New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1861-12-10


never disappointed.
Il mus, DO. be concealed however that The con
dion of The national finances when the present Sec
rotary entered npOn the duties Of his oiee, though
somewhat Improved during the atle and upright,
though brief, administration OF bis immediate pede-
cesOf was such % make advantageous rates IN
the negotiation of loans inevitable Ii affords JUS,
occasion OF graduation that under most embarrassing
crcnm stances Of shaken crcdi ard immense demands,
loans have been effected at home, without resort 20
any fOIeign maTke,, 10 the amount OF SD O0OoOO,
with n virtual engagement for $50 900 COO more, ~
I'm average rate, considering the conversion OF the
three years 7.30 bonds into twenty years SIX per
cent bonds as certain OF somewhat less than % per
cent.
This rate of interest is, however, higher than the
United States, with their vast and accommodating re-
soarecs ought TO ray. No doubt reasonably exists
that, after the reGstabshnent Of union and order,
the five per cent bonds Of the Cuited States VIII
command a premium in the markets OF the world,
unless the national debt be, meantime. augmented
beyond necessity or reason. The wealth and power
OF the country, manifested IN me suppression OF re-
beon, will demonstrate the absolute safety Of In
vestments in United States st0cke aud foreign capt
talists restricted to the lower interests and the nie-
rior security Of public debt in other countries, VIII
be attracted by The superior advantages offered by
the loans of the Union.
To enable the Government to obtain the necessary
means Cor prosecuting the war TO successful issue
without unnecessary cost, is a problem which must
engage the most careful attention OF the legislature
The Secretary has given to THE problem the best
consideration in his power, and now begs leave 10
submit TO Congress the result Of his reflections.
The circulation Of the banks of The United States,
on the Ist day of January, 1861 was computed to BIO
S202 000767 OF this circulation Sl5O 900, IN
round numbers, IVES in States now loyal, inel11ing
West virginia, and $j0,CO0,0O0 in the rebelIlons
Safes. Tie whole Of this circulation constitutes q
loan without interest from the people to the banks
coeting them nothing except the expense OF issue
aud redemption and the interest on the specie kept
on hand for the latter purpose aud IL deserves con-
tideration whether eouud policy does not require
that the advantages Of this loan be transferred in
mart AT least from the banks representing only the
interests OF The stockholders, to the Government,
representing tie aggregate interests Oh tie whole
people.
L, has been well questioned by tho most eminent
statesmen whether currency OF back notes. i'sued
by Sca institutions under State laws, is not in fact
prohibited by the national Constitution Snch emis-
sioIs certainly fall within the spirit If bot within
the letter, Of the constitutional prohibition OF The
emission Of bills Of credit by the States, and OF max
ing by them OF anything except gold and silver coin
legal tender in payment OF debts.
However this may be, it IL too clear to be reason
ably disputed that Congress- under lie constitutional
powers TO lay taxes, TO regulate commerce, and TO
regulate the value of coin possesses ample authority
TO control the credit circulation which enters SO
largely into the transactions OF commerce and Affects
in so many ways the value of coin.
In the Judgment OF the Secretary, tho time has mr.
rived when Congress should exercfe this authority.
The value Of the existing bank-note circulation de-
ponds on the laws OF thriy.tour States and the
character OF some sixteen hundred private corpora
ions II j. usually furnished in greatest proportions
by institutions Of least actual capital Circulation,
commonly il in the inverse ratio OF s0yeney. Well
founded Institutions, o. large and solid capital have,
in general, comparatively little ereuiaiioni While
weak corpors ions almost invariably seek 70 sustain
Themselves ~ obtaining from the people the largest
possible credit in this form. Under such systeinl
or rather lack Of pysiem, great nuctuahohs, ana
heavy losses In discounts and exchanges are ineV-
liable: and not unfrequenty through failures OF the
s.qing institutions considerable portions Of the cir
culatiCn become suddenly worthless in the hands OF
the teople. The recent experience q several States
in the Valley OF the Mississippi painfully illustrates
the nstice of these observations; and eniorces by
tie most coeen practical arguments the duty oil pro-
tecting and industry against the recurrence
of such ii orders.
Tie Secretary thinks It possible TO combine with
this protection provision for circulation safe To the
community and convenient for the Government.
Two plans for cliooiing this object are suggested
The first contemplates the gradual Withdrawal IRON
circulation of the notes OF private corporations and
for the issue in their stead, Of United States notes
payable In coin demand, IN amounts sufficient Tor
the usofgl ends of II representative currency. Inc
seooud contemplAtes tlo preparation and delivery TO
institutions aud associations Of notes prepared for
circulation under national direction, and to be Sc
cured as 10 prompt conyertibiliiy into coin by tee
pledge Il United States bonds and other noediul reg
ulaiiJns.
The first Of these plans was partially adopted at
the last serson of Congress in the provision author
ling the Secretary TO issue United States notes, pay
able In coin TO an amount not exceeding $50 900 0O0
That provision may be so extended as 10 reach the
average circulation Of the country, while moderate
tax, gradually augmented on bank notes, VIII re-
lieve the national from the competition Of local crcu
a l.. -. A.. Cd hot fla h.
,,ution Of national for State currency upon this
plan, would be equivalent to loan 10 the Govern
ment without interest except on the fund 70 be kept
in coin, ind without expense, except the cost OF
preparation, issue, and redemption; while the people
would gain the additional advantage OF a uniform
currency and relief from a considerable burden in
the form Of interest debt. These advantages are
doubtless considerable, aud If scheme can DO de-
yised by which such circulation Will be certainly
and strictly confined to the real needs Of the people
and kept constantly equivalents to specie By prompt
and certain redemption in coin, 1t will hardly fail OF
legi ative sanction.
The plan, however, Is not without serious incon
yeniencee and hazards. The temptation, especially
Urea, in times Of pressure and danger TO Issue notes
without adequate provision for redemption beyond
means, however carefully provided and managed;
the Lazard OF pancs, precipitating demands FOR oon
concentrated on few points and single fund; the
risk Of deprecated, depreciating, and finally worth
less paper money! the imneasura6le evils OF Dis,
honored public faith and national bankruptcy; all
these are possible consequences Of the adoption Of
system Of Government circulation. II may be said
and perhaps truly, that they less deporable than
those Of an irredeemable bank circulation. With
out entering into that comparison, the Secretary con-
tents himself with observing that, in bis Judgment
these possible disasters far outweigh the probable
benefits Of the plan that he feels himsef constrained
TO forbear recommending its adoption.
The second plan suggested remains for examination
Its principal features are, s circulation Of notes
bearing a common impression and authenticated by
scommon authority; (2dl the redemption OF these
nd ianIitntiat.a Ia