Daily State sentinel. [volume] (Indianapolis, Ind.) 1861-1865, 1865-10-13
Con traction.

The general expectation that the funding OF
the fifty millions, recently announced by the
Secretary OF the Treasury, would lead to a con
traction OF the currency, has produced this effect
| in anticipation OF any such result from the pro
cess of conversion. IL is propable that the nat
ursl effect Of the change if il had not been pub
| licly heralded. would scarcely have been felt.
even in financial circles The certificates OF in-
debtedness. to which the order was extended,
have never circulated money and might all
| be Withdrawn without leading to any controe.
| ton. The compound interest notes did circulate
freely at frst. aud even after several months in
tsrest had accumulated upon them they we're
paid out by individuals and banks in preference
to tho ordinary green6acks, which were held in
| higher estimvtion. OF late, however, they have
| been boarded, and the stronger banks have picked
| them up and laid them by as an investment The
Secretary offers to receive them at par, and al
| low all the accumulated interest at the com
pound rate, but charges premium of three per
cent. on the bonds given in exchange 1t is
easy to see that but few of these notes will DO
actually withdrawn from circulation, as most of
them at rest in the banks or in private
vaults. go far they form part of banks
reserve they must be replaced by ether notes,
but the volume Of currency will not be materially
affected.
But the influence upon the market is quito as
great as if the whole fifty million were actually
called for out OF the currency in daily use. To
deepen this impression IL is confidently asserted
by many that this is the commencement of
policy oil contraction which lie 10 DO pursued until
the volume Of paper money is reduced to the old
limit. We have little hope of such healthful
movement. Ii requires more courage than can
be expected from the political leaders of any
party. Nor do We see any indications OF an
intention on the part OF the people to insist upon
the experiment On the contrary, the most
noted OF those who have heretofore dictated the
public financial policy openly avow their deter
mination 10 maintain the extreme limit Of expan-
sion and If possible 10 increase the paper issues
IL will not do now to say that only in a state
OF war could the country endure such prodigi-
Gus volume of paper money. This was about
the only serious mistake which the Uonserya-
tives made in their estimate Of the effect of these
issues. They held that a redundant currency
would accumulate unused and could not be
forced upon the people They now see that an
expansion has no such natural limit The mar
ket will adapt itself to any amount OF issue and
the moment the equilibrium is restored each
addition is as welcome as the first. and is no
more felt as surplusage.
Before the war the ordinary limit of paper cir
ouation was three hundred million dollars Now
we have nearly one thousand millions. and if
this were doubled. there would soon be no visi.
BILE redundancy. The effect of an expanded cur
rency Is not seen in the piling up of superhuous
notes, but in the unnatural imitation OF prices
and the unhealthy excitement which follows it,
like an intoxicating draught. into every part of
the system Those who fatter themselves that
a further expansion. by the authority of Con
gress, is impossible because Of the great album
dance OF the issue now flooding the country. will
sosn discover their mistake il the experiment is
tried. Ihey minister - a thirst that will never
be satiated by any such supply, they increase
the hunger which grows with the service, and
will never be satisfied.
There are cue hundred millions of tho new
National Bank notes still TO be issued and dis
trioutsd. III no more are authorized by national
legislation. that will be the limit of the erpan-
Sion. Could tue expenses of the Treasury be re.
duced. a moderate contraction might be steadily
pursued by creating SEking Fund out OF the
surplus receipts OF public revenue We have
reason TO believe that this will De the policy pur-
sued by the Secretary in his forthcoming report
This cannot give very sharp contraction, siuce
the amount to be spared must be limited Con
gress will doubtless authorize the funding of any
OF the paper issues as soon as the surplus will |
warrant it; but If the Secretary we're ever so
much disposed. he could not reduce the currency,
except he has an excess of revenue TO spare for |
THAI purpose The effort to make a loan 10 any
extent for the sake Of contraction would defeat
ltself, as the moment II Was announced. the re-
latve value of the notes ana bonds would change. /
and the conversion would cease to be profitable |
The utmost which We can hope is, that no fur |
ther expansion will be authorized aud the policy /
OF applying all the revenue above that which Is /
absolutely necessary 10 an economical adniuis-
trauon OF the Government will be steadily pur-
sued.-New York Journal OF Commerce
~ The Day OF Judgment is coming. LIS
sEus G. BERRr has JUS. recovered a judgment.
IN the Supreme Court at Poughkespsie. for
$500, asains, he United States Marshal for ills-
gal arrest and Imprisonment in 1862 There is !
4 lively time ahead for the Stantons and But |
lsu
eE- General Hardee. of the late Confederate
army, was the recipient. in Mobile. the other |
day, Of handsome compliment. in the shape of /
4 tluuor fandared him nv ssvar.1 Of fka