Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1874-12-24
THE NEW FINANCIAL BILL.

There will be introduced in the Senate
to-day a bill for the resumption of specie
payments, which has been agreed on by a
caucus OF Republican Senators with only
four dissenting votes. If pushed, there is
no doubt it can pass the Senate. and
probably the House as well. The meas
ure has several features entirely novel. In
the first place, it declares day certain
for the payment in coin of the Govern
ment notes; in the second place, it author
ICES the Secretary of the Treasury to bor-
row coin on the bonds Of the Government
to meet the payment of the notes; in the
third place, it directs the immediate sub
stitution of silver for the fractional curren-
cy, and provides the necessary means to
carry out this requirement. Every one
will concede that these are substantial ad-
vantages. Embodied in one bill they con-
stitute a long step, and probably decis-
i've one, in the direction Of payment of the
Government notes. The Senate caucus
bill is based unqualifedly on the fact that
these notes must be paid. 1t does not
cvade that obligation, or seek to get rid Of
the sacrifice necessary for that purpose.
In this respect it radically differs from any
bill which has received anything like the
same support.
Two objections will be made to the
measure. and both will have considera-
BILE degree Of force. One is that the time
of specie payments is put off long while
-four years. We think it could, with adj
vantage, have been placed at a nearer
period, but we regard this as point not
SO important in reality as in seeming.
There are powerful forces constantly at
work, the operation of which has been
hitherto checked only by the doubt as to
when the Government would redeem its
promises, which tend to bring the curren-
cy Of the United States to an equality in
value with coin and it would not be very
surprising, should the Government take
no backward step, to see the enactment Of
the bill now proposed bring legal tenders
to par long before the time set to redeem
them.
The second objection which will be
made to the bill of the Senate caucus is
that its first effect-as soon as it has any
effect-will be to produce an initiation of
the currency. Banking is made free, that
is the limitation as to the amount of issues.
secured as required by law, is removed.
For every 800 of new issues under this
provision, $50 of legal tenders are TO be
redeemed. This is an increase in the vol
ume of the currency Of twenty per cent.
of the additional bank ISSUE 1t is stated
from Washington that the twenty per
cent. of greenbacks lett unredeemed will
be required as reserve for the national
bank notes put out. But this is not GER
tain. Reserves on circulation alone were
abolished by the act of last June, and
though the new issues will probably be in
great part deposited in bank, and thus re-
quire reserve against them, this would
Dc 80 luuIcCt anu contingent an opera
ton that it could hardly be counted on. In
forecasting the probable effects of the pro-
posed bill, it may as well he assumed that
the first result TO be anticipated will be in
flation.
But this is counterbalanced by the fact
that, as the national bank issues are in
creased and the greenbacks Withdrawn,
the former being redee mable in the latter.
and system of redemption at Washing
ton being provided, the inducement to
present bank notes FOR redemption be-
comes constantly greater, and the check
on over-issues by the banks continually
stronger. Thus, by the time the Govern
ment notes are reduced to $500, 600, 900,
a provided in the bill, the national bank
notes will have reached Si56 800, 900; i.
e., the greenbacks will be to the bank
uotes . two to three. Il is plain that
when this occurs the greenbacks will be
Al tx.vA nnd hnt