The Washington herald., 1909-02-07

the room.
In It's National Capacity.
by the circumstances which arose aut
OF the financial vicissitudes OF the revo-
luton. permitted by a neglect and lndif-
ference that ripened into custom and pre-
scription. When the civil war compelled
the nation 10 act in its national capacity
States themselves. the utter incongruity
and the serious defects Of the State bank
ing systems at once became apparent. II
was no desire TO centralize power that
suggested or promoted the national bank
ing system but simply necessity The
occasion demanded enormous resources.
Our commerce was curtailed, the revenues
from customs duties. the principal re-
source OF the government. were COM
parstively trifling. neither the war tariff
nor the internal revenue system were yet
in effective operation. foreign loans were
tried but foiled. and the only resource
adequate 10 the emergency was domestic
loans. II was to float these that the
national bank system was I will not say
designed. but framed; and the success Of
the measure Is its best defense. Next TO
Alft- faAAlULlcfl OF our EDiNiefSs MtldL en-
sbled tho war 10 be carried on until the
Union was restored. was first the green
backs and second the national bank sys-
TEN. One was as Indispensable as the
other The result was that there never
was a day when the Treasury was not
prepared TO meet all demands Here the
judge sat down again. with this tri-
umphant conciusion-"And that. I think
IS
could say"
GOvernemHt Regulation of Currency.
While they are obliged 10 admit the
necessities created by the war your
critics contend that the only justification
for your fiscal measures was their sdven-
titiOus s1ccess-in short. that they
amounted 10 a lucky stroke ana cannot
be defended upon either economical or
constitutional grounds. For example
they insist that the government had no
constitutional power TO regulate the vol
ume OF form 10 the requirements OF
trade or course. only mention this IN
order to note your reply.
Judge Chase here crossed his legs. put
Up the fingers OF both hands to meet In
q sort Of arch and replied without besi-
tation
Leaving the volume OF the currency to
be determined by the demands OF trade. -
said he. is failacy and was one OF the
defects Of the State banks system. Cur
rency is a measure Of value and in
order that IL snail measure value with
precision. certainty and equity II should,
Ike other measures. be fixed not Indeed
absolutely. but in reference 10 some OBJ
viOus. certain. and well recognized mark
Of trade-such. for example as the
growth Of population and consumption.
To regulate currency by trade Itself would
be ike regulating the size OF the bushel
BY the amplitude of the wheat crop On
t--e contrary. il Is currency that should
regulate trade and not trade currency,
because the former can. while the lat
ter cannot. be fixed Money can be lin
tied Its tendency is 10 grow spaSmodi-
cally until il reaches the boundaries Of
distance. mechanical facilities and money.
It's further tendency Is TO expand to the
boundaries or credit. II the absence Of
regulated money its still further tendency
IS 10 soar into the b0undless realms OF
speculation, there 20 collapse into ruin
and bankruptcy
Auxiliary TO borrowing Power.
As 10 the constitutional power" con
tinued the judge. the fiscal measures. /
viii not say OF mine. but Of the Lincoln
administration, as whole. were proposed
as an auxiliary 10 the power 20 borrow
money, as an agency OF the power to col
lect and disburse taxes, as an exer-
else OF the power 20 regulate commerce.
and OF the power to regulate the value
OF coin. OF the two first sources Of
power. nothing need be said. The srgu-
ment relating 10 them was long since
exhausted, and is well known. OF the
other two. il is not needful TO say much.
II Congress can prescribe the structure.
equipment. and management of vessels
to navigate rivers flowing between or
through different States as a regulation
OF commerce. Congress may assuredly
determine what currency shall be en-
ployed in the interchange Of their com
mOdities. which Is the essence OF COM
merce. Statesmen who have agreed in
little else have cOncUrred in the opinion
that the power to regulate coin is. in
substance and effect, a power TO regulate
currency. and that the trainers OF the
Constitution so intended. II may well
enough be admitted that while Congress
confines its regulation TO weight. fineness.
shape. and device. banks and individuals
may issue notes for currency in cOmpe-
tition with coin But il is difficult 10 con-
ceive by what progress OF logic the un-
questioned power to regulate coin can
be separated from the power 80 main
tain or restore its circulation. by exclud-
ing from currency all private OF corporate
substitutes which affect its value. when
ever Congress shall see fit to exercise
that power for that purpose
rs Il fair estimate that in 1851 there
were about S20e.000e00 in sold in the loyal
States alone. the whole Of which. with
practically the exception Of q small bal
sRce in the Treasury. was exported dur
ing the following YEAR,
Coin Was Withdrawn.
Il can only say" replied Judge Chase.
that in November. 1881, we estimated
the coin in the banks and in circulation
In the loyal States at $4,000, coo. and that
In November. 1862. the coin had been es-
sentialy demOnejized and actually with
drawn from use as currency or as
basis fer currency The ignorant fears
Of foreign investors in national and
State bonds and other American securi-
ties, and the timid alarms OF numerous
individuals in our own country prompted
large sacrifices upon evidences of public
and corporate indebtedness is our mar
kets. and large purchases Of coin for re-
miItance abroad or boarding at home
Taking advantage OF these and ofhpr cir
tending 10 an advance in
gold. spectators employed all the arts or
the market tc stimulate that tendency
and carry the premium to the highest
point That point. however vas always
q fictitious one. How much of the coin
withdrawn from public view was ex-