Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1870-01-26

of currency and in favor of an early return
to the specie basis. The pending bill
neither retarded nor tended to advance to
| the desirable result. He favored the
| gradual contraction of currency, but con-
| Guided that this bill contained little to
aggravate the evils of the hour. The Sec
retary's plan for funding the debt and
furnishing new bonds for banking purposes
| in place of the old, might be the best we
could hope to get. At all events he had
no pet measure OF his own.
Mr. Sumner moved to amend by substi-
tuting for the bill similar bill recently in
troduced by him for an increase of bank
circulation to $500, 900, 600 upon the retire
ment of greenbacks.
Mr.. Ramsey inquired whether it was
| proposed to take action on the bill to-day.
q. Mr.. Sherman, on behalf of the Finance
| Committee, desired the Senate to take ac-
ton on the bill to-day. He said it was a
| preliminary measure, and upon its disposal,
the Committee would proceed to consider
| other important measures before them,
among them was one now offered as an
amendment, but one which had no per-
| Thence here.
The plan of retiring three per cent GER
| tifcates, was recommended by the Secre-
! tary of the Treasury and President, and no
| objection to it. that he knew Of had been
made in public prints it seemed con-
| ceded this was most innocent wayin which
the pressingnecessityf orpartial distribution
could be made. The other provisions of
the bill were generally acceded to. The
| only doubt now is whether such banks
| should be authorized. Large corporations,
chiefly on the Pacific coast, were actually
organizing on the basis of this bill.
During the discussion on the currency
| bill in the Senate, Mr.. Morton suggested
| that there should be some understanding
| in regard to whether this bill was to be a
finality upon the subject of redistribution
of the currency. A bill had passed the
| Senate and was now before the House by
which $50, 900, 900 of currency were to be
| taken from the Eastern States having an
excess, and given to the Western
States. If this was supplementary to the
former bill the result would be a redistribu-
ton to the extent of $4,000, 900, but his
| inference from the statement yesterday
made by the Chairman of the Finance
| Committee, led him to consider this
as a substitute for the other bill, in which
| case he would not favor it, because 1t would
not give currency enough TO the West.
Discussing it in the light Of a substitute
several things might be said of
it. First, in the present form the
| bill would substantially result in a con-
traction of currency by the amount of
| SG75. 600, because it would require the
| withdrawal of that amount of a reserve to
| be paid by banks Issuing S45, 900, 600, in
| point Of fact there would bean actual contrac-
| ton TO that amount He showed that since
| June 80. 1868, there had been an actual
contraction by the redemption Of three per
cent. certificates by S26, 100000, which the
country had felt, though the cause Of the
stringency was unknown.
This bill would increase the amount of
| contraction to nearly So, 100000. He said
| the sense of Congress had been repeatedly
| declared in opposition to the contraction of
| the currency, and he characterized 1t as
| en- unsound argument of Commissioner
| Wells, that the depreciation Of currency
| rested upon its excess, and that there was
an excess of some $500, 900, 600 or $780,,
| 600 600. The Commissioner comparison
was between the value of currency in
| circulation in England, Scotland and Ire
land, and other countries, with that of this
! country. Yet, our territorial area exceeded
| more than three times that of the United
| Kingdom, while three-fourths Of our
| people did not possess business
| facilities of bank credit, and bank check
| engaged there The comparison Of the
| present volume of currency, with that
before the war, was equally deceptive IN
| view of our territorial expansion, and the
fact that the States have now no
| currency of their own, which they
| had before the war. While that of the Gov
| ernment is used in every part of the coun-
| try, quantities of it are in actual transit
| over the country, and thus a demand Is
! caused for national currency which did not
| exist before thewar. The actual value Of
| currency to-day was not more stable than
| six months ago.
He did not acquiece in the opinion that
| the price of gold would continue to decline
until the return of specie payment. 1t was
entirely within range of possibility that
| gold would be at 81, 40 within four months.
Many of the gold gamblers, at New
| York, had been deeply wounded,
| and it would be some time before others
took their places; but their places would
be taken, and intelligent inanciers in
New York are looking forward to a rise IN
gold at no distant day.
The condition of crops also entered into
the question therefore in providing for
q system Of banking it was not safe to cal
culate that gold would never 60 above 4
per cent There was no security whatever
against it.
In regard to the provision of this bill for
| establishing banks on a coin basis, requir-
ing them to redeem their notes in gold and
only to have % per cent. Of gold in their
vaults, he thought the principle might
be successfully carried out in the Pacific
l - L., Ea1E ,rrpr1l1
tically fail on this side of the Rocky Noun
tains. 1t would be thought dangerous for
the Government to attempt to establish
banks on that basis.
In reply to remark by Mr.. Sherman, he
claimed that the transactions in gold in
New York city were in the main limited to
transactions between importers and per-
SOUS in foreign countries, width whom
they dealt. Importers sell their goods
TO iobbers, and the latter
to Western merchants on a gold basis; but
there is no new transactions. They con-
tract for gold, with the understanding that
when debt comes due, they are to be paid
in currency according TO the value of gold
on that day.
These gold notes proposed by the bill
could not go into circulation more rapidly
than the gold they represented, and could
not be kept ahoat except by the bank
keeping dollar in gold for each dollar ii
had out. In case of increase in the price Of
gold, these notes would be run upon fol
redemption in order TO procure gold to sell
TO importers. who were required to have it.
Banks would then have to go out and buy
at large premium, which would inevitably
bring about their suspension.
Two calculations, unequal in value, could
not long exist at the same time, for depreci
ated circulation would drive the other out
| of existence.
In this connection Mr. Morton referred
to the abuses to which the banking system
had become a subject. He said Hationa
Banks could afford to loan money cheaper
than other banks, because they not only got
6 per cent interest on bonds deposited witt
Government, but received 90 per cent il
, currency. Notwithstanding this in many
e States, these banks loaned their money a
the same rates obtained by private bankers
l a., l..