The New York herald., 1862-01-20
NEW YORK HERALD, MONDAY, JANl

becoming abundant. A number Of country
banks 1.-TWO hundred and forty of them)
failed, and the general want Of confidence
in them became 80 great that wide fiold
| was thus opened for the circulation of the
Bank OF England notes, and In 1877 their value,
relatively to that of gold, was nearly restored.
Immediately after the bank proceeded to re-
sumo specie payment, till only s3,595,960, or
less than eighteen millions of dollars, remained
in its Golfers The government then found it
necessary to interfere, and the act was passed
known as Mr.. Pesl's bill, providing for the
gradual resumption of cash payments. One of
the provisions of this act arose from sugges-
ton of Mr. Ricardo, which appears cal
culated to afford security against the evils
to which paper currency is exposed by
panics. The effect of this plan is to exclude
metallic currency, with the exception of
what might be necessary for ehecting small
payments, by making Bank of England notes a
legal tender, with the obligation imposed on the
directors to pay them on demand, in gold bars
| Of the proper standard and of weight not less
than sixty ounces for any one payment. This
provision which was temporarily adopted in
Peel's bill, would effectually prevent depreeia-
ton of the notes, and in all times of political
panic would have a good effect-the greatest
part of the mischief arising from the numerous
holders of small amounts of notes. Why this
provision has not been permanent no good
reason has ever been assigned.
As the law now stands, Bank Of England
notes are legal tender, except at the bank and
its branches and the notes are only payable at
the place where the same are issued The bank
is required to have as much coin and bullion
in its Golfers as will amount to third of the
liabilities of the bank, including sums deposited
as we'll as notes in circulation. Experience
proves that is not sufficient in times
of an unusual drain, and hence suspen-
sion of specie payment becomes necessary by
the authority of the government. The princi-
pal privilege conferred on this bank is that
any other banking establishment having more
than six partners is prevented from issuing
notes payable on demand in or within sixty-6ve
miles of London. The balances of money be-
longing to the government are kept in the
bank which, in this respect, performs the func-
tions of private banker. The bank acts as
the agent of the government in the management
of the national debt, and receives and registers
transfers of stock from one public creditor to
another, and makes the quarterly payments of
the dividends.
Thus we see that in time of war it is necessa-
ry for the English government to have control
of the currency. 1t will be equally necessary
for our government to have control of the cur
rency in the United States, engaged as it is in a
gigantic war. The banks have already sus-
pended specie payment. The government has
done the same, and must issue a national cur
rency, which will answer for all purposes of
internal trade, and will in a great mea-
sure supersede the currency Of all the
rotten banks in the country. The greatest
depreciation it ought to reach should not
exceed ten per cent, and that not before a
lapse of two years. Specie is only needed for
the balance of trade in our foreign exchanges
and as our imports have vastly diminished,
owing to the economy practised since the'war
began, very little gold need leave the country
What are the Committee Of Ways and Means
doing to provide for the sii cws of war? The
Chairman is Thaddeus Stevens, who employs
himself in abusing correspondents of newspa-
pers-a proof that he is a man unequal to the
position and dignity he has assumed otherwise
he would not waste his precious time in COM
menting upon what the newspapers may say.
He says he is collecting facts, and is not yet
prepared. What has he been doing, and what
have the rest of the committee been doing, since
the last session, seeing that it is only now they
are collecting the facts Did they not then
know that financial provision must be made for
the war; Does not their neglect to do so till
now prove their utter incompetence? Yet Mr..
Stevens is one of the school of politicians
who are continually abusing General Mcclellan
because he is not ready to march on Richmond.
The most essential thing the General now re-
quires Is money; and that neither the committee
nor Congress has made any effort to provide.
As for Mcclellan, he is fully prepared, as
far as his army is concerned; and that prepa-
ration he has made in one-third the time the
Emperor Of the French required for his cam
paign in Italy. It Is not necessary, however,
and probably not desirable, that he should
advance before April. But when he does
move, let the Committee on Ways and Means
and Congress at large take good care to have
him well supplied with the sinews of war
Otherwise the country will hold them RESPONSE
| BILE.
The WAR AND THE PRACTICE OF ECONOMY
The great prosperity Of the United States, the
long prevalence Of peace, and the absence of
taxation, have combined to render us the most
extrsvagant people on the face Of the earth.
Mechanics and shopkeepers here dress about as
well as the nobility and gentry Of England
Every European who visits this country and
every American who visits Europe. are struck