The New York herald., 1874-05-16
The Senate Finance Bill.

Auo UAA WHICH uas phkssou tAo OcAAoo0 ="
such q fagrant measure Of initiation that it is
certain to be stranded on o new veto, as
appears by our Washington dispatches this
morning, if it should pass the House and
reach the President. 1t is such bold
and daring defiance of the President;
il discloses such an evident willing
ness to provoke another veto, as to indicate
the settled hostility Of the inHationists to Cen
eral Grant and their reckless determination to
break with him at whatever cost to the unity
of the republican party. We have only to ex-
anime the provisions Of the bill in the form
in which it passed to perceive how entirely it
is project of imitation. 1t releases the benks
from their present obligation to keep home
reserves to redeem their circulation, and re-
quires them, in lieu of such reserves, to de-
posit in the Treasury of the United
States ON amount of greenbacks equal
to five per cent of the circulation.
The effect of this provision would be to
unlock and pour into the channels of busi-
ness the difference between q five per cent
reserve and the twenty-five and fifteen per cent
reserves which the banks are now required
to keep. Taking the national bank circula-
ton at its present legal limit Of 1854. .O0O, 900,
and reckoning the average reserves of the city
and county banks at twenty per cent of their
circulation, an amount Of greenbacks would
be released equal to fifteen per cent, adding at
once $50, 10000 to the available currency of
the country. But this is bagatelle in
comparison with the inundating foodgates
opened by other provisions of the bill. 1t
permits an unlimited issue of practically
irredeemable bank notes, slightly mitigated
by the withdrawal Of greenbacks equal to
twenty-five per cent of the new bank issues. If
the amount Of greenbacks to be withdrawn were
the same as that of bank notes put in circu-
lation the currency would be neither increased
nor diminished by the new bank issues. BY
the actual provisions of the bill every
$780, 900, 900 of new bank notes will initiate
the currency $70,000,000 up to o certain
point, and that point once passed,
every additional 500, 100000 of bank
notes will initiate the currency $95, 600, 900.
For the present, and until the volume of
greenbacks is reduced to $500, 900,
$50, 900, 600 Of greenbacks would be taken out
of circulation for every $100,000,000 of bank
notes emitted-namely, the five per cent re-
serve deposited in the Treasury and twenty
five per cent retired according to the require
ment of the bill Free banking, as it is
called, would at first initiate the currency to
an amount equal to seventy per cent Of the
new bank issues. Initiation would proceed at
this rate until the greenbacks we're reduced to
$500, ,OOO, 900, when it would advance at the
accelerated pace of ninety-fve per cent Of the
new bank issues, because the five per cent re-
serve would be the sole diminution of green
backs required afterwards.
Let US suppose the experiment to proceed
until the 1882, 900, 900 fixed by the bill as the
maximum greenback circulation is reduced to
the $500, 600 900 established as the minimum.
What would be the total amount of currency
at that stage Of the experiment.? It may be
correctly stated as follows -
United States notes. $500 OO0 900
Present authorized bank circulation. 354, 900, 900
Four times the WITHDRAWN greenbacks. S2So0o,o 600
Total. 80. $972 600, 600
This would be an addition of 1896, 900, 900
to the present amount Of currency, with q
prospect of more rapid imitation after the
limit of $500, 100000 greenbacks had been
reached. No sensible man can doubt that so
wild and insane q measure will encounter o
new veto if it should ever reach the Presi-
dent If any simple minded citizen should
imagine that the show of redemption paraded
in this bill may arrest the progress Of infa-
ton we can easily undeceive him. Every
man Of sense who will consider its redemp-
ton features must perceive that they are q
delusion and snare. When, in virtue Of
this bill, would the owner of o greenback re-
ceive its face value in gold? On the 1st of
July, 1893, and not day sooner. BY waiting
until the LIST of July, 1878, more than four
years, he could exchange greenbacks, if he
should happen to possess $1,000 of them, for
four and half per cent gold bond, paya-
BILE in fifteen years; so that nineteen years
from next July is the earliest period OF which
he can expect to recover in real money the
debt due him by the government for which he
holds it's notes. On this debt. due now, he is
to receive no interest at all for four years, and
afterwards, an interest Of four and hnlf per
cent, though he might easily loan the money
for seven per cent, if he could recover
it. He is defrauded of seven per cent for the
first four years and two and half per cent for
the other fifteen, making dead loss of sixty
five and a half per cent by the misfortune of
being creditor of the government The bill
makes it optional with the Secretary of the
Treasury to redeem the greenbacks in bonds
or gold after four years. But as four and q
half per cent bond will not rise to par he will
redeem in bonds and not in gold. BY this
BILL therefore, specie payments are nineteen
years distant If it should be thought that
the provision for redeeming bank notes in
greenbacks will check imitation, that is also o
| delugion What possible motive can there he