The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-01-15

Secretary Boutwelps Power to Issue $44, 600, 900
United States Notes Denied.
Report Of the Senate Committee on Finance
Power Must Not BE Inferred by Subtle Rea-
soning"- Assistant Secretary Richard
son Exonerated from Blame.
WASHINGTON. Jan. IA, 1879,

WASHINGTON, Jan. IA, 1879,
The Committee on Finance, in obedience to q
resolution Of the Senate OF the 9Th instant as fol-
lows:-"Resolved, That the Committee of Finance
be directed to inquire whether the Secretary OF the
Treasury has power, under the existing laws, to
issue United States notes in lieu OF the 50 1000 600
OF notes retired and cancelled under the act OF
April IL, 1885," report that construction Of the
act OF April IL, 1856, rendered necessary the exam
nation Of the several acts authorizing legal tender
notes. The power OF the Secretary OF the Treasury
to issue the notes described In the resolution It
exists, must have been conferred by these acts
The authority Of Congress to authorize their issue
has been disputed, but may now be con-
sidered as settled by all departments of the
government 1t was exercised by Congress- only
under the most pressing necessity, as an incident
to the powers to borrow money, to coin money, to
declare and maintain war and to provide for the
national defence and general welfare. It was first
asserted and exercised by Congress February IS,
1862, when to coin the public credit into money
seemed the only expedicnt left to maintain the au-
thority Of the government during pressing war.
This authority was again exercised July II, 1862
and March 8, 1868. These several acts declared the
United States notes to be
LAWFUL MONEY AND LEGAL TENDER
IN payment OF all debts. public and private within
the United States except for duties on imports and
interest on the public debt and were required to
be issued only II required by the exigency of the
public service, for the payment OF the army and
navy and other creditors OF the government. The
amount of each issue was carefully limited. The
aggregate could not exceed $3.50 000O0 anu III fact
never exceeded $4ss, 1e0, 500. The power thus ex-
ercised was felt to be q dangerous one, liable to
abuse and was carefully limited and guarded
though the war continued two years and more
immense sums were borrowed upon various forms
Of security. The limit of United States notes was
After further argument the commjttoe cav that
the act OF April IL, 1886, referred to IN the resou
ton OF the Senate, was passed in approval OF and
Culloch, the Secretary OF the Treasury to retire
all short time liabilities by funding them into
notes so that those remaining outstanding should
be from their scarcity at par with gold.
THE ONLY LIMITATION MADE
70 the power OF contraction was by the following
Provided That Of United States more than ten
Of dollars may be retired ana cancelled within
not SnS
1t is clear that this act authorized the payment,
cancellation and destruction OF all obligations
issued under any act OF Congress whether bearing
interest or not and the issue In lieu thereof OF any
March 8, 1885. The issue Of bonds necessarily In
volved the destruction and cancellation for all time
OF the obligations received IN exchange for the
bonds, for the act declares that 1t should not be
construed to authorize any increase Of the public
debt To hold that any OF the obligations, whether
States In exchange for its bonds could be re.
issued again IL utterly
No0NsisTEN1 WITH THE PRIMARY OBJECT OF THE
the fundfg OF the debt and with the provision that
the debt should not be Increased by the EXCHANGE
United States notes ali Of them might have been n
sn &c y es s fss sSd g.
the Secretary to increase the debt In direct viola
ton Of the act. To evade the act he would only
nave TO receive the notes In payment Of bond IS
their place. In this way both notes and bonds
would be outstanding The plain intent Of this act
was
TO REDUCE AND CONTRACT THE CURRENCY.
TO render this more apparent the committee
refer to what preceded the passage Of the act Of
it is evident that the act Of February l. 1865, was
could as well have been arrested by the reissue of
the notes. That act passed when 1t was alleged
contraction was too rapid, and not passed to re-
on the contrary, only suspended the power exer.
cised after the passage OF the act OF 1885, From
States notes the committee conclude that the in
tent and legal erect OF these acts, when fairly con-
strnsd to reduce the MAXIMUM OF legal tender
increase that sum. The care with which
MAXIMUM WAS ALWAYS PRESCRIBED
indicates the intention Of Congress to preserve
one. The only contingency for an excess was to
, meet ,ns Loan and by the
1t is said that since the passage OF the act of Feb
ruaryA 1858, large sums OF United states notes
surplus fund in excess OF saSe 900 in circulation
for the purpose OF meeting any sudden demand
upon the treasury; TINS was necessarily So as
mutilated, defaced or endangered by successful
counterfeiting, but no issue in excess Of
one Of these 500 900 was issued after the Chicago
fire, to replace that amount burned and destroyed
81 az g ng
notes were issued only In advance Of the formal
proof and allowance for the destroyed notes, but
ton. The other is stated by the Secretary OF
the Treasury IN his letter Of December 10, 1872,
AMOUNT Of tNfTsD STATES NOTES IN CIRCULATION
was Increased In October last, upon the order Of
Assistant Secretary Richardson, then Acting Sec
OF about I'VE million dollars over the amount out
standing when the act OF February 4, 1858, became
law. The object OF the issue was the relief or the
business OF the country. then suffering from the
large demand for currency employed In removing
the crops from the South and West. The condition
the Secretary, 40 he says, to have warranted the
issue upon
GROUNDS OF PUBLIC POLICY.
The committee say that no sooner was this
power claimed than 1t was at once contested. 1t
is scarcely possible that II such power existed it
greater stringency. 1t may be any argument why
some power ought to be granted to issue United
States notes to meet an emergency, and 1t is based
grounds Of public policy which control the action
Of legislative and not executive authorities. The
committee say they were referred to two decisions
OF the Supreme Court as sustaining the power OF
the Secretary OF the Treasury to issue United States
full examination OF these cases shows that
they have no bearing upon the question before
the committee. The circumstance under which
this issue OF 5000 900 was made were such as
would clearly have justified It's exercise II, as was
honestly and confidently claimed by the onicer
who made the issue, he had the legal authority to
make II. 1t was his plain duty to exercise every
power he possessed to protect the public In the
emergency stated, and
that the Assistant Secretary acted according TO
what he conceived to be his legal power and pub
lie duty; but, believing that under the law he
could not issue legal tender notes In excess OF
$3.50, 0O0, 900, they must regard the precedent as
bad one. In conclusion the committee say =
power over the currency 80 wide-reachlng as
the power to issue 50 600 600 Of new legal tender
mt IN oun haf M iunnlicQ.