The New Orleans crescent. [volume] (New Orleans, La.) 1866-1869, 1868-12-15

ExrRACrs PROM TaE RErORT OF
THE sECRETARY OF TINE TBEAs-
oENrRAI rRrNcIpIEs OF CURRENCY


II there Is any question In finance or political
economy which can be pronounced settled by ar
gument and trial, it is that inconvertble and de-
pre- ciated paper money is injurious 70 pubic and
private interests. positive polificsi and financial
evil for which there can be but one justification
or excuse-to- wit: temporary necessity. arisiag
from an unexpected and pressing emergency, and
il fellows, consequently, that such circulation
should only be tolerated until, without fnsncial
sLock, it can be withdrawn or made convertible
into specie. Jf an irredeemable bank note circu-
lation is sn evidence Of bankrupt or badly man
aged banking institutions. which should be de-
priyed Of their franchises compelled to hus
band and make available their resources, In order
that they may be prepared at the earliest day
TO take up their dishonored obligations.
why should not an irredeemabie government cur.
rency be regarded as en- evidence OF bad manage
ment Of the national finances. If not national
AMERICAN CURRENCY DISGRACE TO THE NATION.
The United States notes, although declared BY
law to be lawful money. are nevertheless dis.
bonored and disreputable currency. The fact that
they are legal tender. possessing such attributes
of money as the statute can give them, adds moth
ing to their real value, but makes them all the
more dishonorsble to the government. aud sub
PEELED to take ss money what Is not money. and,
becoming demoralized by its constantly changing
value. they are in danger Of losing that sense Of
honor In their dealings with governments and each
OtucT WuiCu 10 uCCCccofy tao Wch boAS VI
society. Il is in vain to expect on the part Of the
people faithful fulhllment of their duties to the
government as long as the government Is false to
its own obligations will those who do not hest
tate to defraud the public revenue long continue
to be scrupulous in their private business Justi-
fable and necessary as the measure was then re-
garded, il Ia now apparent that one unfortunate
step was taken when irredeemable promises were
issued as lawful money, and especially when
they were made a valid tender in payment Of debts
contracted when specie was the legal as well as
the commercial standard Of value.
LEGAL TENDER NOTES A TAX.
The legal tender notes enabled debtors to pay
their debts in currency largely inferior to that
which was alone recognized as money at the time
they we're incurred, and thus the validity of con.
tracts was virtually impaired. If all creditors had
been compelled by law to pay into the public
treasury fifty per cent, ten per cent, or indeed
any portion Of the amounts received by them
from their debtors, such law would have been
condemned as unequal and unjust, and yet the
effect of it would have been to lessen to the ex-
tent of the receipts from this source the necessity
for other kinds of taxation, and thus to relieve in
some measure the class uDjustly, because une-
qually, taxed. By the.legal tender acts portion
of the property of one class Of citizens was vrtu.
ally confscated for the benefit of another without
an increase thereby OF the public revenues. and
consequently without any compensation to the in
jured class. There can be no doubt that these
acts have tended to blunt and deaden the public
small degree with the decentralization which so
generally prevails. f-
WHAT THEY ARE DOING IN THIS COUNTRY.
The economical objections to these notes as law
full money, stated at length in previous reports Of
the secretary, may be thus briefly restated: They
increased immensely the cost OF the war, and they
have added largely to the expenses OF the govern
ment since the restoration of peace. They have
caused instability in prices and unsteadiness in
trade, and put check upon judicious enterprises.
They have driven specie from circulation and
made II merchandise. They have sent to foreign
countries the products Of our mines, and at the
same time our European debt has been steadily In
creasing, and has now reached such magnitude as
to be heavy draft on the national resources and
serious obstacle in the way OF return to specie
payments. They have shaken the public credit by
raising dangerous questions in regard to the pay
ment of the public debt in connection with high
taxes TO the necessity fer which they largely con-
tributed. They are preventing shipbuilding, and
was destroyed by the war. They are an excuse
for, II indeed they do not necesstate protective
tarifis and yet fail by their iuctuating value tc
protect the American manufacturer against bis
foreign competitor. They are filling the golfers
of the rich, but by of the high prices which
they create and sustain, they almost intolera
BILE to persons Of limited incomes.
Mr.. M'cULLocH ADHEREs TO CONTRACTION
The secretary still adheres to the opinion SC
| frequently expressed by him that reduction Of
| the paper circulation of the country until 1t sp
| preciated to the specie standard, was the true
| solution of our financial problem. But as THU
| policy was emphstcally condemned by Congress
and il lie now too late to return to 1t, he recon
| mends the following measures as the next bes
| calculated to effect the desired result:
com CONTRACTS OUGHT TO BE LOCALIZED.
Agreements for the payments of coin seem Il
be the only ones not contrary to good morals, tn
| performance of which cannot be enforced IN tn
/ courts. Coin contracts executed before the pass
age of the legaltender acts, as well as those exc
/ cuted since, are satisfied In all the States excep
California by the payments OF the amounts calle'
for in deprecated notes. This shackle upon com
1 merce, this check upon our national progress
this restriction upon individual rights, should NJ
4 longer be continued. If it be admitted that tn
condition of the country during the war and TO
time after its close created necessity for law
and decisions making promissory notes
| fiuctuating in value according to the result
| of battles and Of speculative combinations, tn
| medium in which contracts should be discharged
this necessity no longer exists. steps Shout
now be taken 10 give stability to business an
security to enterprise, and to this end specihc cor
tracts to be executed In coin should at once b
legalized. Perhaps no law could be passed whic
would be productive of better results with
little private or public Inconvenience. Such
law would simply enable the citizen to DO VIVA
the government Is doing in its receipts for cui
toms, and in the payment. of the bonded debt
would merely authorize the enforcement of col
tracts voluntarily entered into according to the
letter. The effect of such Law would be TO chez
the outflow of specie to other countries by crei
| ting a necessity for the use OF 1t at home,
encourage enterprises extending into the futul
by removing all uncertainty in regard to the vaiu
| and show how groundless is the apprehension
generally existing that a withdrawal of depreci
ted notes on the appreciation of these notes
par would produce scarcity of money, by pro
ing that specie expelled from the country by
| inferior circulating medium will return again WHIT
| it is made basis of contracts, and Is needed
their performance.
| TIE LEGAL TENDER ACT MUST bs Repealed.
By no meEuer vf congress, and by no publ
| journal was the issue of these notes as iawf
money advocated on any other ground than th
of necessity, and the question arises. should IN,
not now, or at an early date. be Invested Of q
character which was conferred upon them 10
condition of the country so different from I
present? The secretary believes that they coul
and he therefore recommends, In addition to G
enactment by which contracts for the paymeu
| OF coin can be forced. that it be declared tn
after the first day Of January, 1870, United Stat
notes shall cease to be legal tender on any q
| count. or for any purpose whatever, except go
| eminent dues for which they are now receivab
The law should also authorize the conversion
these notes, at the pleasure OF the holders, 10
bonds bearing such rate of interest as may be