The Portland daily press., 1869-06-11
frHE p E So.
Friday Morning, June II, 1869.


ET First Page To-Day-Letter from Wash
ington; A Sketch of CASTELAR,; An Antidote
for Tobacco; The New Captain General Of
Cuba; Young America in Berlin; Recent Pub
locations; Gossip and Gleanings. se
Fourth Pdge--Trees Opening; Parisian
Incident; Phil. Sheridan.
l.f a itt
A Gradual Contraction of the Z urreney.
We have always believed that whatever ef-
feet upon business and financial reform med
crate and persistent contraction of the cur
rency might have, the experiment Of contrac-
tion was never fairly tried by Mr.. McCuiiocn-
Indeed looking at Mr.. McCulloch's whole ad-
minstrati0n, contrasting the bravery OF ms
Fort Wayne manifesto, and his earlier annu-
al reports with the cowardice and fckleness Of
his actual measures it is hard to acquit him
entirely of the accusation of completely with
Mr.. johnson in a purpose to aggravate our
financial distresses with view of bringing
about political revulsion.
We extract from the New York Evening
Post statement which seems to show that
the actual result of the late Secretary's policy
was considerable expansion Of the paper
currency
But the worst of Mr.. McCulloch's admins
tration in this respect was, that its profession
and practice did not seem to agree There
was an unremitting cry for contraction from
the treasury, but the work really done was IN
the opposite direction. Every step taken TO
reduce the currency was accompanied by Two
steps 10 increase it. The net result OF the
whole is seen in these figures: In octoDer,
iSo6 according to the statement ;s maae 9e Dy Inc
traction report of that year, the treasury had
in circulation:
OF Greenbacls Observation-Disclosures $500, 49,, ,7s5
Fractional currency .,,.27 5SS,0l0
Total currency. AIT ,7s3, ,T95
There were no certificates of deposit used as
bank reserves and taking the place of green
backs, and the whole amount of certificates of
Indebtedness was very small
After two years and hall, during great
part of which Mr.. McCulloch's power to carry
out his policy of contraction was almost abso-
lutte, and during the whole OF which his proc
lamations of that policy We're frequent and
earnest, his statement of March 1, 1869, gives
the circulation as follows: 1sllc, 1ss3
Gresnbacks. $3.50 o21 ,073
ETacuonal currency. SO 781 ,547
Three per cent. certificates. .b7 140, 900
s4l9, ,s42, $40
The certificates are used by the banks as le-
gal-tender reserves, instead of greenbacks; !;
and therefore initiate the currency precisely as
much as so many greenbacks. Thus Mr.. Nc
Culloch actually added, in twenty mine
months, $32, ,138, 1926 to the issue of trea sury
notes; and his famous "policy of contraction
was interpreted throughout by an administra-
tion of imitation.
While Mr.. McCulloch professed and did not
practice, his successor is shown by the Post to
have performed without promising. He has
effected "a reduction of the circulation of the
country to the amount Of $40, 600 1893 in three
months without violation of law or disturb
ance of trade"-a result which the Post thinks
OF Nincomparably more value to the country
than sinking fund of five times the amount
since it isa direct step towards sound curren-
cy, stability of prices, and q settled financial
policy. The details of this contraction are
thus shown: al Ua.Ei lsrimhE 81 seHod
Greenbacks and fractional currency wear
out, and no law requires him (the Secretary
to print more when tho worn ones are re-
deemed. Three per cent. certificates occa-
sionaliy come in tor payment, and no law re-
quires him to reissue them. The practice un-
der the former administration seems to have
been to keep the place of the notes withdrawn
supplied by new ones. But Mr.. Boutwell, has
wisely avoided this, as it seems and the, re-
suits attained are important, although the
process has been SO quiet as to attract no at
tention and produce no disturbance Thus
the three per cent. certificates in circulation
were at MIR. Boutwell's accession: rad ,fsll
March 1st $57 10000
April ist after one month. .......,... 546Q5O00
May 1st, after two months :. II. !. III . ri 2d0000
june 1st, after three months ,....... .53O75.0 .000
Thus he has reduced these certificates 81
O66,Oo0 in three months: an average contrac-
ton, In thisione item, of 81 1856 900 per month; !;
or at a rate which will extinguish this lmost
objectionable form of the public debt before
the hrst of May next 1nasmuch as this
amount is taken directly out of the bank re-
serves, which are in the aggregate less than
general imitation, the actual contraction rep
resented by this movement is not less than
$6,000,000 per month in the circulating me-
dunn OF the country; and is perhaps as great
as can take place without seriously disturbing
the money market The same process is
taking place in the Treasury money, the fig
ures eeing as follows: t-5i n n ,aa1 iIT''''