Arkansas true Democrat., 1857-12-29
Treasury Notes-Their Use and Abuse.

are held. They may b4 occasionally Used as sobsti utes for private bills of exchange; but this will do no harm.
 Treasury notes, bearing only mill interest as sone eastern papers nave proposed, and re- ceivable for public dues, will be, to all intents and purposes government paper money They will have no immediate commercial va lue, except what they may derive from their being receivable for public dues. h principle they will be identical with the old provincial paper money, and continental money and with the French assignats Or, to come to times nearer the present, they will be identical in principle with our old Arkansas treasury war rants, kind of medium which necessity some aars ago compelled us to adopt, but which no zen of the State would like to see restored.
 The credit of the United States government is now so high that it could, no doubt give currency to a considerable amount of treasury notes bearing only mill interest and receiva- ble for public dues; but, just in proportion as treasury notes are used as a circulating me- dium, just in that proportion will they drive gold and silver out of circulation. Just in the proportion in which the government receives treasury notes in payment of public dues, just in that proportion will it cease to receive specie; and just in that proportion must it cease to pay specie.
 Push this policy to a certain extent and in no long time. the government will be left with out any revenue, except its own promises to 1 pav'' Then it will not be able to negotiate stock loan to any advantage, for it will have no means of paying the interest on such q loan, except in treasury paper.
 If treasury notes be issued bearing only a mill interest and receivable for public dues, fundamental principle of the constitutional trea- l sury system will be violated That principle is, that all the receipts and payments of the United States government should be in gold and silver. If government wants a loan, no matter what form the loan may assume, it should be in gold and silver. The separation of bank and State will produce but little good | if it leads to an addition of government paper money to bank paper money.
 The secretary of the treasury takes, in his report, the correct view of the subject "It is recommended that authority be given to the department by law to issue treasury notes for an amount not to exceed twenty mil lions, and carrying specifea rate of interest,"
 By "specifed" it is to be presumed, the se- cretary means an adequate rate of interest, such as will make them eligible as commercial investments. He does not directly say that they should not be receivable for public dues but this is implied throughout his report He apprehends all actual defcH in the revenue for the year, and proposes to meet it by trea- sury note loan. But if it be a matter of con- pusion with him to receive these notes for public dues, all that will be effected by them will be anticipating in one month the revenue of the next, a course of procedure which might before the close of the year involve the depart ment in serious embarrassment.
 On this subject we ask the readers attention to the following quotations from Gouge's Fiscal History of Texas" volume published in Philadelphia in the year 1852:
 Issues of paper intended to pass as money, and to which currency is given by making them receivable for public ddes, afford so easy way of relieving immediate endorsements, that managers of fiscal concerns are under frequent temptations to resort to them. But such tenn porsry relief must, unless circumstances are pe- culiar, increase subsequent endorsements
 "When government issues small notes in- tended to pass money, and makes them re- ceivable for public dues, it takes the last step downwards in public credit. It has then no efficient revenue. All 1t then does by means of it's collectors of customs, and its collectors of taxes, is to redeem part of it's floating deb,; and this very act of redemption renders neces- sary the creation of new floating debt of equal amount with that redeemed
 Such government can no longer negotiate stock loan with advantages, for it has no lon | ger revenue in specie wherewith to pay the interest.
 Nations who wish to borrow may learn wis | dom from the British government. It has run in debt to the amount of four thousand million | dollars It borrows on exchequer bills or trea- sury potes, as well as stocks; but it always takes care that its exchequer bills shall be for consid- erable amounts, and that they shall bear such rate of interest as will leave no inducement to the merchants to pay them in for duties It always has a revenue in something distinct from its own paper, and thus has the means of SUD- | porting its credit.
 lv afa o1a for oI | governments to borrow is by means of stock 1 loans of gold and silver and treasury notes of such denominations (never less than fifty dol lars) as will prevent their becoming a common circulating medium, and bearing such a rate of interest as will make them eligible investments. 1 If these treasury notes are, in the aggregate. of l any amount, provision should be made to ex- 1 change them for stocks of long dates, rather than attempt to redeem them by receiving | them in payment of customs and other dues.
 For want of strict attention to these prin- | ciples the United States government was, in the war with Mexico, though that lasted but a short time, and though it pressed but lightly on the real resources of the country, brought into temporary, tnougn not serious embarrassment. Owing to a rise in the rate of commercial inter- est, the merchants found it to their advantage to pay in treasury notes rather than gold or silver. The result was that, in some of the most important Seasury offices, the amount of gold and silver was so reduced as but slightly to exceed the outstanding drafts against them. If was with difficulty that the daily expendi- lures were kept down to level with the daily receipts. At one time there was even a talk of paying the salaries of the clerks in the derari- ments with treasury notes. Fortunately this state of things was but of short continuance. If it had lasted for any time, it would have in- juriously affected the price of United States se- curities in the market, and would have had an