The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1871-05-17

WEDNESDAY EvENG, MAY II, 1871.
Proposed National Excnsquer.

To THE EDITOR OF THE N. Y. HERALD =
beg to submit to the HERALD brit
synopsis, with some consideration on tn
same, of a proposed bill for Nations
Exchequer which has received the approvs
Of many eminent merchants as the bes
way Of meeting the changes of which Their
are many portents on the financial h ri
zon IL. There shall be an impost or cap
ital of 800, 000, 900, divided into share
of S 900 each, to be contributed one-quar
ter in coin and three-quarters in legal ten
ders. 2. The institution to be divided int
two observation-disclosures for the issue of Elk
chequer notes, covered by deposit of coil
and government bonds in the proportion
of one in coin to three in government
bonds up to two hundred millions, thel
one in coin to two in government bond
for two hundred millions more, and ther
one in coin to one in government bonds fo
two hundred millions more.
The Issue Department to be under the
control of three commissioners at each
Office, one appointed by the President, one
by the Governor of the State and one by
the propretors of the Exchequer. The
other department for banking, its discount
being limited to twice its capital and the
rate Of interest limited to six per cent. g..
The capital to be distributed equally, in
proportion to population, to the several
sections of the country 4. The chief
office of the Exchequer to be in the city
of New York. s. The government to
keep its accounts with the Exchequer. 6.
Any of the present national banks are al
lowed, under certain conditions, to sub
scribe the whole or any part Of their capt.
tai to the Exchequer. Z A governor of Il 0
Exchequer to be annually elected by the
directory. s. Limitation of powers aud
definition of functions of the National Ex-
chequer, confning it to its legitimate pur-
pose of giving stability to the business and
currency of the country.
Without giving the bill in ertenso, it
will be seen that the proposition is of the
first magnitude. A great and thrifty peo-
pie like the population of the United
States should have currency convertible
at any point in coin, but, at the same time,
the pressing necessity Of the country is
capital. A radical defect in the present
system of banking is in its failure, except
at points where the deposits are large, to
furnish any increase of the loanable capi-
tai or credit of the nation. Take, for ex-
ample, any village where there are few
merchants and but little idle money,
capital. The government bonds cost
$11 900, and 100000 Of notes only can
be issued for the use of the community.
Here we have a clear diminution of the
loanable capital, while the proprietors OF
the bank draw six per cent. in coin Oh
$4,000 and whatever they make addi-
tional by the use of the 800 900 in notes.
This defect in the present system is fatal
to its usefulness, but another defect exists
in the danger to government credit from
any attempt to resume specie payments.
If the legal tenders were withdrawn the
whole structure would tumble, as the
banks have not coin enough to keep them
going an hour outside of the city OF New
York. Another great evil is the sub
Treasury the deformed offspring Of the
The government holds now idle, as it has
done in the past, more than one hundred
millions in coin and greenbacks, totally
withdrawn from the channels Of trade, and,
in itself, poor investment 10 aL active
and growing country. A National Ex-
chequer would grasp all these matters and
lend, as with absolute certainty, to q
natural and easy resumption of specie pay
ments, would increase the loanable capital
of the country by two hundred millions
and would equalizs the distribution of
banking capital.
The same ideas have not yet been sut-
mitted in any practical shape, and now
that they are so submitted, it is respectful
ly suggested to the great merchants of
New York that some of their number
institution and bring order out of the pre-
sent chaos. Every national bank will find
in the Exohequer powerful auxiliary it
would settle all fears as to the course OF
government; would leave the banks free
to use their own capital, and should they
need more money would be always at hand
to discount their bills receivable, at not
over six per cent per anunm, besides allow
ing them to retire any portion of their
circulation which may reach the Exche-
quer from the government or other depos-
itories, by transferring their negotiable
notes properly endorsed in settlement for
their bank notes. In other words, the
transition from an irredeemable paper cur
rency to one redeemable in coin would be
easy and natural, since the agent which
could bring about this result could have
but one object in view-viz., to protect it.
self and render every other banking insti-
tuition safe and prosperous; the government
holding, through its commissioner, funds
to meet all issues of the Exchequer, and
with the rates of interest and exchange
limited, no public or private interest could
be damaged.
The division of the Exchequer into two
departments gives the note-holder unques-
toned security, while the use of the notes
in discounts by the banking department
would give them all the qualities Of bank
note, in this that every exchequer note
rightfully in circulation would be evidence
not only of debt due by the Exchequer,
but also of debt due to the Exchequer.
What an incalculable impetus would be
given to our foreign Pacific trade by the
addition of $20,0O0,O0O to the loanable
capital of San Francisco Let the propo-
sition be canvassed in all its bearings, and,
if it presents solution of our financial
troubles, carry it into effect. If time and
place permitted il could be shown that by