Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1873-12-05


But any large augmentation OF the issue OF
United States legal.tender notes in time OF
peace would not only be departure from that
Is'declaration Of public policy aud pledge OF
the public faith to the national creditors"
made In the act of June 80, 1864, that the
total amount of such notes shall. never ex-
coed $500, 0O0, 900, as we'll as from that more
solemn pledge contained in the first act OF the
| Mist Congress, ''to make provision at the
earliest practical period for the redemption of
UntediS,ates notes in coin," but would post
pone the day of specie payments and render
it more difficult to attain in the distant future,
unsettle confidence in our national finances,
and be serious detriment to public credit at
home and abroad. There can be no doubt
that, during the eight years since the rebel
| lion, there has been growing desire among
| the people to restore the paper circulation to
a specie standard, and that any step taken to
accomplish that object will be received with
general favor.
| 1t is not possible to resume and MAINTAIN
| specie payments with so large an amount OF
notes in circulation and so small an amount
of gold in the country. The volume OF cur
rency must be reduced or that Of coin greatly
increased Should the national banks be pro-
hibited from selling the coin received by them
as interest upon bouds pledged to secure cir
culation, retaining the same in whole or in
part in reserve, or loaning it in the discount
of bills and notes payable in coin, as Congress
might prescribe, there would be a gradual &C.
cumulation of gold in the banks, (which would
do something toward preparing for resump-
ton. This. with constant increase of CON
in the Treasury, undertaken with the approval
of Congress, would ere long lead to the de-
| sired result, when other conditions required
for the maintenance Of specie payments
should become favorable. The acts OF Con-
press of Feb %. 1862, July IL, 1862, and
March 8, 1868, together authorize the issue
of S4Oo, 900, 900 Of United States notes. in adj
di,ion to $4,000, 06o of such notes reserved
for the purpose of securing prompt payment
lot temporary loan deposits, and the act OF
lJune 80, 1864, contains these words Nor
Shall the total amount of United States notes
issued, or to be issued, ever exceed $500 000,-
600. and such additional sum, not exceeding
$50 900 900, as may be temporarily required
for the redemption of temporary loans" The
temporary loans referred to in the foregoing
acts having been redeemed, the maximum
amount of United States notes which, under
existing laws, can now or hereafter be issued,
is 800 600, 900.
Between the 3ist Of August, 1860, when
the amount of United States notes outstand-
ing was at its highest point, and the 4th o;
ton of the amount in actual circulation, linn
tied by the act of Feb. ~, 1866, to not more
than $40, 900, 900 within the then next six
months, and thereafter not more than 81 900,
900 in any one month. Ga the 4th OF Feb
ruary, 1868, Congress passed an act suspend
ing further reduction of the currency when
the amount outstanding was 1856, 900 600, and
that sum is nov, the minimum limit of issue.
But the law authorizing the issue of the max
imum of $500, 1000, 900 has never been re-
pealed, and has uniformly been held by the
Treasury Department and the law officers
thereof to be in full force. In view of the
uncertainty which exists in public senti-
ment as to the right Of the Secretary of the
Treasury to issue United States notes in ex-
cess of the minimum, and the conflict Of OPP
nion as to the policy Of doing so, conceding
| that he has that right under the law, | re
spectfuly recommend that Congress shall set
these questions at rest by distinct enact
men.. Until that is done, whenever there is
a stringency in the money market there will
continue to be pressure upon the Treasury
Department, by those who favor policy of
| expansion, to increase the issue of notes to
the maximum by the purchase OF bonds or
otherwise while on the other hand, those
who conceive that the public interest will be
better served thereby will bring equal pres
Assuming that it ia the settled policy of
Congress, as declared in the act OF June 80,
1864, above cited that the total amount of
United States notes, issued and to be issued,
shall never exceed $500, 100000, l am of
opinion that it would be unwise to require the
amount in actual circulation to be kept up to
| the maximum or to any amount above the
present minimum. The Treasury, depend
ing principally upon the receipts from customs
and internal taxation, without the power of
borrowing or otherwise increasing its resour-
ces, with liabilities created by Congression-
al appropriations which must be met in cur
rency to the extent of nearly $780, 100000 a
year, ought always to have large reserve
upon which it can draw to meet the ordinary
demands upon it in case of emergencies, when
the revenues suddenly and unexpectedly
diminish by reason Of national calamity or
financial arrangement, which from time to
| time are liable to occur in all nations. Such
reserve is also rendered necessary by the
fact that the fractional currency, authorized to
| be issued to the amount of $50, 900 900, now
in actual circulation to the extent of more
than $40 200, 900, is redeemable in United
States notes at the option of the holders. In
order that there ruay be no misunderstanding
| as to the circumstances under which the
amount between the minimum and the maxi
mum may De ISSUED, anu, tnat IL may not be
issued for the purpose of initiating the paper
currency of the country, recommend that it
| be declared a reserve to be issued temporarily
when the ordinary demands upon the Treas
ury shall require 1t, and in payment of such
demands and for the redemption of fractional
| currency, the amount so issued to be returned
to the reserve as soon as the condition of the
Treasury shall warrant it, aud that the pur-
chase of bonds shall be forbidden so long as
the outstanding United States notes shall ex-
coed the minimum fixed by the act of Feb. 4,
| 1868. l believe that such reserve, so re-
strcted, would be proper and reasonable
protection against any contingencies whereby
the revenues of the country might temporari-
ly be diminished, and would give no reasona-
BILE cause TO fear permanent initiation. AS it
ought not TO be the business of the Treasury
ID apartment to increase and diminish the
amount of legal tender notes from time to
time. according to the coalition of the money
market. and for the sole purpose of affecting
that market, | think it would be unwise to
authorize tine reserve to be issued, except for
the purposes and in the manner which have
suggested.
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