Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1863-02-19


# The object of the proposed Measure is to ena-
It bic the government to avail itself Of iis whole
credit for the purposes Of the war, ard in such a
2 manEer as may reduce tha present redundant
currency within reasonable limits. Ia discuss
ing the fitness of this scheme for the ends de-
1 signed 70 be Effected it may be well to refer 20
: our past financial history, and to the system
) hitherto adopted. By an act passed in Mont
; gOmery, and approved on the -- day ct --
D -, the Secretary Of the Treasury was author
f lied to issue - millions Of treasury notes, re-
ceivable in payment of public dues, and bsar
ing no interest, but with provision that the
! holder might fund them at his pleasure IN
bond isaring eight per cent. interest The acs
also contained q section allowing the holder Of
the treasury notes to convert them into boEd8
bearing interest, and recoavertsbie at his pleas
, provision was to enable the government TO oh.
tain the use of tho floating capital, which in
bank returns usually figures under the head of
deposits. These deposits were attracted TO the
treasury, because interest was paid OH them
until Withdrawn by the holder of thu call GER
tihcate," and because he could reconvert that
certificate into currency at his pleasure. The
objects of the other funding provision in the act
were first TO borrow without interest such a
sum as could be kept in circulation through the
demand Of the country for currency and sec
ondly, when these notes had been issued in ex-
cess Of that demand 70 borrow that excess in
the hands Of the holders, By enabling them TO
convert it into treasury bonds, payable at the
end OF - years, and bearing eight per cent.
interest per snnum. Had the government been
able TO pay the interest on the bonds in specie,
! and had such a system of taxation been adopted
as would have provided ths means for ths,
and also for paying the expenses Of the govern
ment other than those mada necessary by tn .
war, it is probable that the purposes of This !
al I 49,.
The only dangers to which this system was
exposed, were those arising from the chances Of
war, which might effect the faith of The public
in the ultimate solveney of the government. |
/ There is little doubt but that certain amount I
of paper currency can be kept sAoat even at g
specie par, by the mere demand for It as a crcu-
| la6ng medium. Within certain limits the
amount Of that currency depends upon the por- /
ton of the field Of circulation hold in it, posses
SION But no. man cav ascertain beforehand I
what IS the precise extent of that amount. I5 is |
obvious, too, that if the currency should be is /
sued in excess of that amount a depreciation In /
/ its value must ensUe, and depreciation in pro
portion to that excess To guard against any
undue depreciation arising from this cause, il /
was provided that the holder might fund these
notes at his pleasure in a government bond
payable at the erd of - years and bearing
eight per cent interest. The value of The note
then could not fall far below the value of this
bond. If such a bond were worth specie bar.
the note would have the same value. If it were
worth only ninety per cent, as compared with
gold, such would be the value Of the currency
Had the interest been cons tantly paid in speeie,
the bond probably would have been worth
nearly as much ss specie, and this selfs6iusting
balance between the note and the bond would
have made our currency a reasonable. steady
and certain standard Of value. OF course, the
steadiness of value in the bond might be dis
turbed, either by the chances of waT, or by an
issue of these securities beyond the amount of
losnsble capital IN the country The frat risk
was inevitable, the second could be avoided BY
very little prudence aud foresight
Unhsppily, the interest on these bonds has
been paid, not in specie, but in treasury notes.
and consequently both nave deprecated toreth-
er not perhaps ia the same ratio. but so nearly
in the same degree that the one has proved to be
a very imperfect chsck upon the excessive issus
Of the other.
If. thea, we eau no longer FIX the value qrrng
bond by its relations 30 5y0Oiei tne next oest ,
thing to de would seem 20 be TO fix. if possible,
the amount of treasury notes to be Issued in the
shape of currency. We cannot ascertain the
precise amount Of treasury notes which cOui
be kept at specie par, but we can probably ap-
proximate the ameEnt so nearly IS to prevent
any dangerous depreciation in the currency. IF
the issue could be thus restricted, the valae Of.
the bond would De lNcIaisalr Dec18Se 6la F2lue
of the interest received for them would DO raised.
The evils, too, arisiag from q currency undaly
deprecated would be avoided, and before very
long the expenses of the government woald bs
diminished more than one-half because puce5
would fall in that ratio. If the entire issue of
currency notes " had not exceeded Sl50000
OOO instead of reaching the amount Of $780,
600 900, or something near it, the estimates for
next years expenditures probably would not
l. da1 he tr1k efv
months For the supplies necessary for the
war, which constitute by far the gTeater partion
of these estimated expenses, probably would
not have cost half as much as they viii when
these prices are measured by the present inflated
standard of value. OF course, this assertion is
intended to be confined to such articles as have
preserved a constant proportion bstwesn the de-
nand and supply. The interest received By the
public creditor in that event would be worth
twice 81 much to him as it now is and the pub
lie would have escaped many evils yet to be
felt when the performance of contracts made
under these inflated prices shall be enforced. If
something is not done to reduce th3 volume Of
tha currency it viii eontinue to expand by
regular progression until 1t becomes utterly
worthless and the public credit is destroyed.
The Secretary of the Treasury estimates that
on the last day of December, 1862, there were
III cIreuiat.O1 $3.50. .U0UOUU In treasury notes,
bearing no interest, besides others bearing in
4
ton to this, there must be a large monthly IS
sue OF new notes for the snsuing year TO meet
the demands for the war He estimates the new
issue for the first six months Of the year at more
than 5000 600 600 It is manifest thsa, that un-
less we can provide some absorbent for this ex
cess Of eSrrency beyond our wants, Bankruptcy
stares Us IN the face. The FIRST step is to pro-
vide some means Of absorbing The $500 COS GOO i
of currency notes issued in the last year 70
~ Ieek n laf
declared that the privilege Of funding them in /
/ bonds bearing eight pes cent. interest should /
cease on the 22d Of April. 1853 and that after
that period they should bs convertible into /
/ bonds bearing seven per cent. interest To /
make the funding Of these notes stil more GER 1
tain the Secretary Of the Treasury has recon-
mended that we shall refuse to fluid them at all !
adopted ia the FIRST section Of the bill which IS
4 now reported to the senate. But the notes is /
sued, and to be issued during The present ysar,
4 viii probably be somewhat in excess OF tho |
legitimate demand Tor currency by the first Of
July, and must certainly be largely sH before
the conclusion of the ysar if some m5sus for
absorbing that excess should net 10 provided
/ Probably the best plan for eifecsing shis would
be to provide for raonthly issues, end to iqdRee,
or even faree the Holders 70 fund them at fixed
periods. BY such means tbs volume of tae
currency would remain the same during these
periods If for Instance We required only
monthly issue of S12, $50 600, aud he holders
were constrained 30 funG. them al the end Of the
year, then in each month Of the next year as
many would BE- funded as would be Issued dur
ing that month. The effect Of this would be
that the currency wonld neyer exceed, or fah
below $3.50, ,0O0,0O0 during succeeding years,
} and We should thus borrow Si50 000,00Q an
! nually through she agency of the treasury
: notes This, Ike an invisible tax collector
would enter every house, and gathering eontri-
! buttons from pencs as well as from poNud, would
make iss loaas from all capitals whether great
or SMALL 1t is because Che curfeHeY note is tha
most Convenient form Of borrowing money tnat
governments are too ap. to abuse its facilities,
until through the imitation Of prices the loans
become so exorbstant as TO destroy public credit
m is not to be supposed that the Congress- Of th1 Con,
iederste States with so many warnings 70 bs gathered
from history before their eyes, viii fa into Ike error
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