The New York herald., 1862-12-06

-
gradual eubstisnEoa. Such tax nvsivss no harskps.
Notes crcuattng - money cost nothing beyond the en-
highly socamassss species q UsoUerx a ~ r. rcs@
ties Of the have caused the taxation OF almost all
Terms OF value Can there be sound reason for exempt
ng that which costs tho proprietor least and brings him
m0sG
1t may be properly added that this desrab substtu
ton Of circulation uniform In description and value or
circulation varying WILDLY both, may perhaps be
more easily and benelcaiIy effected 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which their own notes must be withdrawn, and thus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 Inconvenience
but the banks from tho losses which might otherwise at
may also be added that when the suosttution shall
have been accomplished snd, perhaps circumstances
favor al an earlier period payments In specie OF United
States notes may be resumed with less cost and less
jury 70 business than would attend like resumption in
pay ment IN corporate notes. With comparatively trivial
sacrifice the government can whenever expenditures
are reduced TO its revenue provide by loan or
all the coin needed to commence and maintain the re
sumption.
ADVANTAGE or A UNITED STATES NOTES CIRCULATION
While the Secretary thus repeats the prefe-
rence he has heretofore expressed for o United
States note circulation, even whom issued directly
BY the gcve nmont, and dependent on the action
ton, the note circulation OF the nd va
rousiy organized and vartousy responsible bank
existing u the country and while he now sets forth
he still adheres To the opinion expressed n his last
port, that circulation furnished by the government.
but issued by banking associations, organ ized under
general act OF Congress- Is 70 be preferred 70 either Such
q circulation, uniform in general charactersttcs and
Il nv ss y
ceivng would une in his Judgment, elements Of
soandness and utility than can be combined In any other
circulation composed exodus lively OF notes issued d.
rccty BY the government, OF such notes and con
recommended mainly oy two considerations the arst
derived from the facility with which Il be provided
in emergencies, and th second from It's cheapness.
THE DIRECTIONS 10 SUCH A SYSTEM.
The principal objections to such circulation as per-
mancnt system lst the facility Of excessive expan
son when expenditures exceed revenue 3D. the danger
q lavish spd corrupt expenditure stimulated by facility
and saperyison an the mpossbity Of providing Il IN
sufficient amounts for the wants OF the people Whenever
expenditures reduced 10 equality with revenue or
below 1t.
These objections all serious. The last requires some
eucdaton viii be easily understood however, II be
cannot supply any given period an amount Of currency
greater than tho OF It's disbursements over re-
cepts To that amount It may create . debt in small
notes. and these notes may be used currency This Ia
precisely the way in whicn the existing currency Of
United states notes is supplied That portion Of the
penditure not met by loans has been met by
the issue Of these notes. Ecbt In this form has bosn sub
sttuted for various debts in other forms. Whenever
there the country shall be restored TO healthy nor
mai condition. and receipts exceed expenditures the sup
ply Of United States notes will be- arrested, and must
progressively dminish. Whatever demand may be made
for their redempt In coin must hasten this dmnuton
dtions, necessarily implies disbursement and tho
nue. Sicn the supoSt'on supplies more than Is needed
currency United States notes be permanently main
taned except by loans OF them when not required for
disbursement deposits OF coin or pledge OF secur ties,
la other way This would the IRE asury
into government bank, with all its hazards and mis-
Chiefs
If these reasonings be sound little room remain
for doubt that tho evils certain TO arise from such
scheme Of currency, t. adopted ss permanent as
not inconsderable advantages offered Dy it.
rHg RESULTS To RE ExrEcrED FROM RANKING ASSOCIATIONS
1t remains to be considered what results may be
sonaby expected from act authorizing the orgauiza
on OF banking associations, such ae the Secretary pro-
posed in his last report.
The central idea or the proposed measure Is the esab.
hment of sound, uniform circulation. Of equal vauo
throughout the country upon the foundation Of national
credit combined with private capital.
Sch currency 1t is believed can be secured through
banking associations organized under national lesisa
ton
PROPOSITION TO MAKE THEN VOLUNTARY.
II Is proposed that these associations be entirely volun
tary ANY persous desrous Of employing real capital in
sufficient amounts, IL tho plan be adopted unite to-
gehcr under proper articles and having contributed the
requisite capital invest such part OF it, not less than
deposited these bonds with the proper officer OF the
United States can receive United States notes in such
money discounts and exchanges The stockholders OF
any existing banks can III like manner organize under
the act dranser by such degrees as may be found
convenient the capital OF the old to the OF the
associations The notes thus put into circulation will be
payable until resumption, in United States notes,
and after resumption in specie, by the association
which issues them demand, and IL not so paid
will be redeenabe at the Treasury OF the United
rity In the practical working OF tho plan, If sane
toued by Congress, redemption at ono or more OF the
groat commercial centres will probably be provided FOR
by all the associations which circulate the notes. and in
any assoc tion shall TAIL in such redemption the
Treasurer OF tho United states will probably under dis
authority pay the notes aud cancel the public
debt held as security.
rfE csEDrr or SUCH 4 CALCULATIONS
II difficult 10 of note circulation which
will combine higher local and general credit than this.
After lew years no other circulation would be used nor
could the issues Of the national circulation be easily in
creased beyond the legitimate demands of business.
Every dollar Of circulation would represent real capital,
actually invested in national stocks and the total amount
issued could always be easily and quickly accrtaned
they might not wholly remove the temptation 10 excess
sve issues would certainly reduce to the lowest poin
while the OF the notes the uniformity OF devices the
signatures of national officers, and the imprint OF the
tonal seal authsacatng the declaration borne on each
that Is secured by bonds which represent the faith and
capital of he whole country could not fail TO make every
note good 10 any part Of the world the best known
and best esteemed national securities.
The Secretary has already mentioned the support TO
public credit which may be expected from the proposed
associations The importance OF this point may excuse
some additional OBJ ervat ons
THE SECURITY NEEDED CONGRESS-
The organization proposed, If sanctioned by Congress-
security for circulation bonds the United
amount not less than $3.50 900 600 II may well be ex
pccted indeed, Since the calculation by uniformity in
credit and value and capacity OF quick and cheap trans
Iortaton will be likely TO be used more exten lively than
any hitherto issued that the demand for bonds will
largely overpass this limit should Congress see t to
restrict the privilege Of depost % the bonds known
five twenes authorized by the act OF last session. the
demand would probably ABSORB al Of tnat
already issued and make large room for steady
market for the bonds would thus be established and the
negotiations q them greatly Facilitated.
But II not in immediate results that the value Of this
support would be only chiefly sesn There are always
holders who desire ~ sell securities OF whatever kind II
buy crs are few uncertain the mar ket value must de-
cline. But the plan proposed would create constant
demand equalng and often exceeding the supply Thus
a steady uniformity in price would be maintained, and
generally al a somewhat above those OF bonds Of
equal credit but not available to banking associations II
easy to appreciate the iu benefits Of such coudi
tions 10 government obliged TO borrow.
Another advantage 70 be derived from such associations
would be found In the convenient agencies which they
would furnish for the deposit Of public moneys.
INTERFERENCE WITH THE INrEpENrENT TREASURY.
The secretary does not propose TO interfere with the
independent Treasury II may be advanntageonsy re-
tanned with the assistant treasures already established in
the important cites where the customs may be COL
lected in coin Treasury notes issued directly
by the government but not furnished u banking assoca
ti0nss
But whatever the advantages OF such arrangements in
the commercial cities in relation ocustoms seems clear
that the secured national circulation furnished TO the
bankp associations should be received everywhere