The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1865-12-12

HON. HUGH MscuI2ocH,
The State Of the Finances
FOR THE YEAR 1885, ENDING DEc.l.
Treasury DEPARTMENT,

FOR THE YEAR 1885, ENDING DEC. !.
TREASURY DEPARTMENT,
Yah WASHINGTON, December A, 1863.
To Hon 8. Copar, Speaker Of the House O
Representatives:
SIR:--In conformity with law, the Secreta
~ Of the Treasury has tho honor to. submit to
Congress his annual report
Next in importance TO the great question:
involved IN the restoration Of The Federal au
thority over the Southern States, and the re
establishment Of civil government therein
under the Constitution, are the inanciaiques
p0 Tss sTorss1ngI ,sI1MAdH
The Public Debt and =.
The Revenue; tteitsE
all of which demand the early and careful at
tention of Congress.
- In presenting these important subjects, with
their various connections. the Secretary is
painfully conscious of his own inability prop
erly to discuss them, difficult as they are, and
involving as they do the national honor and
the pecuniary interests of thirty millions OF
people. He will. however. offer as clearly
as he can his own views in relation to them,
not doubling that Congress will sustain and
carry out, by appropriate legisiation, those
that are approved by their superior wisdom,
anu reject those winch are regarded as eltHel
impracticable or unsound. =
The fact that means have been raised, with
out foreign loans, to meet the expenses of a
protracted and very costly war, is evidence
not only of the great resources of the coun-
try, but of the wisdom of Congress in passing
the necessary laws, and Of the distinguished
ability Of the immediate predecessors of the
present Secretary in administering them. 1t
is hardly necessary to suggest, however, that
the legislation which was proper and wise
during the progress of hostilities may not be
appropriate or even justifable in time OF
peace.
THE LEGAL TENDER ACT.
The secretary thinks that the legal tender
act ought not TO remain in force one day long
er than shall be necessary to enable the peo-
pie to prepare for return to the constitution
al currency.
The reasons which are sometimes urged in
favor of United States notes as permanent
currency, are, the saving of interest and their
perfect safety and uniform value.
The objections to such policy are. that
the paper circulation of the country should
be flexible, increasing and decreasing accord
ing to the requirements of legitimate husi-
ness, while, If furnished by the Government,
it would be quite likely to be governed by the
necessities of the Treasury or the interests of
parties, rather than the demands of commerce
and trade Besides, permanent Govern
ment currency would be greatly in the way OF
public economy, and would give to the party
IN possession of the Government q power
which there might be strong temptations to
use for other purposes than the public good
keeping the question of the currency con-
stantly before the people as a political ques-
ton, than which few things would be more
injurious 10 business.
But the great and insuperabe objections, as
already stated, to the direct issue Of notes by
the Government. as policy. is the fact that
the Government Of the United States is one
of limited and defined powers, and that the
authority 10 issue notes as money il neither
expressly given to Congress by the Constitu-
ton. nor fairly to be inferred, except as a
measure Of necessity in great national ext
gency. No consideration OF q mere pecu-
mary character should induce an exercise by
Congress of powers not clearly contemplated
by the instrument upon which our political
fabric was established. The Government, in
she great contest which has been recently
closed, has not sought to increase its powers.
nor to interfere with the rightful powers OF
The States. The questions decided by the
var are, that the Union is indissoluble: that
whatever is essentially opposed to it must be
removed that the Federal authority, within
Its proper sphere, is supreme; aud that the
Eahdlty o. acts of Congress is not to be de
termined by the States, but by that tribuna
which the complex character of the Govern
ment made a necessity. 1t is the browning
glory Of The Constitution that this great wal
has been waged and closed without the pow
ers OF the Government being enlarged or it.
relations 10 the States being changed.
LEGAL. TENDERS SHOULD BE RETIRED.
In speaking OF the legal tender acts, refer
ence has only been made to those which au
thorized the issue of United States notes
The interest bearing notes which are a lega
tender for their face value were intended t.
be security rather than o circulating medi
am. and 1t would be neither injurious to tn.
public, nor an act of bad faith to the holders
for Congress to declare that after their matur
ity, they shall cease to be q legal tender
while such declaration would aid the Gov
eminent in its efforts to retire them, and i
therefore recommended.
The rapidity with which the Governmen,
notes can be withdrawn will depend upon tn,
ability OF the Secretary to dispose Of seeuri
Ties. The influences of funding upon TIL
money market will sufficiently prevent thei
too rapid withdrawal The Secretary, how
ever, believes that decided movement to
wards contraction of the currency IS no
only public necessity, but that it will speed
NY dissipate the apprehension which yer,
generally exists, that the effect of such ,
poiicy must necessarily be to make none,
scarce and 10 diminish the prosperity of tn,
country.
It's well established fact. which bas No
escaped the attention Of all observers tina
the demand for money increases tby reaso,
OF al advance of prices) with the supply. nm,
that this demand is not untreouent
most pressing when the volume of carrenc
!, IS the largest and initiation has reached IN
eliminating point Money being an unpro6,
able article to hold, very little is Withheld
from active use. and in proportion to its in
crease prices advance on the other hand.
reduction of it reduces prices, and as nr;ce
are reduced the demand for it falls off. $
that, paradoxical as it may seem. a d;minu
non OF the currency may increase the sunni
of it ), $500 supp
coTRAcrlos OF THE CURRENCY.
Nor need there be any apprehension that
reduction of the currency-unless il he q ",
lent one-will injuriously affect real nrosner
ty. Labor is the great source of nation,
wealth, and industry invariably declines on q
inflated currency. The value of money 4.
peUds upon the manner in which il Is used
1t stimulates productive industry, it is bene
ut III on the other hand it diminisbes Il
dustry, and to the extent to which il dim;nsl
es 1t, 1t is an evil. Even to the form Of n
precious metals, it may not prove tn ha vaolt