The Portland daily press., 1870-06-13
INCREASE or BAvEtEa PAaItIT1Es.
Speech Of Hon. John Lynch Of Maine

Dill under consideration 10 ~ '"PPiJ
facilities and national bank currency to those
sactions of the country which under the ap-
no,t;onmont section of the currency act failed
~ ~ ,aceiye tbe amount to which they were en-
ana the limit OF $360.000,O00 fixed by law
hayng been reached before national banks
had been organized in those sections.
TO effect this, the first section of the act
authorizes the issue of S95,0C 1000 of national
bank currency, in addition to the 100000
600 to which the issue is now restricted by
law; which amount is to be issued to banks
organized in States having less than their
proportion under the apportionment made in
the act creating the national banks.
The second section provides for with
drawal pdri pdSSl OF the three per cent tenn
porary loan certificates, which are now held
as a part of the legal-tender re~erves of the
national banks, amounting in round numbers
to $45,O00,OC0. 1t also provides for with
drawal of $40O00,000 of legal-tender United
States notes, making a total withdrawal of
SS5,O0O,OOO OF what are equivalent to United
States notes, and the substitution of sos 5,000,-
900 of national bank notes therefor. II there
were no reserve required to be held by the
banks created by this bill there would be an
undoubted increase of the currency OF TO-,
000C00; but all national banks are required
to hold a reserve of lawful money equal to
fifteen per cent, and at certain points of re-
demption to twenty-five per cent. of their cir
culation and deposits. The average of law
ful reserve for existing banks is about twenty
per cent; but l presume in the new banks to
be organized it would not exceed the mini
mum of fifteen per cent. This reserve of fif-
teen per cent. would on sos 100000 circula-
ton amount to $14,250O00. AT a low esti-
mate the deposits of the new banks would
equal their circulation, which would require
600 more as reserve, making total
reserve of $2S,500000.
The effect, then, upon the whole volume of
| the paper currency under this bill would be
| t) retire directly Ss5,Oo0O00 of government
money, and indirectly. as a reserve tor the
| new banhs, S2o, 100000, making total of
S113, 100000 withdrawn from circulation, +,
while there would 60 into circulation 500, ,000-
900 additional national bank notes. The re-
suit would be contraction of the currency
to the amount Of $1S,500OOO. If the depos-
| its of the new banks should average equal to
| the average of the present national banks the
| contraction would amount to $10OOO,OOO
more; or $2S,OOO,OOO. This would be the
| effect of the bill upon the currency. The
effect upon the Treasury would be to retire
SS5,000,O00 of the public debt, upon which
we are now paying 81 100000 interest in cur
rency, and to substitute therefor the same
amount, upon which we should pay 3,80O,O00
interest in coin; loss in round numbers of
S2,60O,OO0 per annum to the Treasury; not a
very large amount in thece days, when we
| deal in thousands of millions, but sufficient,
| if judiciously applied, to restore to us during
the next decade the position which we held
before the war as maritime p0wer-a larger
amount than would have been required under
the bill reported by the select committee for
reviving our commerce and navigation.
If the object sought could be accomplished
| in no other way we might be justified in in
curing the cost for the sections which from
any cause have been deprived of an equal
share OF the facilities and advantages afforded
by the national banks should now be placed
on an equality with the more favored sections.
Justice to those sections, as well as the best
interests of the country, demands that this
should be done. But in my judgment there
Is better, more economical way of attain
ing this result, a way that would settle not on
ly this question of redistribution, but also the
lOng-contrOverted question as to whether we
have an excess or deficiency of currency
Aud that better way, believe, is to provide
Tor making the Uniled States notes now out
standing redeemabe in or convertible into
| specie, and in taking off all restriction as to
the amount of national bank notes which may
| be iSsHed. In other words, to provide tor spc-
Gle resumption by the Government and make
banking free. l believe this can be done by
gradually changing all the irredeemabe Uni
ted States notes now outstanding into coin
notes or notes convertible into coin at the will
OF the holder at some certain date. This can
not be accomplished Immediately, but it can
and should be Immediately provided for.
There can be no doubt that with $100,0O0,-
600 OF coin in the Treasury we can immedi-
ately provide for and commence resumption
| OF specie payments by the Government, and
| accomplish it within two years. The faith OF
the nation is pledged to this, not only by i'm
plication in promising to pay dollars for these
notes, but by solemn act of Congress. hold
IN my hand an act entitled IAN act to
strengthen the public credit" the last clause
Of which provides as follows:
l And the United States also solemnly pledges
Its faith to make provision at the earliest prac
| ticable period for the redemption of the United
States notes in coin.
This act is dated March 10, 1869. Since it.
passage more than one hundred million dol
lars of the unmatured obligations OF the Gov
ernment have been purchased and retired
and over eighty million dollars lie locked III
in the Treasury, while our yearly estimated
receipts are S100,O00,O00 in excess of our esti
mated expenditures; and yet no provision
whatever has been made for redeeming this
double pledge OF the national faith. On the
contrary, we have reported, by the Committee
of Ways and Means, bill "to authorize the
reiunding of the public debt" which looks tc
a direct reputation of this pledge.
This act to strengthen the public credit
ought to be regarded as specially binding up
on all departments of the Government, and
should be strictly observed in letter and in
| spirit, because the act is of itself a solemn
| pledge of the faith of the nation.
IL declares. first, that all the obligations o.
the Government not expressly pays BILE in law.
full money shall be paid in coin second, that
None of the interest-bearing obligations o.
the Government shall be redeemed or paid be-
| fore maturity unless at such time United States
notes shall first be convertible into coin, at the
nS % St TN tne holder; or unless at such tim'
rate of interest than the bonds to be redeemed
can be sold at par in coin.
Third, that
Provision shall be made for the payment O
! the United States notes at the earliest day
| practicable. -''-
Now, if we deliberately violate two-thirds
| OF this act, what confidence will be placed in
our intention to observe the other third? We
are paying the public debt before the United
States notes are made redeemable in coin. and
we not only make no provision for the paw
ment OF these notes, but we are by this fund
ing bill to which have referred diverrine the
means which should be appropriated to this
purpose to the purchase of obligations which
are not due; obligations upon which the in
terest is promptly paid, which the holders dc
not desire to part with, and which would bt
aoove par in gold to-day if we provided for the
payment OF our demand notes. The course
we are pursuing in regard to our finances
wouli be accounted dishonorable in an ipdi
vidual. No legislative sanction can make i
honorable in nation.
Ii this pledge of the Government to mad
provision at the earliest day for the redemp
tion OF lis notes in coin were carried out j,
good faith we could then take off all restric
lions IN regard to the circulation of the banks
and allow the currency to be regulated by th
| requirementsIof business, instead of absurdI
attempting to regulate it by law. 1--we are t,
continue to tinker the currency, have n
doubt the bill now before us is as well adapte,
to the purpose as any that can be devised bu
| regard all these measures which undertake
to adjust the currency by law, either tn,
amount required for the whole country or the
proportion which should be given to any par
ticular section of the couetry, or which pro
| poses to substitute one ir-edeemable currene,
for aAother OF like character, as poor make
shifts which tend only to keep the finances
and business of the country in disorder.
SO long as we depend upon legislative &C
ton to regulate the relations of the currency
with the trade of the country, so long vii
disturbance and disorder in financial affair
continue. The only solution of the currenc,
question, in my judgment, is to make the ra.
honal currency The equivalent of specie AMI
then allow the banks to issue whateye
amount the business of the country requires