The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-01-01
FINANCIAL AND CONNER ClAL.

SUNDAY, Dec. 81, 1865
The eventfu year now the eve Of dissolution aud
which opened gloom amid the clash Of arms, closes
in peace with only party passions to disturb the calm
after the terrible conflict Sec esson aud slavery have
been buried In the grave and from their ruins
che cry for reconstruction itself the great political ques
Sion Of the time and national politics, national finances
and the interests Of trade intimately associated
Hhat Is also great commercial and financial question
In order to secure in their entirety the objects for which
fought must have practical solution of this pro
bsm. The whole North, the whole South and every
IN the country who pays tax, directly indirectly in
teresed in speedy restoration Of tho cxsavc States 70
condition the normal the altered character
OF their labor system will allow. The redeyelopment Of
tho Of the South necessary the final
person OF the from the exhausng effects Of the
war, and 1t will throw open OF national
wealth which cannot fail In the Of few years TO
turn the foreign exchanges favor and largely assist
tho resumption Of specie payments The present years
cotton crop Is varousy estimated at from four hundred
thousand to three uarters OF million Of bales, which
contrasts dscourAgngy with tho bountfu crops from
1857 TO 1851
The Secretary of the Treasury has expressed com
mendabe sire TO return TO q hard cash basis soon
practicable, and he has cordial support; but he
cannot fail that the day OF resumption is remote
and that will probably take ton years TO ach eve the
desired result, notwithstanding our improved condition
and prospects, and the large receipts for internal
nue. those for the last fiscal year having aggregated
SILL 100, $50, against SIG $50 o72 the previous
year The receipts for duties also large,
the total for the last fiscal year being $S4 92s eco
or nearly seventeen millions than the annua!
interest on the present gold bearing debt which Is
sos, 032 275. The reeepts from both these sources
for the six months ending with yesterday
still lraie INT hcI
Mr. McCuloch estimated for deficiency In the present
ca year Of SIP 1874 947 He, however, stated during
his recent visit TO this city that he should probably not
require to upon the market for loan during the
FISCAL year ending with June next His ability will be
faxed TO the utmost to provide for the redemption OF
hearty twelve hundred millions Of securities maturing
purinx little more than the next two years. Eight
hundred and thirty millions of these seven.ihirty
potes, which convertible into currency six per
rent bonds at the option OF the holders The policy OF
the Secretary looks the funding Of these advance OF
their maturity by allowing the accrued interest
and stimulating by easy money market the
prce OF the bonds already outstanding For
this purpose he asks in his report for auho.
rity to issue bonds bearing not more than six
per cent interest He further recommends that he he
authorized to sell in his discretion bonds Of similar
character to meet any deficiency for the present fiscal
year. to reduce the temporary loan by such
as he may deem advisable to nay the certificates of in
debtedness they mature and also to take any por
ton OF the debt maturing prior to 1859 thar be ad
vanagcousy retired" He goes TO say that it is not
probable that 1t will be advisable even If it could be
DONE without pressing them upon the market to sell
much larger amount OF bonds within the present the
next fiscal year than will be necessary meet any de.
nciency OF the Treasury to pay the ras due and maur
ing obligations Of the government and part Of the
e.f lam naI 20
the compound interest notes aud United States
notes sufficient to bring back the business Of the
country to health condition. The Secretary assumes
thai latter would he the in the Of
ton but the grounds for such assumption by
clear Elsewhere he remarks :'sNor need there
be any apprehension that reduction Of the currency
unless II be violent one-wi injurously affect real
prosperity" Real prosperity would be the first TO feel
the shock arising from the consequences Of premature
contraction and contraction under present circumstances
you'd be premature just further currency
injurious The government caunot afford to
tract its own issues to any material extent
FOR the next two three years, neither is IL
desirable that should do So but the national banking
system will meanwhile DO powerful engine of imitation
About hundred and thirty eight millions Of national
bank have been already issued, and the remaining
portion OF the authorized thr hundred millions being
poured out nj average rate Of than four millions
per wock while the Comptroller OF the Currency
nends Congress authorize another hundred millions
of the Same bank paper
This national banking system is becoming serious
bat ona evil and of itself will do much to retard tho
ultimate return to specie psym, ntsan event which will
bot unlikely DO sgnallzcd by the failure of large
brity OF the institutions formed under the
sew law. The the national bank issues
the greater will be the danger attending the contraction
60 ke p us a reserve . largs percentage OF ,s Liabilities
in legal tenders well TO redeem all its notes in
legal tenders on demand On the Both Of last month
there In circulation exclusive OF SO 1917 In
fractional currency, only 500 43s In legal tender
notes and OF these sl9s. 0s2 interest bearing
leaving $428 TAI 800 free TO circulate without, being
boarded for their interest Now, supposng the
national bank currency increased 10 four hundred
millions, there is little doubt will be
how the government contract Its own Is
sues materially without imperlling the safety of
the national banks In which their notes payable
pr senatious Unless United notes considerably
exceed the national bank notes int, how all
the national banks maintain the necessary and
be prepared redeem their In legal tender when
demandeds whenever such q danger threatened there
would not be wanting spectators who would buy up at
discount the Of bsnk after hank In
largo amount and presenting them all at for pay
mont at the banks force them into liquidation relying
upon the sale Of the bonds deposited with the Treasury
o. security for the notes for reimbursement This would
force the notes OF all but few OF the strongest the
country banks discount and general dstrus,
which might evenuase npanie The note brokers would
thrive by buying up the notes at discount and do
mandns legal tender os liquidation, but The people and
ths Treasury would suffer, the National Banking at
being OF the foundation stones Of present imam
nai system.
Does Mr. NcCuioch take this into consideration whom
10 talks Of contraction Does no remember the
ion OF commercial revulsons which overlook England
ftsr Waterloo In her efforts TO lcgisate spe
te pa "nentsf A historian Of tho times ays-
tiPricc e. q sudden to n runous extent; banks
broke fell with the prices Of manufacturos and