Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1874-05-15
SsMatOr Morton on the Finance Ques-
.s--atss .. aa tiOn.

OOuTnuG DenhJOT mOTLOn gives MS VIEWS
upon the vetoed Currency bill and the
Presidents veto message. We give the
following extracts from this letter, as
probably embodying the views of those
members of Congress who sustained the
bill In opposition to the President's veto /:
Mr.. Morton says there appears TO be
misapprehension in regard to the provis-
ions of the bill from which the President
withheld his approval. He says the bill
Is criticised as if it authorized a new
emission of United States notes, which
would increase tie difficulty of return
to specie payments, and thereby involve q
breach of the national faith pledged for
the redemption of those notes in coin.
The first section of the bill, and the only
one which relates to United States notes,
is in these words:
"The maximum amount of United
States notes shall be $400,00O,000."
To understand the effect of this provis-
ion, reference must be had to previous
legislation. By the act of June 80, 1864,
1t was declared that the United States
notes in circulation or to be circulated
should not exceed the sum of $500, 100000.
BY the act of April 10, 1865, it was pro-
vided that "of United States notes not
more than $10,000,000 may be retired and
cancelled within six months of the passage
of this act, and thereafter not more than
$4,000, 900 in any one month" On the 4th
of March, 1868, another act was passed
forbidding any further reduction of United
States notes. AT that time the amount
outstanding was 1856 900, 900, and that is
the limit below which the United States
notes cannot be reduced without Con.
gressional enactment Under the opera
ton of these statutes successive Secreta-
ries of the Treasury have assumed the
right to reissue at their discretion $44,-
600, ,000-that is, the difference between
1856, ,000,0 600 and $400, ,000, ,000--and to with
draw the same again from circulation.
Since the 1st of October last there have
been issued of these notes by the Secre-
tary of the Treasury $26, 100000, making
the whole circulation of United States
notes $982, 900, 600.
The right of the Secretary to reissue
any part of this $44, 100000, or to increase
the circulation Of these notes above 1885,
O00, 1000, has been continually denied by
many lawyers in Congress and out of it,
and large portion of the press; and
the question cannot be said TO be free
from doubt.
! In his veto message, and in his letter to
Messrs. Claflin and Anthony on the 2Sth
of September last, the President treats the
forty-four millions as being an existing re-
serve, a sum of money already in the
| Treasury, as much so as O like sum re-
ceived from taxes, to be used at the discre-
tion of the Secretary of the Treasury for
certain purposes.
The first section of the bill declares the
law to be what the President and Secre-
tary have assumed it to be. 1t declares
that the maximum amount of United
States notes shall be $400, 900, 900, that is,
the amount beyond which the issue shall
not be extended. The word maximum
means the greatest Is does not mean the
precise amount, but simply the amount
beyond which the Issue cannot go.
The section relieved the Government
from the exercise of doubtful power,
which had boen the occasion of severe
animadversion.
1t was the wish and expectation of the
friends of the bill that the Secretary
should put into circulation the remaining
$4,000, 900 of the $44,O00, 600, and it was
| proposed by some that the language of
the section should be so changed as to re-
quire that amount TO be put into circula-
tion and kept outstanding. But 1t was de-
termined otherwise, and that the bill
should simply declare the maximum
amount of circulation, and leave the
power and discretion of the Secretary
what they had been claimed to be.
The other section of the bill authorizes
the increase of bank-note circulation to
the amount of SAC ,000, 600, to be distributed
among the States having less than their
proportion upon the basis of the act of
| 1865, the new banks to be established up.
on the terms, liabilities and restrictions
! imposed upon existing banks, being re-
quired to secure their bills by deposit
of bonds, redeem them in United States
notes upon demand over their own
counters or in one of the redemption
cities, and with the additional restrict
tion that all banks, old and new,
shall keep one-fourth of the coin interest
they receive upon their bonds deposited
for the security of their notes. This pro.
vision looked forward to the resumption
of specie payments and was the first step
that had been taken in that direction by
| Congress.
The SAC, ,OO0, 900 provided for came full
$30,000,0 600 short of equalizing the dis
tributiOn among the States upon the basis
of the act of 1865. Under that act the
New England States were entitled to less
than $40 100000, but received $110,000,-
600, and the other Eastern States had an
SASSsS VI hSeiiy PANiVVOJVVV'
Whether the volume of the currency Is
sufficient for the business of the country
is question of fact about which men
may honestly differ. During the four
years preceding the panic there had been
an actual contraction of the currency,
and much larger comparative contrac-
tion resulting from the growth of pOpula-
tion and business. A majority of Con-
gress were of the opinion that to produce
a restoration of confidence a speedy re-
vival of business and q return to the pros
perity which was so suddenly destroyed
by the panic, some addition should be
made to the volume of the currency.
That the bill which has failed to be-
come law would have produced some
contraction is undoubtedly true; but Il
would have been almost entirely in the
stock market in New York. 1t is we'll
understood fact that the reserves of the
Western and Southern banks kept in
New York have been loaned by the New
York banks almost exclusively upon
call to dealers in stocks and have thus
contributed t,stimulate unwholesome
speculation, and have been of very little
benefit to the mercantile or manufactur-
ing community. The evil resulting from
this fact was strikingly illustrated during
the panic last fall. The. stockholders
who had borrowed the money were not
able to repay the New York banks, and
they in turn were unable to pay the
country banks from which the money
had been received, and thus the disaster
of the panic was greatly aggravated. This
bill in effect required the banks outside
of the redemption cities to keep three
fourths of their reserve at home, and
would have withdrawn some millions
from the stock market in New York,
which would strengthen the banks to
which they belonged, and would have
produced contraction In q quarter where
II is pretty well understood that contrac-
tion would dono harm.
The act of 1869, to strengthen the public
credit, declares that the United States
solemnly pledged its faith to make pro.
vision at the earliest practicable period
for the sredemption of the United States