The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1866-03-19
Trouble in the Treasury Department.

tnent and counterstatement, nat cohtrauie-
tion in fact. between the Head of the Depart
mani and the Chief of one of the Bureaus
COMPTROLLER Clarke of the Currency bureau,
recommends shat the national currency act
he 40 amended as to allow an increase OF the
l;r,it IN fo,,r hundred millions OF dollars" on
certain conditions. The Secretary says, ON
the contrary, "The present law limits the cir
culation of the national banks to three hun
dred millions of dollars; and it is not probable,
when the business OF the country returns to
healthy basis, that larger paper circulation
than this will be required Indeed, 1t is doabi-
faI aohether larger bank note circulation can
be maintained on specie basis"
The divergence of views here indicated has
considerably widened. The loan bill propos-
ed by Secretary McCulloch incurred Mr..
Clarke's especial and open hostility. Mr.. Nc
Culloch has given no publicity to the dispute.
1t appears that ON the oath February he ad-
dressed letter to Mr.. Clarke and received the
following reply: w
3 TREASURY DEPARTMENT,
Id. -. - - February "A, 1866.
oeiyed and i'm reply have to say that am de-
c1dedly opposed to the loan bill for the follow
ing reasons oo SOC.
notes can be converted into compound interest
notes; and by the act OF March 3, 1885, certif-
Gates OF iniebtedness, compound interest notes
five per cent legal tender notes, and seven.
thirty treasury notes can be converted into
five-twenty bonds; and that portion of the tenn
porary loan that tits desirable should be paid
aa Taal from mn nny in AhA froa =ru
which suppose must be at this time, including
deposits in national banks, at least $150 900 0OO
and the amount that would be expedient to pay
would not be more than the amount OF the
increase of the deposit for the last few weeks,
and which the government has not had any
occasion to use. We have, therefore, full pow
ers to fund every dollar of the floating deb,
without any further legislation ON the subject
and no occasion for making any loan for any
purpose whatever. All can be done by simply
exchanging ona security for another, and can
be quietly done without essentially disturbing
the money market or the business of the coun-
try, the Secretary of the Treasury being tn.
Judge as to how far and how rapid the move
msntj in reference to conversions should pro-
coed. +.-4fl.f
think there is no doubt about the willing
ness OF the holders of the floating debt to con-
vert into 500 bonds to the extent that is desira
BILE, ii thu credit OF our securities is sustained
but if authority is gwen to put bonds upon the
market to almost an Unlimited amount aud to
sell at any price, as provided in the bill it would
in my view, cause such uncertainty in the pub
lie mind as to render it impossible to keep up
the price of the government securities. do
not think loan of $50,000O00 could be nego-
tiated without sinking the price of $50 bonds
below par, as the public would not know how
soon another $50 ,0O0-$500, 100000 or 81 Q00,-
100000 might be put upon the market. ~.
AS to the position in reference to foreign
loan it would, in my view, if carried into effect
be almost suicidal. If bonds are sold abroad,
the price would be based, of course, upon the
present currency rate Of exchange, consequent
ly the government would receive about $50 in
gold for each 500 in bonds, payable in gold
with semi-annual interest also payable in gold,
lin addition to exchange, commissions, &C.,
&C. And in addition, if the government should
sell its bonds abroad to the extent to affect the
price of gold-say 20 per cent.-it would lessen
to just that extent the net proceeds of the
bonds, and instead of $50 realize only $40 for
each 500 of bonds. Yours truly, - alt'ii /
This letter, Mr.. Clarke saw fit to publish,
merely emitting the formal address t the Sec
rotary of the Treasury. After an interval of
twelve days, Mr.. MeCulloch again addressed a
prioate letter to the Comptroller. To this Mr..
Clarke responds in long letter, full ofcharees
and specifications, and rushes again into print.
Mr. Clarke's charges are briefly as follows:
the condition of the treasury and of the pub
lie debt, Feb. 1, is "inexcusably erroneous" .
2. That none Of the monthly reports for
four months has shown the amount of money
In the treasury or on deposit in national re-
positories "within fifty millions of dollars"i |
8. That the report of Feb. 1, shows that
more than six millions IN compound interest
and legal tender notes have been RETIRED .
whereas the law authorized only the CONVEX
sion of legal tenders into compound interest
notes and of compound interast nntas into FIVE
twenty bonds, but confers "no right or author
ity to cancel them.n icl 81 a3 81 ufa .
4. That the same report discloses sales OF
nearly eleven millions , in fiye-twenties and
purchases of nearly twelve millions in seven
thirties, the law allowing conversion of sew
en-thirty notes into fve-twenty bonds, but
giving mo right whatever to buy or sell
them" I'd f....ri 4y.. Il. e-tl-..-..,. .i,5
Alter making such charges it would hardly
seem that Mr.. Clarke could do less than to re-
sign the position to which he was appointed
on the recommendation of the Secretary of the
Treasury. The declaration that in accept 70
ONCE, he did not surrender his Independence
OF Judgment" is not to be disputed. That an
angry quarrel in one of the Executive Depart
ments will injuriously affect the public inter-
estS, Is equally indisputable. If the Secretary
Is violating the laws, he should be removed;
but SO long as he is entrusted with the admin
istration OF important fairs, he should not
be embarrassed for lack OF cooperation on the
part fhis subordmates ' a..5lsl .-..-
1t is understood that Mr.. McCulloeh will
make no reply to Mr.. Clarke's letter, and ap-
parently he will have no occasion. The
House Committee of Ways and Means have
already appointed a subcommittee of three to
ascertain the ground of the disagree .ment, and
tner report shows that the Comptroller has
not only displayed bad temper and worse taste
but Is entirely mistaken in his statements re-
spectilg affairs which do not belong to his me-
culiar province. The tenure Of Mr. Clarke,s
Office becomes accordingly matter of some
interest. The question of removal is said to
have been discussed in the Cabinet, but pre-
sents some difficulties, inasmuch as the Comp
troller is appointed "by the President, on the
Recommendation of the Secretary of the
Treasury, by and with the advice and con-
sent OF the Senate" and holds his place "for
the term of five years, unless sooner removed
Dy the President, upon reasons to be commu-
"nlcated by him to the Senate.D rr
congress will undoubtedly sustain the Sec
rotary. The confidence of the House in his
poncy mas already been indicated by prompt
remsai TO entertain the proposition to enlarge
.ne volume OF banking currency. The conf
dence of the nation rests upon results already
nan''es'-tne steady appreciation of our pa
per m ,ney and the perceptible diminution of
the pubic debt, Mr.. Clarke will find If verv
hard to contend with facts like these.
a MAP MAKER In TRoUBLE-We coo :.