Year: 1869

Senator Sherman, from the Finance Ooiii'''
FOO of the Senate. has reported bill OF con-
siderable importance as indicating what pro-
oress our Senators have vet been able to make
toward the solution of our financial questions.
The bill authorizes contracts 10 De ehteieu
into payable in coin, but carefully excepts tno
renewal or extension of any contract now eA
listing. This exception assumes that existing
contracts, payable in currency, are not 10 oe
changed into contracts payable i'll coin, OF tiiat
if they are, the Senate Finance Committee aie
not prepared to propose on what basis this
shall be DONE There are but two bases
ON which it can be done-the one to change
contracts now payable in currency into con-
tracts payable in gold at their full face, IN
creasing their actual values by the difference
between currency and gold, and the other to
change the nominal sum to correspond with
the difference in values leaving the values the
same As there are but two horns to the d.
lemma, and as the Finance Committee, by de-
nying the right to convert existing contracts
INTO gold contracts, have in reality taken their
position, the sooner they state 1T frankly the
sooner this important question Will DO settled
We propose that everybody shall pay in full.
Now what does the Senate Finance Committee
propose The appropriation of Sl4o,OOO,OOO out
of the duties for principal and interest OF the debt
establishes a sinking fund of scarcely ten mil
lions per annum. We can hardly call that
satisfactory sum for purposes of improving the
national credit and enabling us to reduce rates
of interest. Provision is made for funding our
present greenbacks into five per cent 1910
bonds at par, and, as five per cent 10-4O bonds
L. nnf
this would seem calculated to fund
the greenbacks with considerable celerity.
The bill also provides for the is-
sue of Treasury notes without interest
and payable on demand in par. to an amount
which, with the gold certificates outstanding,
shall not exceed the amount of coin in the
Treasury, so that they shall be at all times
actually rcdeemable at par in coin. They are
to be issued in payment of our coin indebted
ness and in purchase of our six per cent bonds,
and received in payment of CUSTOMS taxes, and
all debts due to the United States. This will
give us at least slO0,0O0,OOO of paper currency
at par with gold. But in order to create
demand for such currency, there
must be some means of changing our
money of account and existing business
FOutldClS lHio CoHiihCbS phshb'o III NO'''' VI
some inducement to the business community to
change the standard from currency to coin.
The Finance Committee further propose that
the National Banks be authorized to issue bank
notes redecmnblo on dcruunu In coin, 10 the
amount of 90 per cent of the face of the bonds
deposited by them as security. AS the bonds
are steadily worth from 20 TO 30 per
cent of their face in gold, this allows
banks to issue any amount of notes
rcdeemable in coin, by depositing with
the Controller Of the Currency bonds, the
value of which in gold exceeds by ten per cent
the amount of notes issued. This would prob
ably secure free banking system, and war
rant any amount Of paper currency that can be
kept redeemable in specie. But the difficult
problem would still remain. viz: to provide for
the change of business transactions from con-
tracts payable in deprecated currency into
contracts payable in gold. in such manner as
to satisfy debtor and creditor, Congress ana the