The New York herald., 1874-03-25

| Sumter.
There was especially one point in the
speech of Mr.. Senator Sherman yesterday
which has the merit Of being ineligible
Here we are, forty millions of the proudest and
richest people in the world, and yet we have
not the power to resume specie payments.
Americans have never been suspected OF self
depreciation. Yet as MIR. Sherman shows,
the one thing that every American feels should
be done, and without delay, for the honor OF
the country, its commercial stability at home
and its credit abroad is precisely what Con-
gress does not dare to do. On the con-
trary q vote has been passed by the
House which, unless amended by the
Senate, will have in its train graver and
more disastrous consequences than any meas
ure that has for years been enacted by an
American Congress. We refer to the vote in
creasing the volume of the currency This
vote has two unpleasant phases. In the first
place, the country is launched upon wild
sea of uncertain and dangerous courses-a sen
of speculation, imitation and irresponsible
financial legislation. In the second place, we
find two sections of the Union-the West and
the South practically combining to adopt
measures offensive TO the other sections.
This is the spirit of nullifcation and slavery
in another form, and we encounter that bane-
tul element of sectionalism again antagoniz-
ing the best interests of the Union.
We can understand the difficulty of arriving
at result in our financial legislation when
11a -
sixty propositions to ''settle the question:
This shows the national intensity of feeling on
the question of the finances. We do not be-
heve that it represents any special desire for
an increase of currency. We should regard
such desire as unhealthy and morbid, to die
away when the question was honestly dis
cussed; for, whatever may be said of the
American character, it is essentially severe and
strict in matters affecting the national credit
A people who could welcome war in
an hour and wage it for years in
defence of an idea, sentiment of liberty for
a subordinate and uninteresting race, alien
to us in every way, would do as much to
defend the national credit But the people
have never been educated to understand it
and hence the passage of the act of Monday
which means simply further paper money
expansion. A good deal has been said in
Congress about free banking though that
subject was kept in the background on Mon
day. Most of the Western and Southern
members, in that spirit of unreasoning Sec
tonalism to which we referred, voted for the
measure, and are also in favor Of free banking
In fact, some of the members and Senators who
have been opposed to increasing the legal
tender currency favor free banking, and among
them, we believe, is Mr.. Sherman. Of course
there are different opinions as to what is
meant by free banking; but we understand
the term to rnean-as, no doubt,
most of the members of Congress
do-the freedom of banking generally,
anywhere and by any one who chooses to de-
post United States bonds, take out national
bank currency and put up his shingle as
banker.
The argument of those who advocate
this measure is that bonds having to be
deposited, and there being natural limit to
profits on circulating medium, under such
more banks would not be estab-
lished than the country needs. But the temp
tation to establish banks under the system in
operation is great. A man deposits hundred
dollars in bonds This is fixed
capital on which he draws interest. The gov
ernment generously gives him ninety thou
sand dollars in notes, and on this floating
capital he makes at least as much more, and
in most cases larger amount, particularly
where money is worth from ten to twenty per
cent In short, the government kindly
doubles his capital within ten per cent for him.
Who would not be tempted to be a banker
under such circumstances? The next movement
will be, probably, to pass free banking law,
and the argument Will be made, undoubtedly,
that there ought to be corresponding in
crease of national bank currency with legal
tender notes. The East and North are not
willing to give up any of their national bank
circulation, privileges and profits, and the
West and South demand a more equal share.
The indications are that there will be an ex-
pansion of the national bank currency as well
as of the legal tender notes, to what extent
we cannot conjecture at present. But if there
is to be free banking really paper money will
become abundant enough. The best way to
check overissues with free banking law,
and at the same time to bring money into the
Treasury and make the national banks pay
something for their privileges, is to tax their
circulation five or six per cent. This would
not only be just and bring into the Treasury
twenty to twenty-five millions a year, but
would do more to limit the number of
national banks and their circulation than
anything else.
So, step by step, we have the easy descent
into the slough of financial despond The
time will come when we must pay, and why
not now? Or, if the results of the war still
barricade our path, let us take the preliminary
steps toward the result AS Mr.. Adams
showed in the admirable letter read at the