The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1869-12-18

| "The depreciation Of currency is due to two
causes First, an excessive issue, and second
ly, to the want Of tsith in the government;
and the extent of the influence of the first
named cause cannot be ascertained until the
second is removed substantially. Whenever
our credit shall be SO much improved at home
| and abroad that holders of our bonds are dis.
posed to retain them; when the public mind
is excited upon financial subjects, we shall be
able to judge more accurately the extent OF
| the overissue OF pape, money. 1t is also true
that the quantity OF t"rency necessary tor the
transaction Of the bus less of the country can
not be fixed accurate :. Since the close at the
war, the wants of til. tates OF the South have
increased, and, com .lently, large amount
of currency has be,u withdrawn from other
sections to supply The demand there created.
The amount necessary for the purposes of the
South will steadily increase for the next two
years.
"The construction Of the Pacific Railroad is
likely to result in the substitution of paper
| for coin by the people on the Pacific coast 1t
! is probable that til, demand for paper for that
purpose will not b, ess than $50, O00, 600. As
Il consequence avery large quantity of coin
| will be increased upon the Atlantic coast, and
the paper circulation in the states east of the
Rocky mountains wil be materially reduced.
These changes will tend to diminish the diff
ference between paper and coin.
Concerning the resumption of specie pay
ment, the Secretary says:
when the credit of the country shall be fully
established in Europe, and there shall he no
doubt either OF our ability or disposition to
meet al OF our obligations, bonds, heretofore,
and now, to large extent, held by merchants
and bankers, will be transferred to capitalists
for permanent investment. When this change
shall have taken place the probability of our
securities being sent home under the influ-
ence Of political or financial disturbances In
England wall he very light, and when, as
concurring fact, our exports, exclusive of pub
lie securities shall be equal to our imports,
specie payments may be resumed without even
a temporary embarrassment to the business of
the country"
MIR. Boutwell, cites attention to two evils in
the present banking system, the same as
noticed in the report of the Comptroller of
the Currcncy-the first that OF the banks allow
ing interest on deposits, and the second, the
practice Of making call loans for speculative
purposes 1t does not seen. to him to he wise
to authorize the funding OF the whole amount
of $50 bonds, which as is now anticipated,
will I've outstanding on the lst of July next !;
but that $3.50 100000 at least should be sui
tered to remain, either tor purchase or redemp-
ton previous to 1874. Should the sum of
$3.50, 100000 he lett for that purpose, the en-
tire public debt would be in condition to be
easily redeemed between 1874 and 1881. The
l0-40 bonds could be paid, and provision also
he made tor the redemption of the bonds
which will become due in the year 1871. 1t
| may De wise to reduce the proposed loan to
81 200, 100000. which would then leave for
payment, previous to 1881, the sum of about
6U:OOO,OOO; or hardly more than $50, 600, 900
year. Assuming that the loan will be for
An amount not exceeding $1,000 600, 600, he
recommends that it he offered in three classes
of $4UU,0UOOOD each. The first class to be
payable IN Is years, and to be paid in twenty
years. the second class of 00,OO0,0OO to be
| payable in 20 years, and to be paid in rs
years; and the third class Of $500 100000 to
be payable IN 25 years, and to be paid in 80
years.
La Offering the new loan, citizens and sub
Jects OF other governments should receive the
strongest assurance that the interest and prin-
| cipa are to be paid in coin, according to the
terms OF the bonds issued, without any deduc-
ton or abatement whatever.
When the 500 bonds shall have beeni fund
ed to tue amount of $1,000, 100000 or 81 ,20O,-
| OO0,OOO, the revenues can be reduced mater
tally, and yet sufficient sums be raised to meet
the ordinary expenses of the government, to
pay the interest on the public debt, and also to
pay from $25 100000 to $50,0O0,OO0 of the
priacipal annually.
| Should the success in negotiating the loan
| he equal to the SeCret2ry's expectations, based
| upon the fact that the ability and disposition
OF the people of the United States to pay the
public debt are sufficient to Justify us in asum-
| ing that the bonds of the United States will
| command the highest rates in the markets of
| the world, We shall then he in a condition to
| enter upon the work of reducing taxation at
the commencement of the next session of
| congress.
On the 3Oth of June, 1868, the amount of
outstanding per cent. certificates and COM
| pound-interest notes convertible into per
| cent. certificates was 81 ,604 800 On The
3Oth of June, 1869, the amount outstanding
| was $59,96l ,4lO-showing reduction of $16,-
Glib, 48O in that form of indebtedness On the
LIST OF December 1869, the amount outstanding
was still further reduced to $49,716,15OD
| showing total reduction in II months of
22,SSS740. The 3 per cent. certificates arc a
substitute 70 considerable extent for United
States 5-2o's, being largely held by the banks
as portion of their reserve, and thus indi-
rectly though not to their full nominal value,
they swell the volume of currency. 1t is rec
commended that provision be made for the re-
dcmption Of the 3 per cent. certificates within
reasonable time and as compensating
measure for the reduction in the amount Of
currency which would thus be caused, that a,l.
thority be given to grant charters for banks in