Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1874-05-21

more than S10000,000 may be retired and |
Cancelled within six months of the passage |
Of this act, and thereafter not more than |
S4,OO0000 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 outs landing was 1856, 000, 900, and
that is the limit below which the United
States notes cannot be reduced without
Congressional enactment. Under the
operation of these statutes successive
Secretaries of the Treasury have assumen
the right to reissue at their diScretiOd
$4,000, 900, that is, the difference be
tween 1856, 100000 and S400,000,000, and
to withdraw the same again from circula-
ton. Since the 1st of October last there
have been issued of these notes by the
Secretary of the Treasury $4,000, 600,
making the whole circulation Of United
States notes 1882, 100000.
The right of the Secretary to reissue
any part of this forty-four millions, or to
increase the circulation of these notes
above three hundred and fifty-six millions,
has been continually denied by many
| lawyers in Congress and out Of it, and
large portion of the press; and the ques-
ton cannot be said to be free from
doubt
In his veto message, and in his letter to
Messrs. Claf1in and Anthony on the 2Sth
of September last, the President treats
the forty-four millions as being an exist
ing reserve, a sum Of money already in
the Treasury, as much so as a like sum
received from taxes, to be used at the
discretion 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 $500, 900, 900, that is,
the amount beyond which the issue shall
not be extended. The word maximum"
means the greatest. 1t does not mean
the precise amount, but simply the
amount beyond which the issue can
not go.
| The section relieved the Government
| from the exercise of doubtful power,
which had been 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
| $1S,O00,O00 of the $4,000 900, and it was
proposed by some that the language of
the section should be so changed as to
require that amount to be put into circu-
| lation and kept outstanding. But it was
determined 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 10
the amount of $46,000000, to be distrib-
uted among the States having less than
| their proportion upon the basis of the
| act of 1865, the new banks to be estab-
! liShed upon the terms, liabilities and re-
| strictions imposed upon existing banks,
! being required to secure their bills by de-
post 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 restriction
that all banks, old and new, shall keep
One-fourth of the coin interest they re-
ceive upon their bonds deposited for the
security of their notes. This provision
! looked forward to the resumption of
specie payments, and was the first step
that had been taken in that direction by
| Congress.
The $46,000,000 provided for came full
| $30,000,0O0 short of equalizing the distri-
| button among the States upon the basis
4
! New England States were entitled to less
than $4,000, 000 but received $110,000,-
600, and the other Eastern States had an
excess of nearly $12,000,O00.
Whether the volume of the currency is
sufficient for the business Of the country is
a 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 contraction re-
sulting from the growth of population
and business. A majority OF Congress
were of the opinion that to produce a res
toration of confidence, a speedy revival of
business and return to the prosperity
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 become
law would have produced some contrac-
ton is undoubtedly true; but it would
have been almost entirely in the stock
market in New York. 1t is well-undeF-
stood fact that the reserves of the West
ern 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 to stimulate unwhOlesOme
| speculation, and have been OF very little
| benefit to the mercantile or manufacture
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 return were not able 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 quarter where
| it is pretty we'll understood that cOntrac-
ton would do no harm.
The act of 1869, to strengthen the pub
| lie credit declares that " the United States
solemnly pledged its faith to make pro
vision at the earliest practicable period
| for the redemption Of the United States
notes in coin" In the debate upon this
bill nobody has denied the character or
! binding force of that pledge, but the
| question as to the "practicable period"
| for its performance remains as open as it
was upon the day it was passed. Very
| few members of either house of Congress
have agreed upon any method for the re-
sumption of specie payments. A few are
in favor of boarding the gold in the
| Treasury until enough has been acquired