Green-Mountain freeman. [volume] (Montpelier, Vt.) 1844-1884, 1866-01-02
Repeating tho Legal Tender Act-New Is
sues of Bonds.

We have already expressed our views respect
ing what We should regard as violation of
he national faith b. repeal of any part of
the Legal Tender Act. Our remarks upon
this soboc: were occasioned by the intimstion
IN Secretary McCulioch's report that such q
repeal might be advisable at some future time,
as we'll as by bis recommendation that 50 Con
fgress declare that the compound interest notes
shall cease TO be legal tender from the day
LOT their maturity" We can but regard the
faith OF the government as pledged to keep ev-
lery thing &c has issued as legal tender as good
as lawful money. until it wishdraws it from
circulation and when IL wthdraws it, it can
burn it up, and thus destroy its character as a
leg al tender without the aid of legislation We
do not See why this faith Is not just as much
pledged in respect to the compound interest
notes. as IL respect to the notes not bearing ~
terest, tbs only difference being that III tie case
OF the Former the accrued interest Is not legal
tendsr, and they are payable at future day,
while the latter are payable on presentation.
1t 1t be competent or right or expedient for Con-
gress to declare that the compound interest
notes shall not be legal tender after they be-
came due, Congress must have the same right to
declare that the non-saterest bearing notes
which are due when issued, shall no longer be 4.
legal tender.
Nor do we see the necessity or policy of such
legislation, unless it be to diminish the value of
snese notes. 1t Ia, of course, entirely proper fol-
Congress 10 authorize the Secretary to put
loan upon the market, and to offer to exchange
that icss tor the notes; and unless the declara-
ton aaas those notes should not be legal len
dsr would have the effect of diminishing thei,
| va ue, this offer TO fund them would be more
ehectusl in withdrawing them from circulation
than the other method. The notes are now held
largely b. the national banks as the most desi
rable form of legal tender to keep in their vaults
but the banks would yet readily exchange them
on favorable terms tor fve-twenty six per cent.
bonus.
WHAT effect new loan would have upon the
price Of bonds already in the market remains to
be seen, although IL Is probable it would cause
aeclne III quotations; but # the currency con-
tractioz had The favorable fleet upon prices gen
orally, which tie Secretary anticipates, the ben
eft would be greater than the evil.
1t IS doubtful. however, whether We shall
reach sn immediate contraction OF the Gu re ncy
sufficient to materially affect prices, without
con>:de, 4ble d,clne in The price of government
see urisles certainly not il the contraction is
effected chiefly by borrowing money to redeem
the Legal Tenders. Ii has been estimated that
the retiring Of fifty millions of Legal Tenders IN
| October. by sale of bonds to that amount, de-
preciated the public securities, In comparison
with gold, more than fifty millions of dollars
The government is only borrower of money Oh
a gigantic scale, ard It's issue of bonds can be
inflated, we'll its issue of currency and
the law of supply and demand applies to one as
yell as to the other. 1t Is, therefore, of just as
| much importance TO the money values of the
untry, that the national debt which bears IN
terest should be contracted, that the Legal
Tenders should be Withdrawn ; though it is
donbtedly best 10 begin by a cJntrsctlon OF the
Legal TendeTs- We hope, however, to Con
gress adopt souie legislation which will enable
tha Treasury Depa, tment to begin ut once TO
pay, without borrowing, the federal debt This
viii enhance 1T once the value of all government
| bonds and Legal Tenders and thus increase the
wealth OF the country instead of really dimln-
ishlng It, as can but think will bs done by
the process of borrowing on Que side 30 pay on
apother.