The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1862-06-16
NEW YORK HERALD, MONDAY, JUNE le, 1862.

NEW YORK HERALD,
that the government win be enabled. much
sooner than ID expected TO revert TO specie bs-
sis, without convulsion or catastrophe. The
amount Of new treasury notes which Il 10 now
proposed to issue is $50. 900, 900. OF these il
10 proposed to retain tS4.0 900 in hand
to meet an unexpected demand for the
return Of I and 8 per cent deposits; 80 that
the actual amount to be placed at the disposal of
the department. will only be SIG 100000 BY
the acts passed in February last. an issue Of
$3.50 900 900 Of notes was authorized, mainly to
take the place Of currency which had been dis
credited by the failure Of banks. by the decline In
border State stocks. and by the withdrawal from
circulation Of large amounts Of specie and Of
Southern bank notes. But Of these $3.50 900 900
Congress pronounced $50 900 900 TO be receivable
for customs duties. OF these 100000, 900 some
$50 900 900 are still aHoat and. being equivalent to
gold in the payment of duties, are held at q 81
premium. and are consequently withdrawn from
circulation. or the $50 900 600 of currency Gre
ated by Congress in February, there Is therefore
only about 500 900 900 a6oat- considerably less
than the amount Of the specie currency withdrawn
from circulation, of the Illinois. Missouri and
other bank currency which has collapsed in conse-
quence Of the fan in Southern States stocks, and
Of the Georgia, Tennessee, Louisiana and other
Southern bank currency which has become
worthless by the secession Of the States
from whence it hailed. There Is In reality at this
moment less currency-that il to say money
aHoat in the North than there was at the time the
war broke out. Mr.. Chase now proposes to sup
plement his present issue Of 500, 0OO, 900 by .
further Issue of $ll6, 900 ,O0O-makng in all about
$2O6 900 900 Of government currency to be aoated
This is probably more than there was in existence
in the North before the war. But, In the first
place, 1t must be Femembered that the war has
had tho effect Of wipng out Of existence all South
ern currencies, and that, - fast as we reconquer
States, we have got to supply them with money Of
some kind or other. At Nashville, for instance,
United States Treasury notes are the only money
which is freely used in daily business transactions
At New Orleans and Memphis the discredit of Con-
federate money has led to . general demand for
United States notes, and those active commercial
centres will very speedily absorb many mil
lions Of United States paper. Tho same
will be the case at Norfolk and all other
ports which are occupied by United States
forces. In the second place, it must always be
borne in mind that the real purpose of tho Trea-
sury Department was not the floating of legal ten
der notes, but the recognition Of six per cent
bonds. It is with the proceeds Of the latter that
the cost of the war must be betrayed The question
is, how could such bonds have been best and most
cheaply negotiated? The foreign bankers say to
Mr.. Chase You should have followed the Euro
pean example, called for bids, and let us make
terms with YOU" The Secretary has preferred to
vertible paper; issues SO much of it that money
becomes abundant, and stocks rise; and it then
becomes an object for the holders of his
currency to convert it into bonds. In
short while the skies of 1881 will sell 1T ll2
lis, and the $40 bonds at substantial pre-
MUM. When that is the case, every one who
receives thousand dollars Of legal tender cur
rency will take it to the SubTreasury before three
p. NJ. and convert it into bonds. In this
way Mr.. Chase will, in effect, be paying
the expenses of the war with six per
cent FIVE year bonds. negotiated at par, aud
there will be no imitation of paper money; for as
fast as the government currency is paid out it will
come back for conversion. He will. in reality,
have achieved the result which the bankers now
blame him for not aiming at, without cost to the
government, and without placing himself in the
hands of the money dealers. If he had called for
a loan of 500, 900 ,OO0-enough to last him for
three months-it is doubtful whether he would
have had SIS 900 600 offered at par. The very
men who are now loudest In denouncing him
would have refused to subscribe, and would have
sought to make terms which would have given
them fat profit. He has relied on his own re-
sources, and the result will justify his sagacity,
and will prove that there ia at least one govern
ment in the world which does not exist by suffer
ance Of the bankers and money dealers.
That the ultimate result Of the present policy of
the Treasury Department must be the substitution
of government money for bank notes throughout
the country is obvious enough. Mr.. Chase dis
covered when he began to cast about him for
ways and means that the government possessed,
under the constitution, power in regard to the
issuing of paper money which had always lain dor
mant That IL was the intention of the trainers of
the constitution TO secure for the country uni
form currency at par everywhere, and issued
under the authority and guarantee Of the genera
government, no one who carefully studies that in
s.rumcnt can doubt for q moment. Unhappily for
the country, the general government had never,
until the present war broke out exercised this un-
doubted power Of supplying the country with
money; and. in its default, the States. which were
by the constitution expressly prohibited from is
suing paper money. usurped illegally the right Of
granting charters to banks Of issue. They we're
perhaps forced to pursue the course they did by
the negligence Of the general government. Com
merce required paper money. and, If the proper
authority would not issue II. improper authorities
were compelled to de So The present war and
the exigences Of the case have recalled the fedc-
rol government 10 knowledge Of its privileges, IL
not to sense OF its long neglected duties to the
public in this respect and the result is the Issues Of
paper money which we are now witnessing. The
leading feature of these issues, az we have above
remarked, il their convertibility into 8 per cent
hands This feature operates as q perretnal check