The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-11-27
THE FINANCES.
Important Statement Of the Views of
Chtef Justice ChAne.

Ahlerests OF the country, 1t is important to bring
10 Hght the judgments and opinions of those
whose past experience, official positions, and
recognized ability In financial matters give
weight to their views on the leading questions
OF the hour, yiz.-those relating to the public
that the country would regard with special
interest the views of Chief Justice
Chase on these questions, your correspondent
has taken occasion to consult him on one or
two points, of course leaving many portions OF
the general subject untouched, which, IL
clucidated with equal clearness, would doubt
less prove of great interest at the present juno
ture. The work of Secretary Chase, though it
is generally conceded among intelligent men to
have been conducted with an ability exceeding
that which characterized any other phase of
our war history, has not been generally under
stood. II may be stated under three heads:-
l. To establish satisfactory relations between
the public credit and the productive industry of
the country-in other words to obtain supplies.
The suspension of the baDk ks put an end TO the
first and most obvious resort, loans of gold, and
made new methods indispensable. Then the
Secretary resOrted to legal-tender notes, made
them cuTrency, and borrowed them as cash.
The patriotism OF the people came in aid of the
labors of the Treasury and the legislation of
Congress, and the first great object was made
II. To provide against disastrous results on a
return OF peace. This could only be done by
providing q national currency There were
about 1900 State banks in existence, which
wanted to make their own paper the currency
of the country. This the Secretary resisted, and
confined his loans TO greenbacks; but he did not
drive out their currency, nor indeed did he
think 1t exactly honest to so deprive them OF it,
without giving any equivalent To neutraize
their opposition to national currency and
make them allies as far as possible instead of
enemies, in his eudeaYors to secure such re-
suits he proposed the national banking system
and before he left the department. its success
was assured.
The national banks were certain to be useful
in many WaVs. mt tbp Spcrptarvjs main ohiact
was the establishment OF national currency.
This, Mr.. Chase remarked, saved us from panic
and revulsion at the end OF the war, and Is of
inestimable value TO men of labor and men of
business-indeed, to every class.
III. The third division of his labor was to pro-
vide funding system. 1t was unavoidable
during the Rebellion that every means of credit
should be used. He borrowed money every way
he could at reasonable rates. The form that
suited one lender did not suit another; and the
army and navy needed every dollar that co I'D
be raised in any form, Hence temporary loans
certificates OF deposit, certificates of indebted
ness, 7'30 notes, compound interest notes, Trea-
sury notes payable after one and two years, ETC.
But 1t was necessary to have funding loans
into which all these temporary loans could be
ultimately merged. To this end the Secretary
established the 500 loan and the l9-40 loan His
belief was that after the S5I4 900 900 of the $40
loan had been TAKEN the additional amounts
needed could be obtained by the l0-40 loan and
the temporary loans; but the Secretary was ready
to resort 70 the 6-20s in case OF emergency. He
did get $73 900, 900 in the 10-40 oan and his sue
cessors got about Sl20, 600, 900 more, at par And
MI. G. has never been able to see any good reason
for making the 7'30 notes subsequently issued
convertible, at the holders option, into 5-20s
instead of 10 40s. Lenders, Of course, pre-
terred the former, bearng 6 per cent. in gold
to the latter, bearing only five per cent; and
lenders were rather more favored after he left
the Department than beforehand so, indeed
were brokers, for Mr.. Jay Cooke got nearly or
quite twice as large commissions under Fessen-
den and McCulloch as Secretary Chase allowed
him.
It is easy to see how Mr.. Chase's funding sys-
tenn worked, by examining the last statement of
the public debt The condition is something
like this: = 81, 200, 100000 5;2Os; $20O,0OO, 900
1040s; $20C, ,000, COO 'S1s pay able now after IA
years which can then easily be put into 10-40s;
other loans (all temporary, say $500, ,0OO, 600,
of which three-fourths consist OF 7'30s, con-
vertible, and certain TO be converted into l040s;
and say S400 000, 900 greenba including frac.
tional currency, making the debt OF $780,,
OOO, 900. So, it may be seen, the whole debt ex-
cept 1918 is already funded, or sure to be funded
in 500 six per cents, or 10 40 five per cents
Can there be a better funding system? Mr..
Chase says there cannot. Yet there is talk of a
The object rs to catch gudgeons by apparently
yielding to the popular clamor for taxation on
bonds.
loan, with reservation of right to tax not ex-
ceeoing one per cent; in other words, new
non taxable per cent. loan; and 1T Is proposed
tomake this long loan-say 80 years. IT
''for brokers, bankers, aud lenders, but
death on the people.p OF course, such loan
can be negotiated; for a per cent 30-year lOan
untaXable, Is worth more IN the market, be-
cause it will collect more out of the taxpayer
for the bondholder than any loan now out
standing; and nothing is more certain IL the
future than that Government will be paying
within five years, 8, 10, and even Is per cent.
Tor the privilege OF paying its debt before ma
turity.
The Secretary comedies it may be we'll enough
a.. oo1-o fl1al lOan lnn form nFnn q
why make II for twenty years or thirty years,
instead of adhering TO the ten-forty plan, by
which the debt is redeemabe at any time after
ten wears, and thus kept under the control of
the people9 The Secretary has no
len years at per cent,-or with right to tax
at one-fifth as we can now borrow at or 6, with
right TO tax at one-sixlh. Why bind ourselves
to pay either rate of interest for thirty years,
when it is not only unnecessary, but certain TO
entail a heavy additional expense in the form of
premiums for redemption?
When Secretary Chase negotiated at par the
S73, GOO, 600 OF l040 five per cents, the currency
was much less inflated that it has been ever
since and is now. The issues of the greenbacks,
and the ndispostion of Congress to tax the
State bank currency out OF circulation,
place under Mr. Chase's administration. The
late imitation does not seem to him required by
public exgencies. The green back, he declares,
Should have been retired nearly or quite pdrj
7qssa with the issues of national bank notes
and the equilibrium preserved;
The comparative imitation VIII appear from 8
statement of the circulation on the 3Ot1 oil
June. 1864, when Mr.. Chase lett the Department
and the 30lh OF June, 1867
JUNE 80 1864.