New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-06-08
THE FINANCIAL PROBLEM.

THE FINANCIAL PROBLEM.
NEW BILL AGREED UPON BY THE CONFERENCE
CoMMITTEE-ITs LEADING FEATUREs-vIEws OF
CONGRESSIONAL FINANCIERs AS TO ITS EFFECT
If PAssED-BEIIEF THAT IT WILL RESULT IN A
VIOLENT CONTRACTION OF THE NATIONAL BANK
CURRENCY.
TBY TELEGRAPH TO THE TRBUNE1
WASHINGTON, June THE Currency Conference
Committee have agreed upon bill the features of
which are substantially the same as have already
been announced. They are free banking abolition
of reserves on circulation except per cent to be
kept at the Treasury, retirement Of greenbacks at
the rate of 374 per cent of the amount of new Ma
tiOnal bank notes issued, and redemption in gold
or per cent bonds Jan. l, 1878. AS the Committee
meets again tomorrow, they may yet modify this
plan in some particulars.
When the Conference Committee had its talk with
the President they understood him to say that he
would sign bill containing the above provisions,
except that he desired the resumption to take place
during his term Of Office. In order, therefore. to
meet his supposed views they were inclined to CON-
promises but the next day the Presidents manifesto
appeared, and convinced the Committee that he
would sign any bill that they could agree to- and
they have concluded that it was best to report a
moderate BILL and If 1t passed. to let the President
veto it.
Some of the ablest financiers of Congress have
been discussing yesterday and to-day the probable
result of the passage and approval of currency bill
such as that proposed by the Conference Commit
tee and it is the general belief that instead of caus
ing an expansion of the circulating medium of the
country, it would cause violent contraction of the
National bank currency. From present appear
ances they say should the bill referred to become
law it would stand during the remainder of Gen.
Grants term, since if the next Congress should
attempt to repeal it, the President would veto the
Repeating act and though it is possible that it
might be passed over his veto in the House, pos
sible change in the Senate give the intatiOniss
there a two-thrds majority in the next Congress
Should the Conference Committees bill become
law, therefore, it would in all probability be exc
cuted and Congress would be obliged to pass such
additional laws as would enable the Secretary of
the Treasury to redeem the greenback circulation in
gold or bonds on the 1st of January, 1873 If the
redemption is in per cent bonds the premium on
gold, reckoned in greenbacks, would depend on the
value of those bonds at that time. The value of
United States bonds, these gentlemen say, depends
on three things viz, the credit of the Government,
the time the bonds have to run, and the rate of in
terest The last two of these are known elements
and there is now no reason to predict depreciation
of the Government credit before 1873. 1t is fair
therefore, to presume that since per cent
bonds are above par now, they will be
worth at least par in gold in 1873, and
that greenbacks being convertible into them,
will therefore be of equal value. In other
words, greenbacks would, under the operation of
this BILL appreciate in value Is per cent in three
years and half. Under the present banking laws
many of the National banks find it more profitable
to use their money in other ways than to invest it
in bonds to procure circulation and now anxious
to withdraw their notes altogether. If in addition
to this the Government offers them premium of
Is per cent at the end of 81 years not to acquire cir
culation every one who now contempates estab-
fishing National bank with circulation will wait
at least until 1878.
If this theory is correct the passage of bill con-
tanning the provisions referred to would result in
violent contraction of the National bank circula-
ton, the very kind of currency which it is not de-
sired to contract and will not affect the amount of
the legal tenders. These the conclusions Of men
who will not vote for such bill if it is reported as
the Committee contemplate, and if they are ac-
cepted are striking commentary the financial
ability of the leading inhatlonists III Congress,