The Highland weekly news. [volume] (Hillsborough [Hillsboro], Highland County, Ohio) 1853-1886, 1869-02-11

to produce an interest by the issue O
coin notes based upon it, and thus en-
Ter into actual circulation and grad
uaHy be made to perform all the use
of money, now performed by depre
ciated currency.
This is the basis of the fourth sec
tiOn of the bill, which utflizes the goIC
notes based upon it, and their applica
tiOn to the purchase of bonds and TIN
reduction of interest, and he right t.
make contracts in gold may now safe
! " and properly be extended to banks
organized under the National Bank
ing system. Upon deposit of bonds
existing banks or new banks, may bt
authorized to issue gold notes equal tC
! 65 per cent. of the value of the United
States bonds deposited to secure theIl
! circulation. Their payment will bC
in coin, but in all other respects they
may be subject to the general prOvis
ions and limitations of fine Banking
act. Many of the banks, especially in
commercial cities, will gladly avail
themselves Of such a provision to with,
draw their present circulation and
substitute gold notes, convertible on
demand, iate coin. With such a pro.
vision, and on such a basis, the sys-
tenn may be free, and thus all the EN-.
barrassing questions about the Unequal
ity of the distribution of the bank cir
cuIation will be avoided, A right
conferred upon all, without limit as Ia
amOunt, and upon regulations appli.
cable to all, would at once secure to
! the South and West new banking fa'
cilities, and would rapidly tend to
substitute coin or its equivalent for 1e-
gal tender notes, and without the Sc
we're process of contraction.
The objection made that this would
create two edrrencies of unequal value,
applies as well to the present state OF
the currency, for we have now two
currencies of unequal value-gOld and
legal tenders. If we are sincere in
wishing specie payments we must
encourage coin contracts, issue coin
notes, both by the United States and
by the banks, and thus, without con-
traction, dispense with the use of the
inferior and deprecated currency.
The superior value of coin notes, their
use in commercial cities, their eonver-
sion in the gOld-producing States, will
soon give them higher credit and Sc.
cure them in every part of the cOun-
try. I am confident that under such
a system the National Banks will, il
allowed, and before specie payments
are resumed, substitute coin notes for
the present circulation, and that, too,
without diminishing the aggregate OF
circulation. Many Of them have now
reserves and profits enough to make
requisite deposits of additional bonds,
and the gold certificates now issued
from the treasury might be. used for
their coin reserves without creating
new demands for coin. MI. Sherman also
urged, as a consideration in favor of
the. sections of his bill r lating to gold
contracts and gold notes, the doubt
that rests upon the validity of the Lc-
gal Tender act. We must not forget
that currency contracts depend not
upon the agreement of the parties, but
entirely upon the validity Of that act.
This has always been doubted, and is
now contested before the Supreme
Court. The Legal Tender act is only
material as it affects existing contracts.
Is it wise to continue measure only
justified by a grave public necessity,
now when the necessity has passed +?
1t may be that the Supreme Court will
deny the validity of the Legal Tender
act, or limit its operation to existing
contracts made since its passage,
while it may subject currency con.
tracts to bridge over the necessity by
authorizing the adjustment of this
matter between the creditor and
debtor. By funding a portion of the
United States notes by requiring the
banks to maintain their full reserves
in legal tenders by withdrawing the
per cent. certificates, and by the use of
the gold in the Treasury, we could re-
sumo at once. This process might in
crease the bonded debt of the United
States s1O0, 100000, and the interest
So, ,000,000j but our resources are am
pie in gold to pay the increased inter
est, and the actual savings in the
current expenses of the Government
by the reduction of prices to the gold
standard would be double, and per-
haps, quadruple, the increased interest.
The body of our expenditure being
the interest of the public debt, is now
payable in gold, and its burden is not
increased by specie payment, while
the saving in expenditure, and the
palpable saving by the funding of the
debt at lower interest, would largely
exceed any interest we would have to
pay on notes Withdrawn from circuIa-
tiOn, and if the burden of resumption
fell alone upon the National Banks,
the task would be an easy one. Their
securities deposited with the Treasurer
of the United States are now nearly
equal in gold to the amount of their
circulation. A bill under the Banking
act of ten per centum additional Sc
curity could be easily met by the
great body of them, and thus enable
them to resume whenever the United
States is prepared to resume. Their
profits in the past have been large
Those not now strong enough to per
form the great object of their organiza-
ton, namely, to furnish uniform cur
rency, convertible into gold, may well
give way to other banks ready to take
their places. But redemption by the
banks means redemption by all their
debtors by the merchants, manufac-
turers and traders of the country. But
it is not possible to take this voyage
without sore distress to every person,
except capitalist, out of debt, or to
the salaried officers or annuitauts. 1t
is a period of loss, danger, lassitude of
trade, fall of wages, suspension of en-
terprise, bankruptcy and disaster. To
every railroad it is an addition of at
least One-third to the burden of the
debt, more than that deduction from
the value of its stock. To every bank
it means the necessity of paying $3.50
for every S100 of its notes and depos-
ties, except so far as the bank may
transfer this to its debtors 1t means
tl,a r-IIiI1 Of oil dnaIors ,rybO.O ,IoI,4- ,,o