Indiana State sentinel. (Indianapolis, Ind.) 1861-1865, 1862-02-10

MenZies, NY
There is difference OF opinion among the
leading fnancers as to the effect of this measure,
if it becomes law, as il undoubtedly will 1t
will relieve the Government and the commercial
interests Of the country temporarily beyond
question, while we doubt not that any attempt to
make paper equivalent to gold will in the end
cause greater evils than those which the proposed
law seeks TO remedy. 1t completely changes the
whole financial policy of the country which was
attained after years of struggle and under which
a proximate stability in commercial affairs would
have been reached had the policy been main
tanned. The New York Post, one of the ablest
of the Republican press, presents the following
forcible considerations in opposition to the meas
ure:
II appears to us to be very clear that when
made a legal tender, they must cease to circulate,
and will fall into the vaults of the banks as the
substitute for specie. The banks will be obliged,
by law, to accept them in payment OF debts to
themselves; and will no doubt be obliged, for the
sake of the general convenience, to receive
them on deposit But, once in possession of the
banks, they are Just as good to them for the pay
ment in turn of their own Indebtedness coin
is now and, as they will be of less value
than coin, the banks will naturally, and un-
der the promptngs of individual interest,
keep their reserves in legal tender notes in.
stead of COIN We have experience to guide us
on this point. Our older readers will remember
when by law either gold or silver coin, at
the option Of him who had to pay. was legal ten
der, whether the amount 10 be paid was large
small. Our gold coin at that time was of a lit
tie more value, intrnsically, than our silver coin.
American gold all went abroad; the banks held
and paid out nothing but silver. When two diff
ferent means are provided for payir debts, every
one will, of course, use exclusively that one
which is the cheaper. Our ordinary circulation
will still be bank notes, but the bank notes will
be practically converted into promises to pay in
Treasury notes instead of coin.
The legal tender notes will no more circulate
than the coin, for which they substitute,
now does They will not get into general circu-
latiOn until they have first filled and overflow ed
the bank vaults. Indeed, it may be doubted
whether the banks will allow them to flow out
of their vaults, except in payment for govern
ment stocks. They are much more likely, in
those States where no security is required for
circulating notes. and even in those States where
security is required, but where United States
stocks are accepted AS such security, TO make the
/ Government notes in their vaults foundation
for II largely increased issue of their own notes,
! from which will result. as heretofore, a great in
crease of nominal prices and great decrease of
the comforts of those who live by manual labor,
and, in fact, Of all who live by earning money
and not by their specializing wits And the last
consequence must be terrific financial explosion,
not unlikely to make a sudden end, and forever,
in this country, of al sorts of paper money.
The banks will. of course as the legal tender
notes flow into their vaults, sell their useless
coin at the apparent premium it will bear, and
the coin will go TO other countries where it is
valued and used. 1t is not improbable, if the
legal tender bill be passed, that all the banks in
the free States will. within year, hold all to-
gether less than FIVE millions OF coin