New-York tribune., 1918-03-04

- jl.4NN. Nf-t cs~ttois 1SNo, tho
Secretary in letter to the Financs
Committee of the Senate stated thu.
the amount then due. the army and
navy was about SEQ, 100000 and asked
thai provision be made Tor immediats
payment.
Alr snaulding was still faithful. and
opened the debate With a speech upoa
the situation. He Said
We have the monster rebellion by III.
ears like the baclSwoodsman who held tbs
tcrOcious wolff we let 80. he will de-
stroy Us. ", must therefore held on tin
VIC aubduc hia. vi"
"T have IN aversion TO any considerable
furt,c, issue C. LEGAL notes aud can only
consent 20 it g IN iHpe~ativc necessity
think TOO ]ar@c IN issue will tend Ia
initiate prices, bUt ] co rot see how IL can
be avoided. do not see how The soldiers
are 70 be paid. or how the government can
be carried on in any other way"
lie argued that there was still an
actual shortage Of currency 10 handle
the business Of the country, saying:
What causes this scarcity of currcpcyY
In the first place. as before stated gold
and silver no longer circulate as currency
within the United States. Gold is only
required TO settle foreign balances. pay
customs duties and interest on the pubic
/ poscs as Il commodity. but it does not cir
cu'ate as money in ordinary business oper-
I atlors rs y ace IL supplied by hank bills
and legal tender notes. IN The next place
created by such a gigantic war as we are
E; now prosecuting has largely increased tts
demand for Il larger volume of currency
than was ever required before"
Congress met this emergency h
rushing through a joint resolution
authorizing the immediate issue Of
S100000,000 more legal tenders. The
same to be part of any amount ths.
might be provided for by future leris.
lation. This referred to a loan bill thep
pending which carried provision for
$150,00o,000 legal tenders, and became
Il law March 8, 1868. raising the total
amount of ~reenbscl1 authorized tin.
cluding those intended 20 take the place
OF demand notes. 10 $3.50, 0,000. 900.
President Lincoln, upon signing the
above joint resolution. sent a message
10 Congress in which he said
While giving this approval, however. 7
think it my duty to express my sincere
regret that It has boon found necessar,
to aathorizc so large IN additional issue Of
! United States notes. When this circulation
and that of the suspended banks togethe
nave become already so reGuudsI." al
increase prices beyond rea! vaiues. therein
au9mentinf, the cost OF living to the injury
of labor and the cost OF supplies 10 the
injury of the whole country.
This S15O,C0o,ooO was the last Of The
issues Of interest bearing legal
/ tender notes. Other notes carving The
legal tender quality were issued. bug
they all bore interest at ) or 6 per cent.
3 L how 0,oAo,oJ In -,
culation until interest accumulated on
them, when they were usually withheld.
They took the place of money, how
ever. in bank reserves and helped to
initiate the currency.
Permanent Financing
The expenses of The war were still
mounting higher, but from the passage
of the act of March 8. 1868, the methods
OF raising money were more effective.
This act made clear the authority to
sell bonds at the market rate, even be.
low par. Jay Cooke was appointed
general agent Of the Treasury, and or
ganized an aggressive selling campaign
On commission basis, receiving three
clghths Of l per cent. lie appointed
2.5co sub-agerts. advertised extensive.
ly and canvasscd the country, with the
result that the Secretary was able 10
report in December the sale of nearly
$4OO,OOO,000 of bonds. Taxation also
by this time had begun TO produce re-
suits. The country at last was getting
down to business.
Secretary Chase in his report Of De-
cember, 1863, reviewed and justified the
Issue of greenbacks in the following
discussion:
The limit prescribed by law to the issue
OF United States notes has been reached
and the Secretary thinks il clearly mex
pedient to increase the amount. When
circulation exceeds the legitimate require
ments for real payments and exchanges
no addition to its volume will increase Us
value. On the contrary. such addition
tends inevitably TO depreciation. and de,
probation, if addition be continued, VIII
find its only practical limit in the utter
worthlessness Of the augmented mass.
When Congress authorized the cresaoh
OF debt. to a certain etXent. in the foFnl
Of United States notes. and impressed on
these notes the qualities Of a circulation
medium. its action was justied by the da' a-
appearance of coin in consequence OF sie
suspension of specie payments by the nc
cessity of providing a medium in wnieh
taxes could be collected. loans receiveo
. and payments made; and by the obvious
eAped.ency of providing that medium u
lie form OF naUO0al issues iHS le.Au "a
sorting to the paper of banks. under u,
circumstances its action was wise az;
necessary; but it equally wise a'Iu
necessary To limit the extent of the ISSUE
by the necessity which denanded tneln
They were wanted 70 fill the vacuum
caused by the disappearance of coin 'a any
TO supply the additional demands cres'eSa
by the increased number and variety Y.
money payments. CcMgress believed u.a. 10
four hundred millions would suffice io'
fha,, f.,,.ss
sues TO that sum.
1t will be seen that he justified 'as
Issues wholly on the theory that .aes ne,
We're necessary to supply the COUNT
With medium of exchange after -. -.
bank notes had become iTredeemasua';;
and gold and silver had disappeat:sas,
from circulation. He does not clss. nss;.
that they were an economical suos..,
tutc for interest bearing bonds' " y.
even that they were necessary for a1s :
other reason than that they afordea "
currency by means of which tho re-,
ury could collect the proceeds OF "a
lcvies and loans and the business H. T.,
the country could be carried on. - L.
the last paragraph of the quS.sfion .,,, -,
distinctly repudiates all of the a'sS
meNts usually offered in favor Oh s''
ernment isNies of paper money
Did Grcenbacks Save Union.
The total expenditure Of the co.,
ernment during the four fiscal ssa, s;rr
beginning July /. 1861. and eheuh.s rrhs
June 80, 1855, were s3,34s,S69. .ooo. -. .h,
war began before July !, 1861 ano annsd I'd
expenditure on its account coh'.nsss,ss "a
much beyond Jane so, 1865. but ! -. =.
compare the foregoing figures Oh ,;th l