The herald and mail. [volume] (Columbia, Tenn.) 1873-188?, 1874-12-18

! circumstances than in a tim6 n the most
| pressing and urgent need, such as a state On
| war only produces. The most earnest defend
| ers of the power to issue government obllga-
| tons, and make them by law legal-tender for
| all debts, public aud private, would scarcely be
| found to advocate the exercise OF the power
/ except under circumstances of extreme neces-
| sity, and then only for the time OF the emer-
| gency; and there is abundant evidence IN the
| debates and proceedings OF congress, aud IN
| the statutes themselves, that II was not IN
| tended to make the legal-tender notes the
| permanent currency of the country. The acts
| authorizing the issue OF such notes provided
| for their conversion into bonds of the United
| States bearing interest at the rate OF SIX per
| ceLtum per annum.
1.-The act OF March Is, 1859, in terms de-
clares that the faith of the United states ~
| solemnly pledged to the payment in coin or lts
! equivalent of all obligations of the United
States not bearing interest, known as United
States notes. The same act further atiirms
that the United States solemuly pledges IT'S
faith to make provision at the earliest practi-
cable period for the redemption OF the United
States notes in coin.
in it's title, which declares it to be An act to
strengthen the public credit and that such
was the effect of the act cannot be doubted,
for it is an unconditional ass rance on the
part Of the government, not only that its notes
shall be paid in coin, but that this shAll be
done at the earliest practicable period. The
faith Of the government could not be more
clearly or absolutely pledged than il done by
this act of congress, to say nothing OF previous
legislation.
since the final overthrow of the rebellion, as
we'll as proper regard for tie faith OF the ma
tion. admonsh us that intiatory steps towards
the redemption OF its pledges ought not to be
longer postponed. 1t is not unworthy OF re-
mark that the era OF the war "lll not be closed
until the period Of redemption shall have been
reached.
I'm a country like ours, with varied indus
tries and extensive commercial relations
among it's different sections and with other ma
tions and peoples, stability OF The circulating
medium is indispensable to the general pros
peritv Credit which necessarily enters
largely into commercial transactions, eau only
be steady and secure when II has Tor 1T
foundation a stable currency. The quality OF
stability in money attaches only TO CON, Whch,
by common consent of mankind, IL the me-
dium OF exchange, and to a paper curren,y
representative OF coin, because convertible
into il at the will of the holder. The reason
is obvious; for coin, besides being recogn zed
throughout the the world as medium OF OK
change has a high intrinsic value, can be
procured only bv labor and in limited quanti-
ties which cannot be increased by statuatory
laws nor suddenly by other means, While IN
convertible paper money may be produced III
indefinite quantities at a nominal cost, note
o
than the lowest, and its volume depending
solely on legislative enactment.
a dollar legal-tender note, such az IL now |
in circulation, is neither more nor less than |
the promise of the government to pay dollar |
to the bearer, while No express provision II |
made by law for paying the dollar at any time |
whatever; nor Ia there any existing provision |
for converting it into anything that stands IN /
a tangible ratio to coin dollar. As TAR az |
existing laws 60 there is no reason why the /
legal-tender no OF the demon nation OF /
dollar should pass for one cent Of gold, except /
80 faT as the government compels creditors to
accept it in discharge of obligations to pay
money, and obliges the wealth and commerce
OF the country to adopt it as medium OF eA-
change To this may be added, a. an element
of the value Of the legal-tsnder dollar, the
hope that the government will sometime or
other redeem its paper promises according 10
their import. The univei sal use OF, ana re-
lance upon. such currency tends to Dlunt
the moral sense and repair the natural self
dependence of the people and trains them TO
the belief that the government must directly
assist their individual fortunes and business,
help them in their personal afiaira, and enable
them to discharge their debts by partial pay
ment. This inconvertible paper currency be-
Dets the deIusiou that the remedy for private |
distress il in legislative measures /
and makes the people unmindful OF the fact /
Rat the true remedy il in greater production
and less spending, and that real prosperity |
comes only from lLdlNlAuhl cuOIL anu tAlAlb
When exchanges are again made in coin, or IN
a currency convertible into It at the VIII OF the
holder, this truth will be understood and acted
lpOn.
1T is obvious that there can be no resump-
ion bv the government 80 long as the volume
1f paper currency il largely in excess OF the
possible amount of coin available for that pur-
pose which may come into the treasury IN any |
FEAR, and while no provision Is made Tor the
of this paper money INTO anything
HEHH N
,ibie for the banks or people to resume 80
Ong as the large smOunt Of lrred9emable pa |
Der now in circulation continues to be by law
egal-tender for all private debts with refer
,nce both to the past and the future. Mhue
his state of things lasts gold will continue 70
low from us. and find employment where the
natural laws of trade, unoi structed by refrain
5le. e
The secretary, therefore, recommends con,
yress to provide by law that after an early ana
ixed day United States notes shal cease 70 be
egal. tender as to contracts thereafter made.
But this provision should not apply to Official
salaries or to other ordinary expenditures oi
he government under then existing contracts
,r appropriations. Between the day thus to
De fixed and the time OF final resumption
period should elapse TO enable the
people and banks to prepare for the latter by
such gradual processes in business as viii
neither lead to violent contraction IN cIedt
and values, nor suddenly lllCitdno bLlo NDilkN- |
ions Of debtors. The time should not, IN the
ppinion of the secretary, be extended beyond |
hree wears and might safely be made az much |
ess as in the Judgment Of congress woull
protect the interest OF debtors and
lvoid the evils of too sudden contraction
&" The law should also authorize the lmne- |
late conversion OF legal-tender notes into
ponds bearing low rate OF interest WHICH,
while inviting conversion, should not be 40
1igh as to appreciate the legal-tender notes
.apidlv and thereby operate Oppre-slHeIy Oh |
he debtor class As an additional inducement |
% the conversion Of United States notes into |
hese bonds at a low rate OF interest, authority
,hould be given for making them security Tor
he circulation Of national banks Inc law
lhould further provide the means Tor the re-
lemption Of such notes as may pe presented
or that purpose when the period OF resump-
ion shall have been reached. To this end, the ,
,ecretarv should be authorized to make a loan
lot exceeding the total amount OF notes re-
naming unconverted at the time OF resump-
ion less the surplus revenue, TO be made
,nDIicabIe 10 sucb resumption. 1t il probable
hat the gradual aud continued revival OF
business will 80 far increase the revenues that
large loan will not be required Tor TINS pul-
,ose but il il advisable that the secretary De
to make 1t IN order TO meet lhe
contingency of a failure Of sufficient surplus
@ enues Such a loan should DO made by Ia
uing bonds to run for such time a. the Wis
om Of congress may suggest, ana 10 ne ni--
DO-ed OF from time TO time rs the utce@HlLleH |
4 the case may require. In the opinion OF
he secretary these bonds should tun Tor
Dng period, and should bear interest at a rate
ot exceeding the lowest rate which the gov
rument may then be paying in refunding its
tx per cent. securities. Any substantial or
seful movement for resumption necessarily
lvolves supplying the treasury with increased
mounts OF coin, either by increased revenues
r an adequate loan. The present cOndiiou
f the credit Of the government, which would I
o further enhanced by the adoption Of meas
res for return to q specie basis, leaves no
Dom for doubt that n loan for snch purpose
'ould be readily taken at low rate OF inter
st. Measures should also be adopted requir-
lg the banks to hold gold reserves prepara-
Dry to resumption on their part.
" But the secretary does not deem II proper q
0 pursue the matter into further detail. II !
ongress shall conclude, as he earnestly hopes
Will, that the time has arrived for the enact Z
lent of a law having for its object resump-
on OF specie payments, its own wisdom viii 7
lpply the necessary methods. hat which ~ | 4
the highest Importance is the adoption or n
efnite policy for resumption. When the gov
rnment shall have resumed specie payment | .
may be expected trat gold will flow into the
ountry in obedience to tho law Of supply and {
emand the export Of our gold product will s
realty diminish and the millions OF gold A
hich now constitute only a commodity OF | Y
,ade will resume its proper functions by be-
oming again a part Of the circulating medium. | .
yith the adoption Of the policy Of resumption, Z
rec banking may be safely allowed, and the =
efcit OF the actual amount Of coin available