Year: 1865




The facts presented in the report of the
| Comptroller of the Currency will surprise


the country and damage a great many the


ores and propositions for the reduction of
the amount of paper money afoat. The
i theories have all assumed that the amount


Of paper in circulation was a thousand mil
lions, and their calculations are based on


that sum- But it is not shown that while


the whole available currency of the country,


State and national bank notes, and Treas


ury notes of all grades, is nine hundred


and sixty millions, the amount actually in


circulation on the first of last October was


less than four hundred and sixty-one mil


lions. This fact will be serious blow to
| the financial theories of those learned fell
lows who have so persstently urged an i'm


mediate reduction of the currency as the
| grand cure for the evil of high prices 1t


is also shown that the amount Of national
| bank notes in circulation is smaller than


any estimates have made it 1t has been
thought that there were afoat ten millions


in excess of the three hundred millions au-


thorized by law. But instead of this there


are hardly bonds enough deposited to en-
| title those institutions to issue two hundred


and forty-five millions, thus leaving a large
balance in their favor.


The Comptroller enters extensively into


the discussion of the several questions


which bear upon the condition of the cur
| rency. Like the Secretary of the Treasury


he has great deal to say about contract
ion. He recommends that the National


Banking law be so amended that the banks
shall be required to redeem their notes at
par at the three great business centres
NcwYork, Boston and Philadelphia This
question has already been very extensively
advocated in some financial circles, and op-
posed in others, and now goes before Con-
| gress with the official endorsement of the
| governuent banking officer He also urg-
es the reduction of the government issues
OF paper, and proposes to commence it by
! the conversion Of all the Understanding
! legal tender notes into iivc-twenty sig per
cent bonds. This, he argues, can be done
without affecting the money market mas
much as there is not more than five per
cent OF that Issue now In active circulation.
The great bulk being held as an investment,
1t would be simply exchanging one class Of
securities for another While he favors
this reduction in the government issues, he
also recommends an increase of the amount
of the national bank notes to four hundred
millions. In cffecting this he would require
a reduction Of the regular legal tender
notes to an amount more than equivalent
to the increase in bank currency. The pol
icy OF the financial officers of the govern
ment evidently is to leave the question of
supplying paper currency to the banks ex-
clusively at as early a period as possible.
In dot Of Xl,, 4


no doubt the initiatory step in this policy.
If it receives the endorsement of Congress
it will be gradually put into operation; but
all must admit that the legal tenders can
not be withdrawn until we again approach
specie payments, which we must, by the
very nature Of things, necessarily he at
some distant day in the future


There is one other proposition in this re-
port that will no doubt attract considerable
attention and be the subject of discussion.
| That is plan for the payment of the na-
tional debt. Mr.. Clarke gives it as his be-
lief that there can be raised from few
sources of revenue sufficient TO meet the
interest on the public debt,pay the ordinary
expenses of the government, and contribute
an amount annually towards sinking fund
which will pay our entire national debt in
thirty-twO years, ,and at the same time abol-
ish the income tax. This will no doubt as
tonish those GROWERS who have been claim
ing that we can never pay our debt and
that reputation is inevitable. But he pro-
poses to do this by adjusting our tariff, tax
ing cotton, whiskey, malt liquors, domestic
wines, tobacco, stamps and licenses, and
abolishng all others. AS this mode would
be less felt by the taxpayer than the pres
ent system we presume that it will be pop
ular among large class of the Northern
people. But it will at the same time abol-
ish large army of officials, in the shape of
| assessors and collectors, and there NAV be
some question as to which class, the tax
payers or the taxgatherers, will have the
greatest influence in Congress.


The question which has already been
raised in many of the Northern Legislatures
in regard to taxing United States securities,
and that has entered to a greater or less
extent into the political canvass of some
of the States, is dweIt upon quite extern
sively, and a mode pointed out by which
the whole difficulty can be adjusted in a
few years without danger to the public
faith. Taken altogether this is an encour-
aging exhibit, and has many features to
commend it to the people and to Congress.
1t shows that the Department has been ad-
minstered with a view to protect the pub
lie interests rather than for the special ben
eft of bank spectators.