Daily Davenport Democrat. [volume] (Davenport, Iowa) 1864-1874, 1866-01-23

FlSASc!AL.-Currency matters continue
to engro>s the public attention, and the
protrac,ed uncertainty and suspense is tell
ing fearfully upon business, and transact
ions are virtually suspended until some
thing definite can be known Congress APP.
pears to hesitate about the pr"prlety of
clause authorizing q foreign loan, which all
practical men ,ega i me ely is one OF the
details of the bill, and evidently lacks the
disposition to discuss the great qnesl ion
upon which the bill is based, or to Exam
me into the effects of contraction upon the
conlmcrcili interests Of the country. II
the question is asked, or any allusion made
to it while the bill Is pending, We shall be
most dlsasreeably disappointed. The pos
poets are fair that il will pass. with somc
inniaierial amendment, and that Secct.iry
MeCulloch will enter at once ln.o the work
Of contraction. Ii ffc realize this belief,
we fear there is a gloomy prospect before
commercial men. 4 successful contraction
Of The currency is not only an impossbility
but an unsuccessful contraction, which will
embarrsss trade and all kinds Of industry,
is quite possible. The funding Of the com
pound interest notes as they mature would
be in the nature Of contraction Of the cur
rency which would be quite a much Is the
business Of the country could stand. The
law requires all the national banks Of the
country to keep certain surplus" and IRE
serve funds. Now the greater portion Of
these surplus funds aud much OF their re-
serves are invested in compound interest
notes. When the latter are Withdrawn, or
their legal tender character dest Dyed, as is
p, opposed by Mr.. Morrilrs bill, their place
must be supplied with plain legal tenders
or national bank notes. This would pro
Dice a stringency in the money throughout
the country which would occasion
some Inconvenience and perhaps lay
seine restrictions upon trade. Business
men would not, however, regard such
eontrationc with alarm, knowing that IN a
short time these notes must be called in
any how, il they were satisfied that the con
traction policy would be pushed no farther.
The great cause Of anxiety is the fact that
there is danger Of an attempt to call in a
large portion of the pl in legal tenders, or,
at any rate, the door will be lett open or
such an attempt. Now there is not one
business man out of ten who does not be.
lieve that such an attempt will cause disas.
ter and distress. The peculiar position in
which We are placed by the national bank
act does not seem to be understood or COM
sidered by those who are advocating COR
| traction. II the extent of the contraction
were limited to the amount Of government
issues actually withdrawn, the matter might
be controlled, and conducted in such man
ner as TO cause no serious disturbance But
it will not stop here The moment the
la,~l &c Il Al.
mcnt has commenced the withdrawal Of
notes, they will commence to call in tnei,
notes They have large issues out, which
| they will be called upon 10 redeem for more
than they received for them, il the con.
traction policy Is carried on to any extent,
a-d will spare no effort to call them in be-
fore the medium in which they are redeem
able appreciates greatly in value. In this
manner the withdrawal of 500, 600. 900 in
egal'enders might lead to the wi,hdraw wal
Of perhaps greater sum o! national bank
notes. Simultaneously with this, the banks
would be lid upon for additional securities,
or the people lose confidence in them, and
not few would be seriously embarrassed.
The result would be an ut er demora izaticn
Of our currency matters, aud sevese finan.
cial trial, marked by serious distress and
depression in business. II may bc well
enough for congress TO authorize the fund
ing Of the compound interest notes. but il
should also provide that not dollar Of the
I lain legal tenders should be Withdrawn,
either directly. or indirectly, by the finsn>
cial officers Of the government, This would
relieve the country from its anxiety, and
give business men heart and confidence. 4
Chicago Times. M