The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1867-02-27
DAILY PRESS.
PORTLAND.
Wednesday Morning, February 27, 1867.

Wednesday Morning, February 27, 1867.
- -
Payment Of Conpound-InserestN Notes.
The currency question came up in CONGRESS-
last week, and we are gratified to be able TO
report that the infiationists were defeated
The pleasure is rather unexpected because the
Tribune had represented the matter quite DIFF
ferently and INDUCED in some exceedingly
loud defamation about it. We take our ac-
count from the official report in the Congress
sional Globe. The debate sprung up upon
| the bill introduced by Mr.. Hooper of Massa-
| chusetts, to provide ways and means for the
| payment Of compound interest notes. The
bill consisted of two sections The first di-
rected the Secretary Of the Treasury to re-
ceive on deposit compound interest notes,
with the accrued interest, as a temporary loan,
and to issue therefor certificates bearing inter-
est at rate not exceeding three and sixty-five
| hundredths per cent. per annum, principal
and interest payable in lawful money on de-
mand; these certificates to constitute part
of the reserve provided for i'm the act to pro-
vide national currency, provided, that not
less than two-fifths of the entire reserve of
the banks consist of lawful money of the
United States; and provided further, that the
amount OF such temporary certificates at any
| time outstanding shall not exceed $780, ,O0O,-
600. The second section prohibited the Sec
retary of the Treasury from retiring and can
| ceiling any of the United States notes com
monty called "greenbacks" during the current
year.
MIR. Stevens Of Pennsylvania moved to
| amend the bill SO as to make the first section
read as follows:
| That the Secretary of the Treasury is hereby
authorized and directed to redeem the com
pound-lnterest notes, with the accrued inter
| est, and to issue therefor United States legal
tender notes.
Mr.. Lynch of Maine offered the following
substitute for Mr.. Stevens's amendment:
That the Secretary of the Treasury is hereby
authorized and directed to issue, in addition to
the amount now authorized by law S100, ,000,-
| 600 OF such United States notes as are author
| ized by section one of an act to authorize the
issue of United States notes, &C., approved
|
in payment of compound-interest notes, and
for ho other purpose, until all of such notes
| shall have been redeemed; and the Secretary
OF the Treasury shall SO redeem the same as
they shall be presented at the Treasury of the
| United States.
Mr.. Lynch explained the bearing of his
amendment briefly but very clearly, as fol
lowy
MIR. Speaker, section thirty-one Of the ma
tlonal currency act provides:
That every association in the cities hereinaf-
| ter named shall, at all times, have OH hand in
lawful money of the United States an amount
equal to at least twenty-five per cent of the
aggregate amount of its notes in circulation and
its deposits, and every other association shall
have fifteen per cent.
That twenty-five per cent. and fifteen per
cent. of lawful money which the national
banks are required to keep as reserve
amounts at the present time to something
over two hundred million dollars, 100000
0OO of which is held in compound interest
notes. Sir, am told by the Comptroller O
the currency about ninety million dollars are
returned, but there is mixed in the returns
according to the estimate, about ten million
dollars more.
Now, within the present fiscal year the
compound-interest notes mature and are to
be paid, and they amount, with the interest
| added, to S17O,OOOOO0. l suppose that with
the exception of the $100,0OO0O0 held by the
| banks the others are out OF circulation and
are held as investments. So that retiring
the seventy millions assumed to be held by
individuals would not contract the currency
while the $1OO,0OO,000 which are held by the
| banks as reserve must be replaced by $780,
000,s00 of legal tenders Withdrawn fIom cir
culatiel.
As Lsss been stated to-day, the Secretary of
the Treasury Is authorized TO Withdraw "a )
| 900 per month, or $4S,000000 in the
course of a year, and in addition to that the
banks will have to supply the place of these
compound interest notes now held as re-
serve, which will withdraw 500, 900, 900 more,
making $14S, 5000, 900 in a single year. Now, /
take it any business man knows we could not
stand any such contraction as that, and hence
this bill is reported by the Committee on
Ways and Means for the substitution of
Sl00,O00,O00 for that amount OF compound
interest notes to be taken from the banks as
a reserve of lawful money.
Now, look at the effect OF it. Here are $780,
| 100000 of three per cent. notes made, for
what? As the gentleman from Iowa well said
to take the place of lawful money and redeem
the obligations of the banks Every gentle
man knows that without reserve of lawful
money tsey cannot redeem their obligations
when presented But gentlemen say these
bonds are on demand and they can be carried
back to the Treasury and exchanged for S10O,-
100000. True, but the Government in the
mean time is not only paying three per cent.
on this S1OO,OOO,OOO but hOloing S10OOO0,0OO
Of currency in the Treasury with which to re-
| deem these demand bonds
| Now, what is the proposition of the gentle
man from Pennsylvania 1t is to issue Legal
tender notes to the full amount of these COM
pound-interest notes. 1t goes very much fur
ther than any other proposition which has
been made here. 1t proposes that we shall
not only provide for these $100,000,000 ot
compound-interest notes, which would be no
initiation of the currency, but simply substi-
tuition by the banks OF legal-tender notes ior
the compound-interest notes now held in re-
serve by them; but that the other $70000,OOO
of compound interest notes not held by the
banks, but by private individuals, shall be re-
placed by legal-tender notes which are to go
Immediately into circulation. We therefore,
by the provisions of this bill, If amended as
the gentleman proposes, not only forbid the
contraction of S4,O00,000 of the currency per
month, now authorized by law, but we in
crease the present circulation by $4,000, 900.
am not prepared to support any such propo-
sition
Now the plan proposed would replace the
S100,000,00O of compound-interest notes by
| legal tenders, instead of by these interest
bearing demand bonds provided for by the
first section of this bill, thus saving to the
Government not only the interest on the
bonds, but also upon whatever amount the
Secretary of the Treasury would be obliged
to hold with which to redeem them when pre-
sented. This would be neither imitation nor
contraction but would leave the amount in
circulation precisely the same as at present.
1t is said by gentlemen that the banks would
use their reserve if all in United States notes,
but they have one hundred millions Of such
notes under this bill and one hundred millions
of the proposed bonds payable on demand, for
which they can at any time obtain United
States notes at the Treasury. There is no
protection whatever against the banks using
their reserve by issuing bonds payable ON de-
mand instead of United States notes.
Mr.. Stevens-I will modify my amendment
by limiting the amount 20 $l0O,000,000, and
providing that the notes so issued shall beaI
no interest.
Mr.. Lynch-As that is exactly my own
proposition of course shall not object to it.
After considerable debate, Mr.. Stevens's
amendment as modified, was adopted by q
vote of 80 10 5S-Messrs. Perham and Lynch
of this State voting for the amendment and
Messrs. Blaine, Rice and Pike against it. On