10 increase the de
lnand they arem made receivable in payment OF Gus
tom House duties or any other debt due TO Govern
c-prnent IN ey are still subject 20 thesame general
Law fabove par they never will be used for the
purpose of effecting such payment II below par,
Government will be compelled 70 receive them ~
pa,msut; while, on the other hand, it is obliged to
TO make all its payments In specie or 10 drafts equal
IN value TO specie. This is precisely the state OF
things at this moment In order 10 increase their
circulation the Treasury Notes have also been
made convertible at any time into SIX per cent
stock which would have answered good purpose,
nthe price Of six per cent stock could have been
maintained at par.
There Is however state Of things during which
the amount of Treasury Notes may be indehoitely
increased, and be occasionally used as currency.
This takes place when there is a general suspen
sion of specie payments. When this catastrophe
takes place ia England, there il at least uniformity
Interpretation. The notes of the Bank Of England
ss substituted for specie; and the price OF all COM
nodiries Of Public Stocks and Of Exchequer Bills
Is regulated by the market value Of those notes in
specie. And this generally, though not with per
feet uniformity, will depend on the contraction or
expansion of the Bank issues. But there is not,
In the United States, any such general paper stand
arr !" ispcnsicn OF specie payments
to rniruns issues in bank notes IL regulated In
each State by It's laws or by public opinion At
such time there are twenty or thirty species OF
currency according to locality and each OF these
varies la each place, according TO pubic opinion
which in some instances, has been sufficient -
in 1ap
4. is during such q state Of things, that the pay
ment Of Treasury Notes may be postponed, aud
the issues be increased indefinitely. In that case
they become pure paper money; and may com
pete, perhaps sdvaptageously, with the other paper
currences In circulation Such was the case IN
the United States from the time Of the general
suspension OF specie payments In September 1871,
till these were resumed in lsl6-l7.
believe IL was in 1887, and after another gene
raj suspension Of specie payments had taken place,
that Treasury Notes were again resorted to and
they made also part of the loans OF le4l aud 1912.
The amount must have been, however very in
considerable, and never saw one OF them. But
they have been madethe foundation Of the two war
loans OF July, 1916, and January 1917 in which the
issuing of stock 10 but supplementary incident
The amount authorized, by the Act OF 22d July,
1886 10 ten millions and that by the Act Of 2sth
January lss7, twenty three millions together thir
ythree millions, including both the notes and
sock which may be issued by virtue OF the said acts
now below par and the Secretary of the Treasury
sees clearly, that direct loan, for which such
stock would be issued. could not in all probability
be effected at par. He thinks il may be done by
substituting Treasury Notes for stock. But do
not see in what manner he can attain his object
1t lie true that Treasury Notes sold now at
higher price than six per cent. stock. To what
csuse is this owing
Not certainly on account OF their vertibility
into stock; nor because there is greater demand
for short investments; which 10 impossible, while
the bes, secured paper, bearing an interest Of 10
per ceot q year, may be purchased at par. The
only cause Of the market price Of the Treasury
Nores being higher than that Of the six per cent
stock TO- because they are by law received at par
IN payment of Custom House duties and Of any 9th
er deb, due TO Government The necessary conse-
auence is that, long theysre ever so little be-
low par, they must continue 10 form the greater
part Of the receipts Of the Treasury. The Secretary
has right TO reissue them he can compel no one
20 receive then, but il he has nothing else 10 give
will not the disbursing officers, the Psymsster Gen
ersl the Qusrtermsster General. &c. be Obliged 10
take them and would not q deprecated paper
currency be thus forced on the country IT, on the
Al. - - a. -