The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-03-26
Contraction of the CuIrency-Mr. McCul-
lOch and Congress.


the defeat of his plans. The papermoney theo-
rists and the gambling spectators are all
against him. The former, falling TO distinguish
between the transient prosperity produced by
currency imitation and the true prosperity which
results from trade conducted on healthy basis,
refuse to vest IN the Secretary an authority
which may be exercised adversely to their
theory. The gam blers, who profit most when
most the country suffers are naturally anxious
TO Illustrate n policy designed to benefit honest
industry by putting down the wild spirit OF
speculation engendered by the lavish exDendi-
tures OF the war. These classes combined have
thus tar succeeded in keeping the question OF
national finance in condition OF dangerous
uncertainty.
Tie almost universal satisfaction created by
Mr.. McOullouch's Fort Wayne speech lett no
room tor misunderstanding OF the national
iulgmeut in regard to the solution OF the inan-
cGl problem. 1t was everywhere deemed for
tunate that the country had for its chief imam
Cai administrator one who Disseminated be-
tween the cXigences of the Treasury in time
of wa, and the cal requirements OF commerce
anu ntusry in period OF peace. The impress
sion was strengthened by the luminous discus
sioG of the subject In his report, presented at
the opening of the session. With clearness
which carried conviction, and thoroughuess
which covered the whole ground, Mr.. McCul-
loch in that document exposed the fictitious
character of much that is now called prosperity,
pointed out the dangers to which every import
ant interest is exposed by vast currency COM
posed of inconvertible paper, and dwelt upon
the necessity OF gradually but surely returning
to a specie basis. The soundness OF his reason
ing, and the wisdom of hls conclusion, few
ventured to impugn. The efficacy OF some OF
his suggestions might be called IN question.
But the expedieDcy of pushing forward the work
of currency contraction, cautiously and steadily,
was too obvious 10 be Controverted.
President JOhnson's utteranceS on the same
subject have afforded equal satisfaction. In a
~ trr nufn 10 40
of the American people in relation to paper
money. They want none of it, unless 1T be con-
vertble inro gold and silver. The Legal Tender
act they recognize as one of the necessities of
the war; the issue of inconvertible paper they
have Loyalty sustained as essential to the sup
preston OF the Rebellion; they are alive to the
difficulties which stand in the way OF the re-
sumption OF specie payments, and the dangers
that are Inseparable from hasLy and sweeping
measures; but they nevertheless demand that
the course OF Congress and OF the Treasury shall
proceed upon the principle OF contracting the
circulation or currency with view to the early
restoration of q specie standard The pretuest
bubbles which the advocates of imitation may be
able TO blow will have no effect upon this torn
of public opinion.
The blackest pictures which gamblers may
contrive to paint will not deter the people from
insisting upon the judicious prosecution of this
change and its consummation at the earliest
possible moment. The Inconvenience it entails
upon limited classes and special interests are all
nothing compared to that great national inte-
rest OF industry and trade, which will be bene-
fitted by the overthrow OF speculative values, and
the assimilation OF prices to The only standard
which IS compatible with the permanent main
tenanCe OF the public credit Whatever the
theorists imagine or the gamblers allege. the
people know that temporary duiness of trade,
and occasional injury to individual purses, are
preferable to the overwhelming ruin that will
be inevitable il no attempt be made to amend
the existing order of things.
To carry out his plans, however, Mr.. McCul-
1Oph Onp6s fhp aid nt Con and this ia IUiTh
held. The authority he seeks to give effect to
the views embodied in his Fort Wayne speech,
set forth at length in his annual report, indorsed
on more than one occasion by the President,
and accepted unequiyocally by the people, is
denied him. Why? Not because any consider
able number in the House favor perpetual incOn-
Ver,iblllty. Not because the theorists and infia-
tionists are inf the ascendancy. Not because
the are gambling spectators who dare rise IN
their places, and openly contend that unsound
prices and unWhoiesome uncertainty shall pre-
vail, that an insignificant class may retrieve
their losses or rswell their gains. Why, then, is
MIR. McCulloch thwarted, and his effort TO lm-
part fixed direction 10 finance and trade para
lyZed? The answer vouchsafed TO US is that it
is not safe to ntTust to the present or any other
Secretary OF the Treasury the power that would
be conferred bv the Loan bill as originally re-
ported. But little examination OF the debates
upon the subject shows that this, the avowed,
is not the real reason. For that, we must search
in the objections to the details of the measure,
the controlling opposition to which proceeds
from hostility to any scheme Of contraction
which shall provide for the calling in OF any
portion OF the misunderstanding notes.
Take the total amount OF circulation, roundly
speaking, at nine hundred millions, Of which
four hundred and fifty millions are in non-bear-
ing interest notes. one hundred and eighty mill
lions compound interest notes, and two hundred
and sixty millions in National Bank currency,
the last item being susceptible of increase to
three hundred millions. Mr.. McCulloch ASKS
discretionary power to fund the compound in.
terest notes and one hundred millions Of the old
greenbaCks, his hypothesis being that the
gradual absorption OF these amounts will as
gradually reduce the rate of discount to which
the currency is now subject, the completion of
the absorbing process and the appreciation of
currency to the gold standard being expected to
occur at about the same time. On the other
hand, the more conservative opponents OF Mr..
McCulloch propose to limit his power to con-
tract to the compound interest notes alone;
while certain of the radicals resist all cOntrac-
tion, and urge the issue of legal-tendef non-in-
terest-bearing notes TO provide for the redemp.
tion OF those carrying compound interest
As to the extent OF the contraction contem-
plated by Mr.. MCCulloch, it is not easy to see
how 1t could be less If the contraction aimed at
be genuine, and not a sham. The object being
to restore the currency to a specie standard-in
other words, TO make currency and gold equal
in Nalue-it is evident that the hundred millions
OF greenbacks to be absorbed In the process are
not an excessive proportion of the amount TO be
operated upon. Approximately speaking, they
form but about one-seventh OF the amount now
in circulation; and surely the withdrawal o.
be to raise TO par the value OF the remaining SIX
seyenths The funding of the compound inte
rest notes cannot possibly affect the money
market, inasmuch as they are already held no
as currency IN circulation, but as securities
awaiting their maturity. Nor viii the with
uyaI "a a bundrad millions of prepnhaclSs in