The Cecil Whig. [volume] (Elkton, Md.) 1841-current, 1862-12-13

/ comparatively SuIall REDUCTION OF inc lat-
ter will allow ample room for the whole
increase of the former, authorized BY
existing laws : and as the production
proceeds the increase may be extended,
never, however, passing the poirt which
admits the negotiation of loans at rcas-
enable rates. The Secretary has here
tofore advised the imposing of moder-
ate tax on corporate circulation, and
now renews the recommendations as the
best of reduction and gradual substitu-
ton. Such tax involves no hardslips.
No es circulating as money cost no hing
beyond the expense of production and
supervlsi ion, and yet form Il highly aecu-
mulative species of property. The
necessities of the war have caused the
taxation of almost all forms of value
Can there be sound reason for exempt
ing that which costs the proprietor least
and brings him most =!
1t may be properly added that this
desirable substitution of circulation,
uniform in description and value, for a
circulation varying widely in both, may
perhaps be more easily and beneficially
effected now than any other time. The
circulation of United s atcs notes NAV
grca ly facilita C the payments to the
banks through which their own notes
must be withdrawn, and thus not only
protect the community from The incou-
venicnccs, but the banks from the losses
which might otherwise at end reduction.
1t may also be added that when the
substitution shall have been accomplish
ed, and, perhaps, if circumstances favor,
at an earlier period, payments in specie
OF United States notes may be resumed
with less cost and less injury to business
than would attend like resumption in
payment of corporate notes. Wi h COM
paritively trivial sacrifice, the Govern
men can, whenever is expenditures are
reduced to revenue, provide, by loan
or otherwise, all the coin needed to COM
mence and maintain the resumption.
While the Secretary thus repeas the
preference he has here oforc expressed
for a United States note circulation, even
when issued direc ly by the Government,
and dependant on the ac ion of the Gov
crnnent for regula ion and final rcdemp-
ton, over the note circula ion of the
numerous and variously organized and
variously responsible banks now existing
III the country and while he now sets
forth, more fully than heretofore, the
grounds Of that preference, he i'll
adhorcs to the opinion expressed in his
las; repor', that circulation furnished
by the Government, but issued by bank
ing associations, organized under a gen.
eral act of Congress, is to be preferred
to either. Such a circulation, uniform
in general characteristics, and amply
secured rs to prompt cItibility by
national bonds dcpcsi ed in the treasury
by the asSocia ions receiving it, would
unite, in his judgmen, more cIemcn of
soundness aud utility than can be COM
hlncd in any other.
\ circulation composed exclusively of
notes issued by the direction of The Gov
eminent, or of such notes and com. is
recommended mainly by two eonsidera-
tons the first, derived from the ftcil-
ity wi h which it may be provided in
emergencies, and the second, from its
cheapncss.
The principal objections to such
circulation as permanent system are,
LIST, the facility of excessive expansion
when expenditures exceed revenue I'd,
the danger of lavish and corrupt cNpen-
diturc, : imuatcd by facility of cXpan-
sion: I'd, the danger of fraud in man
agement and supervision 4th, the
impossibllity of providing 1t in sufficient
amounts for the wants of the people
whenever expenditures are reduced to
equality with revenue or below it.
These objections are all serious. The
last requires some clucidation. 1t will be
easily understood, however. if it be cunsid.
cred that Government issuing !; credit cir
culation cannot supply, in any given period,
an amount OF currency greater than the
excess Of its disbursements over its receipts
10 that amount. it may create debt in
small notes. and these notes may be used as
currency. This is precisely the way in
which the existing currency of United States
notes is supplied That portion of the
expenditure not met by revenue or loans has
been met by the ISSUE of these notcs. Debt
Gus debts in other forms. Whenever, there.
fore, the country shall be restored to a heal
thy normal condition, and receipts exceed
expenditures, the supply of United States
notes will be arrested, and must progress
sively diminish Whatever demand may be
made for their redemption in coin, must
hasten this diminution ; ami there can be
no reissue; for reissue, under the condi.
tons, necessarily implies disbursement, and
the revenue. upon the superstition, supplies
more than is needed for that purpose
There is, then, no mode in whicha currency
in United States notes eau be permanently
maintained, except by loans of them. whca
not required for disbursement. on deposits
of coin, or pledge of securities, or in some
other way. This would convert the Treas
ury into Government bank, with all its
hazards and mischiciS.
If these reasonings be sound, little room
can remain for doubt SHAT the evils certain
to arise from such scheme of currency, if
adopted as permanent system, greatly
ovcrhalancc the temporary though not in
considerable advantages offered by it.
1t remains to be considered what results
may be reasonably expected from an act
authorizing the organization of banking
associations. such as the Secretary proposed
in his last report.
The central idea of one proposed meas
urc Is the establishment of one sound. uni.
form circulation. of equal value throughout
the country, upon the foundation of national
credit combined with private capital.
Such currency. it is believed, can be