American citizen. [volume] (Canton, Miss.) 1864-1890, 1873-10-11
During the time that Mr.. Mccullough |

During the time that Mr.. Mccullough
was Secretary of the Treasury OF the
United States, forty four millions of dollars
of legal tender notes were WITHDRAWN
from circulation, and are now in the
treasury of the United States. 1t is CLAIM
ed by the present Secretary OF the Treas
ury that he has right To reissue these
notes and withdraw them again at pleas
ure About five millions of these notes
were reissued and loaned without inter
est to certain banks in the city of New
York, both after the Chicago fire, and
after the late Boston fire, and were subse-
auentlv Withdrawn. The power to issue
and Withdraw such an amount of currency
is too great power to rest IN the hands
of any one man. The issue of these notes
was probably judicious, and may at the
time have averted general financial dis
tress. They were perhaps withdrawn with
equal good Judgment. Is there not, how
ever, a mode by which the currency needs
of the business public OF the United States
may be met in crises like these, and also
during those periodical crises which are
experienced with more or less force each
autumn, by a system which will be auto
matte in its action, governed by the will
or judgment of no single man? 1t is be
lieved that this is entirely practicable and
within easy reach. The following propo.
sition was submitted through the daily
papers both East and West, last autumn.
1t has been quite generally discussed, and
tine comments on it have been favorable.
No serious objection has been urged
against it, and it is believed by many
thoughtful and experienced business men
and tinanciers that its adoption and en-
actment by Congress would be exceed.
ingly beneficial to the whole country
The proposition is as follows:
ITO permit any holder of ten thousand
dollars or multiples thereof in any gold
bearing bonds of the United States, to
retire the same temporarily, at the sub
Treasures or designated Repositories in
New York, San Francisco, New Orleans,
or Chicago. under regulations to be made
by the Secretary of the Treasury, and re-
ceive an amount of United States Legal
Tender Notes equal to the face Of said
Bonds temporarily retired; and upon pre-
sentation of like sum in United States
Notes at the place where said Bonds were
| temporarily retired, to receive the said
Bonds, or their equivalent in kind, less
the interest which would have accrued
| during the time that the said Bonds were
temporarily retired; and provide, further,
that the Secretary of the Treasury be re-
quired to hold IN reserve United States
Legal Tender Notes to the amount of
forty four millions of dollars, to be used
for the purpose of temporarily retiring
United States Bonds as aforesaid; but the
said notes shall not be used for any other
purpose, nor shall the whole amount of
United States LegaLTender Notes, in
Guiding those which may be held in re-
serve and those which may at any time
| be held in the United States Treasury,
Sub Treasures and Repositories exceed
four hundred millions of dollars, until
expressly authorized by law
The rate of interest which money CON-
manded on ample security during the
winter of 1S12-1S73, in New York City,
reached and exceeded the rate of three
| fourths of one per cent. per day, which is
| equal to the enormous rate of 273x per
| cent. per annum. During the summer of
| 1873 common rate of interest at the same
place, on like securities, was three per cent
per annum. Here is difference in the
rate of interest of 2702< per cent. within
six months. This indicates the pinch and
plethora throughout the country. There
were times when, outside of New York,
money could not be borrowed at any rate
of interest, and if currency had been de-
manded in New York it could not have
| been had even at these rates, in any large
| amount, for the banks of that city were
far below their reserves.
If the proposed law had been enacted,
| the money markets of the whole country
would have been relieved by the deposit
of bonds in the Sub Treasuries and the
outflow of greenbacks from the 81 ,OOO,-
600 reserve, and when money reached the
low rate of three per cent per annum,
those whose bonds were in the Treasury
| bearing interest at the rate of five per
| cent gold interest, would certainly have
returned greenbacks and have Withdrawn
| their bonds, thus contracting the currency,
and we should have been prepared to re-
| peat the same movement for expansion
this autumn.-ChicdgO Standard.