New-York tribune., 1918-03-04


If it be n war measure. It is measure
which will ne of greater advantaEe 70 w l"e
enemy would as soon proVile Nh'nese s'.
vooien Guns for the army as paper none.
alone for the army. 1t will be preach ot
nublic faith. 1t will injure creditors IL
will increase prices it will increase many
fold the cost OF the war.
Roscoe Conkling, then a member OIL
the House, said, in part:
What is the necessity which prevents ad.
horence to the old and approved methoas OF
raising money? The arguments musS pc
tworold: First, that tie people "'il pc
hetfer ready at some other time than TIE
present to pay what, in the end, they mus
nav, with interest; and, second, that heces-
sarv aud legitimate taxation Will be unpop-
ular. and bring denuncation uHon those
nronos;t;ons. We are able to pay
now. and we never can pay better than
now.
The main contest over the bill was
upon the LEGAL tender clause, and after
that was adopted its passage was GER
tain. After the vote on this questiorl
the Washington correspondents OF "ihe
Albany Evening Journal" sent alS-
ratch to his paper from which the toll
lowing is an extract:
THIS has been an exciting day in the
IIo,se \ fierce battle has been WaEed
against the legal tender Treasury ho,es'
But as I think the right has prevailed,
, and hv n vote Of IS to 52-a much stronger
force tran was counted upon-the reai ar
pument was reduced to very snail COM
pass. ~,
1t was not strange that members OF the
| same political family differed on quea-
| ton OF really doubtful expcdency. And
| but for the necessities OF governinent,
doubt whether the legal tender prlnc1ple
would have received dozen votes IN inc
House Il is new financial pTihcipIe, "nu ,'
! its workings may result in some, ii not all,
! the evils predicted from it. Nevertheless,
I as Treasury notes had 20 be resorted to, the
common sense Of the House. as well az the
common sense of the people. determined
that they should be made as near the prac-
| teal value OF gold as possible. Mr.. Spad-
ing. Of Erie has had to assume the labor
ing in this financial expedient Tie
had but q bare majority of his committee
with him as the outset and. wren the
Secretary of tho Treasury hesitated. as me
/ did for several days, the committee became
equally divided. And yet the measure Ger
ried a large majority of the House with
ita fact as gratifying to Mr.. S. es 1t is
! complimentary to his financial acunen.
The country breathes freer! The legal
tender bill has passed the House, and ma
tional bankruptcy is averted.
In the meantime authority to issue
S10,O00,0OO more OF demand notes had
been granted. raising these to 0,000.-
COO. and in March these were all made
/ legal tender.
Further Issues of the Grecnbacl,s
On the 7th of June following, Secre-
/ tary Chase sent communication tC
Congress, stating that the demands
upon the Treasury made it necessary
! for him to ask for authority to issue
another s15O.00O,000 of legal tender
notes, and ten days later bill to this
effect was reported. and Mr.. Spauldine
opened the discussion. In his speecI
he said
l trust that there will be no necessity fo
any considerable issue OF new notes but II
guard against possible contingencies. | an
retary, believing that he will exercise the
power wisely, patriotically. and for the bes
interests of the country.
Up to the time the legal tenders hat
not fallen very far below par, the
average OF daily gold quotations il
June showing them at 94. Gold and sill
yer had disappeared from circulation
business was active, prices were rising
and these influences helped to absort
! the notes There was encouragemne
to issue more, and the bill passed tho
House by vote of 76 to At, and the
Senate by % to 13.
In the following December, Secretary
Chase asked for still more legal ten
ders, together with large authority fo,
negotiating loans, and also submitted
in more developed form his plan fo,
q national banking system, which wa
enacted at the session then beginning
Up to this time there had been YER,
little war taxation. Professor Dewey
says that "in the development of
tax system appropriate to the event
and conditions of the war, Chase tool
no leadership. He believed that tn
war demanded no extraordinary taxa
tion beyond what was necessary to pa
the interest Oh the new loans created
and to cNtnguish annually small
amount OF the new debt"
Moreover, he did not ush bopnd sales
thorizcd him to sell s5OOOOO,0OO o
$50 per cent bonds "at the marke
value. thereof" but the Secretary he'll
thst "market value" meant whatevc
they would bring above par. and tina
he was not authorized to sell beloy
par. The total sales to December wer
only about s25,oOO,00O
Other Borrowing
congress NaN HOthOflZeQ tNO 1OrEl
of short-time interest-beari indcbt
odness which helped The situation
One of these au+horiyed the Secretar,
to receive deposits OF money in sum
not less than 500 at any Office of tn
Treasury at 5 per cent interest, de
positors to have the privilege of with
drawing it at any time after thirt'
days by giving ten days notice Thi
provision proved popular. and the in
terest rate was raised to 6 per cent
These deposits reached at one tim
Sl20 100000 The other form was
certificate Of Indebtedness. in efec
promissorv note. which the Socrc
tary was authorized to issue to cred
itors who were willing 20 receive then
in settlement of audited accounts. run
ming one year at 6 per cent. Thcs
certificates were issued in The form o
banknote and passed current a
money to some extent. The highes
amount of these notes outstanding q
any time was seas, 900, 900.
BY means of these expedien.s ant
the legal tenders the Treasury mad
It's way through the year 1862. bu
7 no adequate nlan for raising from tn,
people the money for carrying on th,
war had been adopted. The impor
tnnce of cconomizing in individual ex
penditures or restricting their owl
purchases and OF turning pnrchasin,
power over to the government had no
been emphasized
By the close of the venr Tho TraoS