The Portland daily press., 1867-12-28


ceeds the demand, the rate OF interest falls.
These variations in the rate of interest, or
price OF money, determine the flow of the
precious metals from one country to another,
and secure supply the world over where the
demand is most urgent. But with paper cur
rency, the case is quite different. Paper cur
rency is not money, but promise to pay
money, and its circulation is limited accord
ingly. United States notes are current only
within the limits of the United States. The
circulation of our State bank notes was still
more restricted. The lmprovised fractional
currency which we used for time during the
war, travelled no farther than the reputation
Of its sponsors had preceded it. A currency
thus restricted does not yield to the demands
OF trade, out remains stagnant, motionless
mass, within the limits of the country which
authorizes it.. ,-,.,t.. a-t r.ye,.
Congress seems to have become fully aware
of this difficulty, and to have determined to
meet it if possible. The bill to provide
against undue expansions and contractions of
the currency, introduced by Mr.. Lynch on the
4th of February, at that time scarcely attract
ed any attention. 1t aims at precisely the
difficulty we have described, and now, it has
hardly been renewed when it is taken up on
every hand and in some form seems sure OF a
passage. The bill instructs the Secretary of
the Treasury to issue 5 per cent. bonds to the
amount OF 800 millions, to be sold at par for
lawful money and payable on demand in law
lul money, in order to absorb the surerfluous
currency when the rate of interest falls below
5 per cent. and replenish the money market
when the rate of interest rises above that fig
ure. The first struggle over this bill arose on
motion by Mr.. Schenck to take the bill from
the committee ON banking and curr ency, of
which MIR. Lynch is a member, and refer it to
the committee on ways and means, of which
Mr. Schenck is chairman. The House refus-
ed to grant this request. As it is understood
that the ways and means committee is oppos-
ed to the measure while the banking commit
tee favors it, it viii be seen that the House in
sustaining the banking committee has declar-
ed its willingness to entertain Mr.. Lynch's
proposition.
In the Senate, the finance committee has
presented through its chairman, Mr.. Sher-
man, bill which in its fifth section embraces
substantially Mr.. Lynch's idea. The Tribune,
with its usual discrimination, pronounces Mr..
Lynch's bill "a financial balloon" and in the
same breath commends Senat or Sherman's
report, The only difference between the two
is, that while Mr. Lynch proposes simply to
mobilize the 300millions we have, and to keep
the currency entirely distinct from the funded
debt by authorizing special loan for this
purpose, MIR. Sherman would limit the issu
OF legal tenders at 400 millions, and would
have them paid out on demand in exchange
for 5-2O's and for his proposed 1O-4O year con-
sols. The two propositions, are notifications
OF the same idea, but if either is to be called a
"balloon," Mr.. Sherman's bill, which author
ICES slight expansion of the currency, should
bear that title. ,.-s +.
The same idea has been taken up, more or
less vaguely, by several other gentlemen -
Gen. Butler makes it a part of his scheme
but he proposes sans tacon to augment the
volume of currency by 300 cool millions,
which is the second short and easy road to
national bankruptcy recommended by th is
unsafe guide. Mr.. Williams of Indiana pro-
poses to convert the entire debt, Unite d
.,.,r.- - - ~ if the holders nlease- into
consolidated bonds, payable IN cofHf m iisy hsy
years, or to pay the outstanding bonds in law
full money on demand, allowing the banks also
to convert" their notes into greenbaeks In
this shape, the features of the original plan
are hardly discernible. There is no longer
any limit to the possible issue of legal ten
ders, except the gross amount of the national
debt plus the bank note currency. 1t is safe
to conclude that no such wild experiment will
be tried, and that Mr. Lynch's bill will pass
with slight notifications and in all probabiIi-
ty as part of the general scheme reported to
the Senate and providing not only for the
conversion of legal tenders but for funding
the debt and for the taxation of its holders
The best way to secure flexible currency
is to return to specie payments. The plan
which we have been considering, mertorious
and ingenious as it is, is only makeshift.-
When Congress has settled its details to meet
the present emergency, we hope the next step
will be to take up the far more important bill
submitted by Mr.. Lynch, providing for the
gradual substitution for our irredeemable pa
per ofnotes payable a year from date Sena-
tor Corbett of Oregon has a bill providing for
the issue ofnew notes, payable on demand,
to the amount of 90 per cent. of the gold in
the treasury, to be used in buying up green
backs. Senator Morrill, of Vermont proposes
simply to fix the date of resumption at July
A, 1859, and to require the Secretary OF the
Treasury and the banks to begin now to ac-
cumulate gold reserve. 1t is plain that the
change will be brought about more gradually
by Mr.. Lynch's plan than by either of the
others, though Senator Morril's proposition
amounts to almost the same thing In his
speech on the 10th OF March, 1866, Mr.. Lynch
said: M ot-...4.t
1t is almost universally admitted that the re-
turn to specie payments must be gradual =
Suppose, then, that the Government of the
United States takes the initiatives; not by a
contraction of the currency, but by anDounc-
ing, at as early day as is practicable, that its
legal-tender currency will be redeemed in
gold on presentation at the Treasury, and
then, to aid the banks in following its lead, let
the national banks be allowed to redeem in
the legaLtender notes thus put on par with
gold by the Government. With the basis of
redemption thus broadened it could not be
long before the business and the money o the
country rested as firmly upon specie basis
as ever.
His bill offered almost year later, is based
upon this idea. The United States are to be-
gin to redeem the legal tenders, and the
banks are to redeem their notes in green
backs. So Mr.. Morrill, expressly provides that
the banks shallnot at first be required to re
deem their notes above the denomination of
five dollars in coin, but may pay in United
States notes equivalent to gold. That the
banks may be OF great assistance 10 the gov
ernment in the resumption of specie pay
ments, few now doubt; that Congress may
presently begin seriously to consider how
they can be made most useful, is greatly to be
| desired.
The Plastic slatc Roofnv
| Noticing last spring, the recommendations
| of Scion Robinson, the Agricultural editor of
the New York Tribune, and other members
Of the American Institute Farmers Club,
whose discussions are published weekly in