The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-06-12
Debate on the Currency "Com
promise" in the Senate.
The Measure Denounced as
a Sham.
Corruption in the Republican
Civil Service.
Ap0sTAsY FROM PARTY PLEDGES
SENATE.
WASHINGTON, June IL. 1874

luton 10 pay +. w. Sykes, late contestant for a
seat In the Senate from the State OF Alabama, the
salary OF senator from March 4, 1879, 60 May 2s,
1874, the pending question being on the motion
OF Mr.. Hamilton 10 insert $4,000 as the amount OF
compensation, which was rejected.
The question required on Mr.. Carpenters amend
ment 10 insert $4,000, which was rejected by q
rising vote, but Mr.. Sargent trep.l OF Cal, de-
manded the yeas ana nays.
Pending :ne call Mr.. CoNKLING, trep.) OF N. Y,
gave notice that, when in order. he would submit
an amendment providing for the amount Of actual
expenses OF the contest incurred by Mr.. Sykes and
Mr. Spencer, the sitting member, the accounts
therefor to be verified by the oath Of those gentle
men and TO be audited by the Committee on Con-
tingent Expenses OF the Senate.
Tue morning hour expired, and the CHAIR an
nounced that, by previous agreement, the Senate
would consider bills from the Committee on Mill
tary Affairs
THE CURRENCY CONFERENCE COMMITTEE.
Mr.. MORTON, (rep.) or Ind, moved that pending
and all prior orders be laid aside, and that the
Senate proceed to the consideration Of the report
of the Committee OF Conference on the Currency
bill. Agreed to and the report was read at length
Mr.. MORTON explained the report and said this
bill as reported by the Conference Committee takes
away the monopoly feature OF the national bank
ing system, and makes banking lree. Ii aDollshes
reserves on circulation entirely, setting free the
legal tender notes now held In the vaults OF banks
on that account. 1t provides that each bank shall
keep in the United States Treasury a sam equal TO
five per cent OF It's circulation to be held and used
for the redemption OF such circulation, which SUN,
however shall be counted as part OF the reserves
still required to be kept upon deposits by the
banks. The reserve on deposits Is lett precisely
aye ne mo" csna nuS which, Inc reanirsd iess
be kept IN the Treasury OF tue. United States
for the purpose stated. The abolition OF the re-
serves on circulation will set Tree and put IN to
circulation about S27,000,0e0 now kept locked up
In the banks. The fifth section provides that any
national bank may reduce or withdraw It's clrcula-
ton by deposit OF legal tender notes IN the
Treasury in sums OF not less than 1000, and take
up its bonds on deposit with the Treasurer for the
security OF such notes but the amount OF bonds on
deposit Tor circulaIon shall not by this operation
be reduced below $4,000. BY section the entire
not exceed $685. 600 00O which shall be retired and
reduced only in the manner provided in the bill
This ends the idea OF the So 000 900 reserve and
takes from the secretary the power, which be has
hitherto assumed TO possess, OF contracting the
circulation through the surplus revenue down to
$3.50, 000 0o0 This bill provides that within thirty
DAYS after 81, 100000 shall be Issued to national
banks the Secretary shall retire an amount OF
United States notes equal to three-eighths Of the
bank notes so issued, which shall be In reduction
OF the maximum OF $685.. 000, 900. and such reduc.
ton shall continue until the maximum OF United
states notes shall be $500 000 600, and the notes
retired shall be cancelled and carried to the ac-
count OF the sinking fund, provided in the act OF
1862 and the interest thereon, computed at i've
per cent, shall be added annually to the sinking
fund; but II the surplus revenue be not sufiicient
for this purpose the Secretary Is authorized to is
and sell SUFFICIENT amount Of United States
bonds TO cover the notes so cancelled.
The BILL as 1T passedthe senate, provided for a
reduction OF twenty-five per cent OF United States
notes, but. as compromise. 1t has been placed at
thirty-seven and half per cent, which Is just
dividing the difference equally between the origi-
nal report OF the Finance Committee and the bill
as 1t passed the senate. This still permits a
reasonable expansion OF the currency. For every
500 OF United States notes cancelled 500 900 OF
Dank notes must be pu. into circulation, which
win increase the whole volume OF currency So, 500.
When the legal tenders have been reduced by this
bill to $780, 0O0.o 900 the bank note circulation will
have been increased about $21S 900 000 and the ag
sstes Volume . q T ,h have IN been In
on the LIST Of July, 1878, the holders
into four and hall per cent bond. The Finance
Committee, IN the Dill reported By them, nxed the
time for the beginning oil this conversion on the
LIST of January, 1877 AS q compromise. we nave
fixed in this oil on January l, 1873, three and
half years from now. and at that time II author
them into either one Of the three bonds au-
tnorlzed by the act OF 1870, viz. -Four, four aud
bin is that Ave per cent bond viii then be at par
in coin. and that United States notes being con-
vertible INTO them will also be at par; that mean
time United States notes will gradually appreciate
from their present discount TO par and that this
appreciation Will be gentle and slow. not exceed
ing three and a half per cent per annum; so that
specie payments may be brought about without
oppression to the debtor class or arrangement OF
the business OF the country. The bill then pro-
vides That the United states notes received In
change for bonds shall be relssued by the Secre-
tary, either In exchange for coin at par or with
the consent OF the holder In the redemption OF
bonds then redeemable at par, or In the purchase
oil bonds at not less than par to meet the current
payments for the public service, ana wnen used to
meet current payments an equal amount or gold
IN the treasury snail be applied TO redeem nye-
twenty bonds. II f. made imperative that these
notes shall be reissued Tor one or all OF the four
purposes mentioned: II not for the first three then
they TO DE paid out for the current expenses OF
the government, which will make gold surplus in
n received
from whatever source must then be employed IN
the. redemption Of the nve-tweny bonds.
Should the legal tender notes be at
par with coin when the time OF conversion arrives
they Will be equivalent to coin IN the Treasury and
debt; but II not then they must De PAID out Tor
current expenses, and the gold IN the Treasury,
instead OF being used for current expenses, must
be employed 10 redeem the dve-twentles. Should
the theory OF the bill not be realized Congress will
be IN session when the time arrives for the CONVEX
sion OF the notes into bonds and can by legislation
relieve the country or the banks rom any contrac-
ton, arrangement evil resulting from this en-
actment This bill has been prepared In spirit of
compromise, having In view such an expansion Of
the currency as may be necessary TO meet the de-
mands OF the country and, at the same time, bring
the currency, by gradual process, up to par
value.
Mr.. SHERMAN, irep.) OF Ohio, said he thought the
bill fair compromise. Both houses of Congress
desired gradual approach TO specie standard,
and this bill would secure that end.
Mr.. BOUTWELL,, (repl o. Mass said he desired
70 ask the Senator rom Ohio and the committee
what knowledge they had OF the condition OF
affairs which would exist In 1873 which would
Justify this step to specie payments. a step which
they did not dare TO take now. The senate was
asked TO DO thing three years hence which 1t did
not dare 10 do now. and VINO knew what the con
ditlon OF AFFAIRS would be theny
Mr.. SHERMAN said the Senator from Massa-
cnusetts disclosed hts opinion that the country
could not return TO specie payment In ISIS. He
lMr Shermanl believed the United States OF
America had the power and abnity to re-
deem its notes In two years rom this
time and the fears OF these gentlemen
who were unwilling TO take an Affirmative policy
would disappear. He would nave been glad to
have the time fixed Tor 1871 but Yielded his views
on that point order to secure the passage OF the
bill. THIS bill substantially secured results which
had been desired, and he hoped senator's would
not turn their backs upon II.
Mr. MORRILL,, (rep.) Of Vt, said he could not vote
for the report, as ne did not believe the biz pro-
posed to be perfected by II would satisfy ANYBODY
In lts practical operations. He argued that the
bill was on the side OF expansion, and said ~ pro-
vided Tor the conversion OF legal tenders into
bonds alter january 1873. That clause would no
doubt appreciate the legal tenders TO some extent
but at the time ~ would depreciase the bonds
OF the United states.
d..