Year: 1867

We print in another column two hills re-
Gently introduced in Congress by the Renre-
| sentative from this District, which IF tbou
should become laws yill settle the Question
whether the volume of our currency is really
excessive or not. Our Washington cores
pondent furnished an outline of the bills in
his letter written on the day when they were
offered. One of them proposes that the pro-
cess of contracting the currency, nov in prog
ress at the rate of four millions month, shall
be arrested; that on and after the 1st July
next, the Secretary of the Treasury shall be
directed to destroy all the United States
notes now outstanding as fast as they are re-
ceived at the Treasury, but to replace them
by a new issue payable in coin on demand one
year from date. This is proposition for
partial resumption of specie payments on the
lst July, 1868, the date, it will be remembered,
at which Secretary McCulloch says in his last
report "specie payments may be resumed. and
ought to be resumed" In his second bill Mr..
Lynch aims to impart to the currency flexi-
bility better suited to the varying needs of
trade, by authorizing the issue of 5 per cent
coupon bonds to the amount of $3OOOOO,O 600,
payable in coin at the expiration OF twenty
years, or in lawful money on demand, and to
be reissued as often as a demand may arise
In this way a safe and convenient investment
will be offered for money not actually needed
for the business of the country, while a de-
mand rising above s per cent can always be
met by exchanging the bonds at the Treasury
OF the United States for their par value in
lawful money. ...I.. ......


Mr.. Lynch, it is well known, discredits the
impression prevalent in many quarters, that
the volume of currency is unduly expanded
His views were fully and ably set forth in his
speech on the currency question at the last
session of Congress. In that speech he prov
ed that the rise in prices in this country is
due to the enormous consumption of goods
during the war and the consequent scarcity
since its close; to the paucity of labor occa-
sioued by the great destruction of life, limit
ing production and enhancing its cost; to the
heavy taxation consequent upon the war; in





the world occasioned by the enormous in
crease in the quantity of gold and the copse-
quent depreciation of that metal. The rise of
prices 50 caused and the greatly increased
business of the country he maintained would
naturally require volume of currency such
as we now have. Those who differ from Mr..
Lynch,while admitting the influence of all the
causes he has named believe also that the sud
den expansion of the currency from 2l5 mil
lions, the extreme limit before the war, to 700
millions, has operated upon prices in this
country precisely as the increase in the guam
tity of gold has operated upon prices in specie
paying countries; that if the volume ofcurren-
cy were reduced, prices would sensibly de-
cline; and that in that case less amount OF
money would suffice for the transactions OF
the country.


Into this discussion We do not propose to
enter. 1t is question which will settle itself
whenever we can get down to the solid basis
Of specie payments The best feature of Mr..
Lynch's theory is that it offers no obstacle to
an immediate return to specie basis. If the
currency is not excessive, then certainly not a
single note will be presented for redemption
So long as greenbacks are more convenient
than gold dollars, they will be preferred if they
are worth just as much. The transition from
the present scale of prices to another measur.
ed by gold ought to be gradual. For that ne.
cessity Mr.. Lynch's bill provides by making
| the process Of resumption partial and gradual
Meanwhile if it should turn out that por.
ton of the currency is liberated by this pro-
cess, is more than is needed afier resumption,
S300,OO0OOO of it can be invested at any time
in the new fve-twenties, payable at maturity
in coin. W
Here then is proposition for return to
specie payments at the early date named by
Secretary McCulloch, coming from one of lth
economists who have been so often stigma
| tized by the New York Tribune as "inaation
| ists." If this is initiation, we should be glat
| to see more of it. So far we have seen NJ
| practical plan for resumption proposed by thu
contractionists. The Tribune's plan is to ac
cunulate gold in the Treasury until we hav,
third of the whole volume of paper-when
ever that time may come. Mr.. McCulloch
wants to have the Southern States "rehabili-
tated," as an indispensable preliminary. Mr.
Lynch proposes on the other hand to begin
next July to issue notes payable in coin year
from date. It is the first definite proposition
looking to resumption, and we wait with con
siderable curiosity to see what arguments will
| be urged against it, t tE a.t