, 1872-10-21


ency Of petitioning the Secretary Of the Treas-
ury to reissue 944 000, 600 OF greenbacks retired
| by Secretary McCulloch in pursuance OF q law in
force during his term Of Office. The legal OBJ
stacles to this proceeding do not seem to have
occurred to any of the parties 30 anxious to
have the 944,oo0,ooo put aaoat again, for they
seem to believe, with Secretary Boutwell,,
that wheze there ia will there is q
way, and that, if the law is op-
posed to particular desired course ot
action, it is only necessary to construe it out OF
the way and leave the Supreme Court to put
things to rights about four years afterward.
| These greenbacks We're taken in, cancelled, and
publicly burned by authority of law. The su-
prems Court held unanimously, in the legal ten
der caEeB, that the power to issue such notes, if
it existed at all was war power, and could only
| be exercised under circumstances Of such dire
peril as would justify the Government in making
a forced loan. And even here it could only be
exercised by Congress. Nobody ever
dreamed the Secretary Of the Treasury
could exercise such power, aided only by few
irresponsible advisers from Wall street. The
S44, ,000, 600 Of greenbacks, having been original
~ Issued by authority Of law in the exercise
retired and e1tinguished by authority Of law.
How are they to be gotten out again ? The
Supreme Court has held that not even Congress
can issue such notes and make them1egal tender
in time Of peace. How, then, is the Secretary OF
the Treasury to doit.-Congress not being in seB-
sion?
This is not the only legal difficulty. The
method Of getting these greenbacks into bust
planned. The Secretary Of the Treasury cannot
buy 944, 100000 nor even 100000 of bonds
without sending the price above pnr in gold, and
he is forbidden to purchase bonds above par.
He cannot discount commercial paper with his
$44,000,000. What then can he do? In answer
to this all-important question, one Of the most
sagacious Of our city bankers suggests that he
might hire Professor Wise's balloon and sail
over the country for the next two weeks dropping
the greenbackB impartia1y On the heads OF the
Hto4AcS dk tIb 6AA " WHICH kl1u9 N6 NUk10 uHfG
just about one dollar per head more than VIC
have now-one dollar in paper, but not one cent
more Of loanab1e capital.
Our sympathies are, Of COURSE moved for
those who are aiding and abetting this move
ment from mistaken notion that an issue Of
more irredeemable paper, 1t it could somehow
be done, would relieve the pressure in the loan
market. We have taken some pains to learn
the views OF the leading bankers OF
this city as to whether such an issue would
really relieve the present stringency in CONNER
cial circles, and we find that, with very few e1-
ceptions, they are Of the contrary opinion or
at least, think that tie relief would be only mo-
mentary, and that, very soon the evils would be
aggravated and intensified by the new issue Of q
circulating medium which ia not redeemab1e in
anything, which adds nothing to the capital Of
the country, and whose inevitable effect must be
to initiate prices and promote speculation. It is
generally conceded that the effect of Dir. Bout
wells recent experiment Of selling $4,000, 900
gold and purchasing s5,o0o,000 bonds, WINS al
most wholly absorbed by the stock mar
ket, and gave scarcely any relief
to legitimate trade. Yet, in this
case there was an absolute liberation Of So, 5,0o0,-
600 Of capital (not moonshine merely from the
dark closet Of the Treasury and it's effect is the
same as though John Smith should pay corre-
spending amount Of his debts with gold hoard
that had been kept for q long time idle and USE
less in his cellar. It is obvious that the amount
Of relief afforded to the commercial community
Of the country by this disbursement Of idle
capital would be very faint and almost irnpercop-
tible. Still it would be something, because the
article disbursed has IN intrinsic value.
The present difficulty in the money market
arises not from a deficiency OF currency, but
from decrease of deposits. This is fact which
even bankers do not generally understand, al
though they watch with an eagle eye every vari-
alton of their deposits and make them the basis
Of all their loans md discounts. There is the
same amount Of currency in the country that
there Was six months ago, yet there is not the
same amount Of deposits, and that is the reason
why money is tight Deposits consist mainly of
checks, drafts and bills OF exchange, represent
ing property in transitu. Watch the line Of
depositors at any bank counter and you will sec
that four ffths Of the things passed into the
receiving teller's hands are checks, drafts and
bills Of exchange, representing property already
nold, OF to be sold. Not more than one-ffth
consists OF either greenbacks or bank notes.
The daily balance Of deposits-the average e1-
cess which the bank holds Of these
checks, drafts, and bills Of exchange oyer and
above the checks drawn upon itself-ia the
measure Of its ability to lend money. And what
is true Of one bank is true Of all. An addition OF
844 goo POO to The currency cannot permanently perm