Year: 1874




Senators.


The compromise bill which has been agreed
on by the republican members of the Senate
is rather political manauvre than measure
of finance. Its leading purpose was to unite
and harmonize the republican party and,
of party tactics, it is of subordinate i'm
portance as a means of reaching specie pay
ments. 1t is marked by the trimming dex-
terity which is SO constantly practised by the
trainers of political platforms It is scheme
contrived to bear one Interpretation in the
East and another in the West, and to mis-
lead both sections if they judge of it by the
comments of local expounders instead of ex-
amining the text of the bill. It has Esau's
hands with Jacobs voice, and person
must be as blind as the old patri-
arch their father if he cannot detect
the trick. 1t is a professed measure
for specie payments which has the extra
ordinary peculiarly of being satisfactory
to the infationists. The very utmost the
infahonists could hope for was to maintain
the currency in the condition in which it was
put by the act of last June-in other words,
their policy, under present circumstances,
Was to do nothing. Tue new bill comes as
near to doing nothing as possible under the
forms of legislation. 1t processes to enact in
substance that the currency shall neither be
more abundant nor less abundant than it is at
present. To be sure, it withdraws only eight
millions of greenbacks for every ten millions
of new bank notes put in circulation, and in
that view is measure of imitation; but its
authors CHIN that if the banks are compelled
to keep reserve of twenty per cent the issue
of ten millions Of bank notes will really add
only eight millions to the currency in actual
use, so that the bill will work neither contrac-
ton nor expansion.


Conceding this view for the present. not
wishing to cucumber the argument with minor
considerations, let US trace the operation of
the bill to its final results, supposing it to be
successful, and see whether it be not measure
of imitation. Banking is to be perpetually
free, but this withdrawal of greenbacks is to
cease when their amount is reduced to three
hundred millions. When that limit is reached
all the new bank notes issued will be SO much
clear imitation The bill is q perfect barrier
against contraction in all the earlier stages of
its operation, and opens the door to unbounded
imitation as soon as the prescribed limit is
reached in the reduction of the greenbacks.
II may be said that the necessity of redemp-
ton will operate as check All nonsense
So long as the banks are permitted to redeem
in greenbacks, and the greenbacls are so
abundant as this bill proposes to leave them,
redemption will be no check. The financial
history of the country proves that this paper
currency may be enormously expanded even
when redeemable in coin. This has often
happened at times when there was no imrne-
diate danger of large expectations of gold.
But the greenbacks cannot be exported; and
with three hundred millions of redeeming
medium securely in the country the banks
will have no fear of being unable to procure
as large an amount Of them as they may need.


The only check upon this tendency offered
by the bill is mere scarecrow. The repeal
of the Legal Tender act to take effect at so
distant date as 1879, is measure of mock
resumption. In the intervening four years
there will be four annual sessions of Con-
gress, and at any one Of them the repeating
act may be itself repealed, and will be re-
peaed in obedience to public clamor if the
currency should prove 10 be considerably ex-
panded in 1878. This danger can be averted
only by such measures of immediate and con-
stant operation as will steadily approximate
the currency to the specie standard and bring
it securely to par before the Legal Tender
act goes out Of force. The proposed bill has