New-York tribune., 1878-10-05
THE DEBT AND THE CURRENCY.


n,CrFR AND PURPOSES OF THE 7S1O NOTES.-THE
a,,rsr,ov OF THEIR ISSUE AS MONEY-FRUIrs
- prDUNDANr CURRENCY-THE PRESENT oP-
poRTUNITY.
"a, Edttor or The Tribune
c.. Tbere exists to some extent misapprehen-
=, rogard 10 the character and purposes of the
"a. notes issued by the Government IN 1854 ana
,sC5 II has been stated by imitation Journals ana
tod and reiterated by initiation speakers that
these notes were issued as money ms statement
90 Loo,, in a measure confirmed by remarks attrp-
Ito General Spinner but the statement Is ohy
partially true, and as 10 'o'np"'"'''O''
nor. Of the first issue.
,r,o exiucncies of the Treasury in 1864 ana the
.ly mart of 1865 we're SO great that the Secretary
was compelled TO avail himself of all means unueI
his control TO meet the enormous requirement. VI
the War and Navy Departments, and, authorized "S
t ,-os to sell these notes or to them IN payment
Of debts due by the Government, he uld uIl'o' ""V
some of them should be sent to the arm! pay
masters and TO the Assisan-IreaSurer IN Sah ran
80 with instructions, however, that they
sbould be paid only to such soldiers ana
otbcr creditors rs might be willing TO receive them
Tbcv were rot used nor intended to be used as
rooney but as securities, which We creditors might
siyc or decline TO receive at their own good pleas
r,,. According to my present recollection, all of
t,. notes which were used for the payment of SOL
dcrs were so used while Mr.. Chase was at the head
of the Treasury Departure ent, and speak adylsedly
lror was in daily communication with him) when
say that it was not his intention or expectation
that they should be even temporarily circulating
1r.dium. He was hard pressed for money, ana ne
WAS also anxious that the soldiers should save as
,,r, gs was possible of their hard-carucd wages
and Lc thought, as these notes bore hleh rate OF
interest. and we're convertible at maturity into
100 6 Der cent gold bonds that they would be
GLADLY received and held as an investment The
cvpcrmeut was not a success, and it was soon dis
continued OF the $S3O,0O0,OOO 1910 notes out
standing in October, 1865, at least S1OO,OOOoOo
had been offered and sold 10y popular subscription
n were the first issues Of 800 bonds The bonds
and other securities issued during the war
were issued to provide means to prosecute
The war; when, the result was by many
recorded doubtful subScriUtiens 70 the loans were
considered patriotic those issued after the close OF
the war were issued to provide means tor paying
cfthe soldiers and closing mp the expenses OF the
war. And il is worthy Of remark that 1t was not
rptI long after the war had been brought TO a sue
cessful conclusion and the solvency OF the Govern
ucut had become assured. that the holders OF secu
rites which had been freely offered to every man
in the United States became the objects OF dcnun-
ciatlon; and il is also worthy of remark that the
denunc alton Of the bondholders almost invariably
comes from those whose prudence, to use no
stronger term, prevented them not only from sub
scrbiug to the loans when the Union was in peril,
but also to the subsequent ones upon the OF
which depended the ability Of the Government to
pay the gallant men bv whose valor il had been pre-
served. The reason for raising money by a sale Of
73oths instead of bonds having longer time to run
and bearing lower rate of interest, was given by
the Secretary in his report of 1868 in the following
language:
As long as the Government was in danger by the
continuance of hOstlitlcs the patriotism OF the
people could be successfully appealed 10 Tor the pur
pose OF raising money ana sustaining IIe P9Dnc
credit, without which the war could not he yig0r-
ou,ly prosecuted. When hosthties ceased, and the
safety and unity OF the Government were assured
selfutercst became again the controlling power lt
will be remembered that It was then generally sup
posed that the country was already fully supplied
with securities, and that there was also Throughout
the Union prevailing Apprehension that financial
disaster would speedily follow the termination Of
the war. The greatness Of thc emergency gave the
Secretary no time To try experiments for borrowing
on, a. new sorlrtry ot long time and lower interest
and removed from his mind all doubts and hcsia-
uou in regard to the course To lie u>ued Ii was
estimated that at least $7O0,0G0,O0 n Iuld be
raised, IN addition 10 tho revenue receipts, FOR the
payments of the acquisitions already drawn, and
those that must soon toAoW-prepatato:y 10
the dIsbandmen' of the great Union army
-tand of other demands upon the Treasury.
The anxious InquuIcS then were by what
means can this large amount OF money be
raised, and not what viii be the cost Of raising It,
How can the soldiers be paid and the army be dis
banded SO that the extraordinary expenses OF the
War Department may be stopped, and not what rate
of interest shall be paid for the money. ILcSe were
thr injuries pressed upon the Secretary. lie
svered Them by calling to bis aid the wel-tlied
agent who had been employed by his Immediate
predecessors, and by offering the seven and three
tenth notes.-the most popular loan ever offered to
the peope-ln every cty ana Eulage' ana 6y ,secuT-
ing the advocacy OF the press througAoHt the length
and breadth OF the land. In less than four months
from the time the work of obtaining subscriptions
actively commenced, the Treasury was IN a con-
dltOu 10 meet every demand upon II.
The 781oths were made payable interest and prn-
cpal in lawful money lcgal-tender notes., but they
were not themselves a legal-tender. as some have
asserted and nobody considered them until ten
years after they had been retired In October 1863
the following short time bgations-tIe payment
OF retirement Of which IS denounced as a contrac-
ton of the cuTency-were outstanding, viz:
Compound interest notes. due 1867 and
per cent i treasury notes due Dee l. 1868 32536OOl
$50 Treasury notes, III 1867 and 1868 S3OOOOOUO
In addition to these there were debts due from the
Government in the form of temporary loans on ten
days notice. and certificates of Indebtedness, to the
amount Of $155, 100000. The compound interest
notes were a legal-tender at their face They were
paid out and for a few months circulated as cur
rency, but the interest which they bore caused
them to be taken by those who had money to in
vest and to be held as securities. Neither the per
cent nor the 1910 notes, have said, a legal
tender nor did they, except before stated, answer
the purposes of money.
It's undoubtedly true that all these temporary
securities when first issued did to some extents swell
the volume of currency, but TINS was when enor-
nous sums were required for the payment of
soldiers and other creditors of the Govern
uent The fact that all Of them were paid,
or funded, at or before maturity, without any
complaints of contraction proves concusively that
I.rya grrl,o. ytss1,