Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1862-11-25
The FEDERAL FINANCES.
New Plan of PubIic Credit and Currency.
.ueBsoTiaE or Wear Fork ,Hsychassss a,'a
EiERsiciefs.


To the Congress Of the United States Of Ameriea:
Your memorialists respectfully represent that
TIE financial affairs Of our government require
to be so systemntized as to command the conf
dence Of the country in tho administration oi
the Treasury Department.
That the system pursued by the head of the
treasury of issuing irredeemable demand notes
certificates of indebtedness, seven-thirty bonds
and certificates of deposits for short loans is &C
cumulsting an enormous demand debt that will
soon create An uncomfortable alarm among busi-
ness men, if it does no. totally destroy the ma
tional credit.
1t appears, from statements made by the chiei
Of the treasury, that only sixly-sight millions Of
our public debt have been funded in twenty
bonds since the rebellion commenced, aud that
ths treasury depends upon temporary loans to
supply all the funds required for the ex penses OF
the government beyond the income from rove
n7e and taxes.
Il is not possible to invent a more hazardous
plan of finance to provide money TO pay the cur
rent Indebtedness of a great country involved in
an expensive and protrseted war. Against this
extraordinary practice your memorialists re
spsctfully but earnestly protest.
1t is custom among business men as well as
governments to make short loans when money
is dear, and long loans when money is cheap.
Bat the treasury roverses this common practice.
For, while money has been cheap beyond al
pTecedent durisg the last eight months, the
treasury Las made few twenty years loans aud
has restricted its BORROWING to loans of an ex-
tremely temporary charac.er The only rsason
we have heard assigned for tlis plan Of national
fnancering, is that this war most be of very
short duration, aud that when it ends our twenty
year bonds will bring greater premium Your
msmOrialists are not able TO fix the time when
peace viii be restored to sur country but they
do say that it is uatter of mathematical Ger
taiuty that, if peace is restored within fen
years, demand for money viii spring up il all
departments of trade, manufactures and com
merce to so great an extent that the price o
msney will rule higher than a. any former
period Of our commercial history; and when il
is thus in demand can the treasury expect the
capitalists Of our country to divert their fund.
from these natural channels Of business 10 in
vest in six per cent bonds
The time when the treasury could have funded
six per cent. bouds at par, TO the extent OF fv'
hundred millions kas now passed away, no
soon TO return
The paralysis Of trade, which destroyed busi
ness aud the demand for money, and threw j
back upon banks and capitalists, is disappear
ing, and speculation, trade, commerce, and man
ufsctures are gradually creating the sams De
mand for capital that existed before tbs rebel
lion. Thus it becomes necessary to resort t,
some other means OF obtaining money to carry
on this war and meet the wants of the country
II should be remembered that our condition
as people, is different from any other. l. is
well known fact We have no large capitalist,
that can absorb any considerable amount o
new securities. Our capitalists have thei
money invested in bonds, MORTGAGES real es-
tate, State bonds, bank, insurance, and othel
local stocks. Ii would be extremely injuriou,
TO the interests of al classes OF our peopl'
were these securities and properties forced upoI
the market 30 raise money to invest in govern
ment bonds at aAy time; but especially would
it be so at time when trade, commerce and
manufacture shall, after the peacc, sgain ask
for the facilities which can alsne be obtained il
an easy money market.
It il also an important fact that the greater
portion of the available capital of this country
is employed in trade and business, and is thu
used for the profit it will earn, instead Of al
annual interest upon revenue securities.
This condition Of our country is known to ur
sll, and is the practicable demonstration and ev
idenee of the intelligence, ,5enterprse aud thrift
OF our people; and hence we esteem those evi
dences Of debt most valuable that possess Ga,
most convertible character while they contsir
the intrinsic merit of certain value
In consequence of these facts and conclu
sions, your memorialists desire TO present to yot
a system of American finance which wlll con
form to the condition and genius csaQur psople
and which will make the burtheH Of a hslYy
debt bear as lightly a, possible upon all in
terests, by adjusting it to the shoulders of ira
ders, bankers aud capitalists.
Ia our country money is that article which
the Federal government should declare to be
legal tender, aud the public viii take this money
SO lorg as trade and business may demand il
Trade will employ money so long as the use o
it viii produce profs greater than the amount
of interest paid for is use. When We wish te
foat more money than can be proftsbIy en-.
ployed ia trade, we must mako it bear an inter
est. or it will depreciate in current value.
1t is not the quautity Of bonds bearing inter
est that creates iBhition or ever issues, but she
large quantity of irredeemable bills forced apon
tbs public as currency that bear no interest.
I'he principles we now propose to embrace il
our national finances we trust may be one thai
will preserve the credit and life Of the nation
/ aud alleviate the fears of those who consider a
national debt an uRmitigated evil
Your mem0Iislists therefore respectfully re
guest you to authoriBs and direct the Treasury
| Department to issue coupon bonds, having
twenty years to run, Of the denomination Of
twenty, fifty, one hundred, Eve hundred, one
| thousand, snd Eye thousand dollars each, bear
ing an interest Of four and one-half per cent
and to make such bonds legal tender.
Your memorialists represent that these bond:
will be taken and held by all classes of our peo
| pie, and especially by merchants, traders snd
manufacturers. to very large extent, aud thai
the introduction Of these bonds viii induce busi-
ness men to use more capital and less personal
credit in their business, because surplus capita
invested in these interestpaying bonds viii still
be money in the hands of tie holder.
We propose four and one half per cent. inter.
est because we fnd, by q careful estimate Of cur
rent values, that four per cent would be toe
| low, and five per cent. too high and that foul
and one half per cent with the legal tender
clause making the bonds money, will make
merrhsntable as veil ss legal par value. Thii
] will eaase them to be freely used in the genera
business of the country ia place of bills Of ex
/ change, bank credits, and individual accept
anees.
/ Another important advantage will hlw from
/ this system Of finance. This rate Of interest Oh
government bonds will not so seriously depreci
4 Ste mortgage securities or ths current value o
real estate as the rate Of six and seven per cent
now being paid by the treasury upon its ISSUED
/ bonds.
/ And, again, these bonds being money, bear
/ ing interest, will soon take the place of as wei
as absorb the irredeemable demand notes, be
cause these bonds viii possess ell the character
| istics of money aud bear interest.
BY adopting this system the treasury viii no
be compelled to ask another Loan for 90 thes
bonds viii be E legal tender, the treasury ma.
use them as other money in payment 10 publi,
I creditors Thus will the national credit be pro
tected sgainSt dishonor, to which i is now ex