Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1874-05-10
NORTON AND THE FINANCES.
Letter from the Great Indiana Senator,
COrrcctiBg MisapprehenslOns as
to the Finance Bill.
The FOrtJ-FOur Millions Of Reserve
A Sharp Criticism ON The Presi-
DENTS Position, Etc.

In this mornings journal, from Sena
tor Morton: "Tbere appears to he .
misapprehension In portion df tn,
press IN regard to the provisions Of thr
finance bill, which lately passed th,
two houses of congress, but from whici
the President withheld his approval
The bill is criticised as If it authorized
new emission Of United States notes
which |Juld increase the disleElty OF
seIurn to specie Payments, and thereby
involve & breach of the naliona
faith, pledged for the redemption o
these notes in coin. The first section o
the bill, and the only one which relate.
TO United States notes, is in these words
The maximum amount of United
States notes is hereby fixed at four hun.
dred millions of dollars Reference Il
then made to the act of June 80, 1854
April u, 1866, and March A, 1868, tC
show the effect of this provisO. The
right of the secretary to reissue any
part Of this fOrty-four millions, or 10 in
crease the circulation Of these notes
above three hundred and fifty-six mil
lions, has been continually denied by
many lawyers ia congress and out OF it,
and large proportion of the press; and
the question cannot be said to be free
from doubt. At the last session of con.
gress, q majority OF the finance commit
tee Of the senate, through the chairman.
| Mr.. Sherman. reported to the senate,
for its adoption, the following resolu'
ton:
RSsolrsd, That In the opinion of the
senate the secretary Of the treasury has
not the power, under the existing laws,
to issue United States notes for any por-
ton of the forty-foBr million dollars,
retired and cancelled under the sew
ersl committees.
On that subject my first impression
had been against the existence of the
power; but on further examination /
thought it fairly deducted from a
comparison of statistics, and personally
urged upon the President and secretary
the free use of the forty-four million re-
serve, to check the progress of the pam
ic, and alleviate its disasters. In his
veto message, and in his letter to
Messrs. Clafiin and Anthony on the
twenty.eighth Of September, the Pres
ident treats the forty-four millions as
being an existing reserve sum
of money already in. the treasury
as much so as like sum received from
taxes, to be used at the discretion Of the
secretary Of the treasury for certain pur-
poses. He regards the maximum
amount Of United States notes as four
| hundred million dollars, and treats the
| fOrty-four millions as in actual exist
enee. The hrst section of the bill de-
! clsfes the law to be what the President
and secretary have assumed it to be. 1t
| declares that the maximum amount OF
| Emitted States notes shall be four hun
| dred million dollars; that is the amount
| beyond which the issue shall not be ey-
| tended. The other section of the bill
authorizes the increase of the bank-nOte
/ circulation to the amount of foTty-siX
million dollars, to be distributed among
the States having less than their pro-
portion, upon the basis of the act of 1865,
| the new banks to be established upon
the terms, liabilities and restrictions i'm
posed upon existing banks, being re-
quired to secure their bills by deposits Of
bonds, redeemable in United States
notes, upon demand, over their own
counters, or on one of the redemption
cities; and with the additional restric-
ton that all banks, old and new, shall
keep one-f0urth of the cOin-interest they
receive on their bonds deposited for the
security of their notes. This provision
looked forward, and was the first step
taken in that direction by congress. The
forty million dollars provi led for came
fully thirty millions short of equalizing
the distribution among the States upon
the basis Of the act of 1865. Under that
act the New England States were enti-
tied to less than forty million dol
lars, but received one hundred and
ten millions; and the other eastern
States had an excess of nearly twelve
millions. The most of the friends of the
bill desired free banking-that is, the
restriction taken off as to the amount
and locality of the circulation of nation
al banks that the people should be left
free In every part of the United States
to establish national banks wherever
and whenever their local wants and ne
cessities demanded them. The purpose
of this letter is not to enter into any de-
fense of the second section of the bill,
but to remove the appreheusions that
appear to prevail in regard to the first.
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,
ton, resulting from the growth of pOpu-
lstion and business. A majority of con-
gress were OF the opinion that to produce
a restoration Of confidence, a speedy re-
viyal of business and a return to the
prosperity which was so suddenly de-
stroyed by the panic, some ad iition
should be made to the volume Of the
currency. That the bill which has failed
to become law would have produced
some contraction is undoubtedly true,
but it would have been almost entirely
in the stock market in New
York. 1t is a well understood fact
that the reserves Of the western
and southern banks kept in New York
have been loaned by the New York
bankers almost exclusively upon call to
dealers in stocks, and have thus con-
tributed to stimulate an unwholesome
speculation, and have been of very little
benefit to the mercantile or mauufactur-
ing community. The evil resulting from
this fact was strikingly illustrated during
the psnic last fall. The stockholders
who had borrowed the money were not
able to pay 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 mill
lions from the stock market in New
York, which would strengthen the banks
to which they belong, and would
have produced a contraction in
a quarter where it is pretty
well understood that contraction
would do no harm. The act of 1869, to
strengthen the public credit declares
that the United States sOlemnly pledged
its faith 10 make provision at the ear
liest practicable period for the redemp-
ton OF the United States notes in c0iu.
In the debate upon this bill nobody has
denied the character or binding force of
that pledge; but the question as to the
"practicable periodn for its performance
remains as open as it was upon the day
1t was passed. Very few members OF
either house of congress have agreed
upon a method for the resumption OF
| specie payment. While the government
is pledged to redeem the legal-tender
notes at the earliest practicable period,
| the purpose to do so should be ever kept
in view; yet that period is by many not
deemed to be practicable when there is
| great stagnatiOn in business, much labor
| unemployed, revenues largely fallen off,
and much distress aud suffering in every
part Of the country.