The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1878-10-24
THE DEBT AND THE CURRENCY.
LETTER FROM X-sECRETARY-OF-T
TREASURY MCCULLOCH.

prehenson in regard to the character and
purposes of the 2 $40 notes issued by the
Government in 1864 and 1865. 1t has been
stated by inflated journals, and iterated and
reiterated by inf alton speakers, that these
notes were issued as money. This state
lnent has been in measure confirmed by
remarks attributed to General Spinner, but
the statement is only partially true, and as
to a comparatively small part OF the first IS
sue.
The exiyencies of the Treasury in 1864
and the early part of 1865 were so great hat
the Secretary was compelled to avail him
self of all means under his control to h-eet
the enormous requirements OF the War and
Navy Departments, and, authorized as he
was to sell these notes, or to use them IN
payment of debts due by the Government.
he did direct that some OF them should be
sent to the army paymasters and to the As
sistant Treasury in San Francisco, with in
structions, however, that they should be paid
only to such soldiers and other creditors as
might be willing to receive them. They
were not used nor intended to be used as
money! but as securities, which the creditors
mjoht receive or decline to receive at their
own good pleasure. According to my pres
ent recollection, all OF the notes which were
used for the payment OF soldiers were so
used while Mr.. Chase was at the head of the
" flor was in daily communication with
him) when [ say that it was not his inten-
lion or expectation that they should be even
temporarily a circulating me.ilum. lie was
hard press ed for money and he was also alX-
ions that tile soldiers should save as much as
possible of their hard earned wages; and he
thought as these notes bore a high late OF
interest, and We're convertible at maturity
in.o 20 SIX per cent. gold bonds, that they
and halI rS a n n
vestment. The experiment was not sue
cess. and it was soon discontinued OF the
$3.50. OOO, 900 $40 notes outstanding in Oc-
,ober. 1865. at least $4,000 ,003 had been
offered and sold by popular subscription, as
were the first issues OF . ~ bonds. Inc
bonds and other securities issued during the
war were issued to provide means to prose-
cute the war, when, as the result was by
MANY regarded doubtful subscriptions to the
loans we're considered patriotic those Issued
after the close of the war were issued to pro-
vide means for paying off the soldiers and
closing up the expenses of the war. And 1t
is verify of remark that it was not until
long after the war had been brought to Sic
cessfui conclusion, and the so vency OF the
Government had become assured, that the
holders of securities which had been freely
offered to every man in the United States
became the objects Of denunciatiOns and it
ton of the bondholders almost invariably
comes from those whose prudence, to use no
stronger term, prevented them not only from
subscribing TO the loans when the Union was
ia peril, but also to the subsequent ones, up
on the success of which depended ,the abill
ty Of the Government to pay the gallant men
by. whose valor it had been preserved. The
reason for raising morey by sale OF B.
l0ths, 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
LAS long as the Government was in danger,
by the continuance of hostililes, the patriot
ism OF the people could be successfully APP
pealed to for the purpose of raising money
and sustaining the public creGit. without
which the war could not be vigorously pros
ecuted When hostilities ceased, and the
safety and unity of the Government were as
sured, self-interesr became again the con-
trolling power. 1t will be remembered that
it was then generally supposed that the
country was already fully supplied with Sc
curities. and that there was also Throughout
The Union prevailing apprehension that
financial disaster would speedily follow the
termination of the war. The greatness of
the emergency gave the Secretary no time
TO try experiments for borrowing on a new
security of long time and lower interest,
and removed from his mind all doubts and
hesitation in regard to the course to be pur-
sued. IL was estimated that at least $780,