The daily Evansville journal. (Evansville, Ind.) 1862-1863, 1862-12-11
Extracts from the Report OF Seere-
Hea tary Chase. ~ i

NhteoSs
EFFECT OF SUBSTITUTION OF GOVERN
oa1 MENr CIRCULATION.
] Itmay be properly added that this de-
sirable substitute Of circulation, uni
form in description and value, for a
circulation varying widely in both, may,
perhaps, be more easily and beneficially
effected now than at any other time.
= The circulation of United States notes
may greatly facilitate the payments to
the banks through which their own notes
must be Withdrawn; and thus, not only
protect the community from the incon-
veniences, butthe banks from the losses,
which might otherwise attend reduction.
It NAV 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 a like resumption in
payment Of corporate notes. With COM
paratively trivial sacrifice the Govern
ment can. whenever its expenditures are
reduced to its revenue, provide, by loan
or otherwise, all the coin needed to com
mence and maintain the resumption.
While the Secretary thus repeats the
preference he has heretofore expressed
for United States note circulation,
even when issued directly by the Gov
ernment, and dependent on the action of
the Government for regulation and final
redemption, over the note circulation of
the numerous and variously organized
and variously responsible banks now ex-
listing in the country; and while he now
sets forth, more fully than heretofore, the
grounds of that preference, he still ad-
heres to the opinion expressed in his last
report, that circulation furnished by
the Government, but issued by banking
associations organized under a general
act of Congress, is to be preferred to
either Such a circulation, uniform in
general characteristics, and amply Sc
cured as to prompt convertibility by ma
tional bonds deposited in the Treasury,
by the associations receiving it, would
unite, in his Judgment, more elements of
soundness and utility than can be com
bined in any other.
A circulation composed exclusively Of
notes Issued directly by the Government,
or of such notes and coin, is recon-
mended mainly by two considerations
the first, derived from the facility with
which it may be provided in emergen-
cies, and the second from its cheapness.
The principal objections to such a cir
culation as permanent system are:
lst. The facility of excessive expan-
sion when expenditures exceed revenue.
ID. The danger of lavish and corrupt
expenditure, stimulated by facility of ex-
pansion.
Sd. The danger of fraud in manage
ment and supervision.
4th. The impossibility of providing it
in sufficient amounts for the wants of the
people whenever expenditures are re-
duced to equality with revenue, or be-
low it. i
These objections are all serious The
last requires some elucidation. 1t will
be easily understood, however, if it be
considered that Government issuing
credit circulation cannot supply, in any
given period, an amount of currency
greater than the excess of its disburse-
ments over its receipts. To 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 expend-
iture not met by revenue or loans has
been met by the issue of these notes.
Debt in this form has been substituted
for various debts in other forms. When
ever, therefore, the country shall be re-
stored to healthy and normal condition,
and receipts exceed expenditures, the
supply of United States notes will be
arrested, and must progressively dimin-
ish. Whatever demand may be made
for their redemption in coin must hasten
this diminution; and there can be no re-
issue. for reissue -Ia.>ler-tfIo conditions,
necessarily. implies disbursement, and
the revenue, upon the supposltion, sup
plies more than is needed for that pur
pose. There is then no mode in which
a currency in United States notes can be
permanently maintained, except by loans
of them, when not required for disburse-
ment, on deposits Of coin, or pledge of
securities, or in some other way This
would convert the Treasury into Gov
ernment bank, with all its hazards and
miSchiefs. -. -
If these reasonings be sound, little
room can remain for doubt that the evils
certain to arise from such a scheme of
currency, if adopted as permanent sys-
tenn, greatly overbalance the temporary
though not inconsiderable advantages
offered by it. ..
1t remains to be considered what re-
suits may be reasonably expected from
an act authorizing the organization Of
banking associations, such as the Secre-
tary proposed in his last report.
PROPOSED ESTABLISHMENT OF SOUND AND
UNIFORM CIRCULATION.
The central idea of the proposed meas
ure is the establishment of one sound,
uniform circulation of equal value
throughout the country, upon the foun-
dation of national credit combined with
private capital.
Such currency, it is believed, can be
secured through banking associations
organized under national legislature.
1t is proposed that these associations
be entirely voluntary Any person de-
sirous of employing real capital in suffi-i
cient amounts, can, if the plan be adopted,
unite together under proper articles, and,
having Contributed the requisite CAPITAL