Year: 1867

Report OF the Comptroller of the Cur


rency.


We give below that portion of Mr.. HUI
burd's report which treats Of the defects and
dangers OF an inconyertible paper curren-
cy. The House of Representatives has al
ready voted to suspend the process of con-
traction, and if the Senate should accept and
confirm that measure. the next step will be to
authorize al expansion of the currency 1t
is high time to consider the danger of these
propositions. The Comptroller recites below
in very brief compass the experience OF other
nations, and Of our own in other times, after
entering upon this downward path:


The doctrine that the entire amount of le-
gal-tender notes in circulation is q loan to the
government without interest is a popular fala-
cy. This loan Is the most expensive one the
government has ever made. In comparison
with the usury paid on it, six per cent. per sn-
mum sinks into insi9nificance. No govern
ment ever has made, or ever will make, a fore
ed loan from the people by the issue of its
own paper, to circulate as money, wit hout ul-
innate loss. The lenders exact triple and
quadrupie interest, which is taxed in the price
OF the commodity yielded i'm exchange.


The reason for this may be found in the fact
that, whenever it is the misfortune of q nation
to be driven by necessity TO this resort In order
to meet its expenditure, the very nature of the
necessity under which it labOrs precudes all
possibility OF making provision for the convert
ibility' or redemption of its notes. They are
put out to be sustained by the 18th of the peo-
pie in the ultimate ability of the government
to meet its Obligations. In proportion to the
amount Of such Indebtedness the prospect of
payment is near or remote The capacity of u
people to sustain such currency is limited !;
and the very moment that capacity is exceed
ed, the paper goes down. 1t is the fatality of
nations that they lack the wisdom or the abll-
ity TO gauge their issues by this standard. The
past experience of our own, and of other ma
tions teaches no doubtful lessons upon this
subject.


The Continental Congress issued bills which
were made receivable for taxes, and the thir.
teen colonies were pledged to their redemp-
ton. As their credit began to fail, Congress
declared that whoever should refuse to receive
this paper as gold and silver should be deem-
ed an enemy to the liberties of the United
States. But interest was stronger than pat
rio ism; and rs the amount increased, it went
rapid, down, until, at last the sum total hav-
ing reached some two hundred and fifty mil
lions, 1t became so utterly worthless about
the year 1880, that it ceased to circulate.


There were those, even in that day, who
lauded the excellences of government paper
money, very much in the style of some of its
panegyrists of the present day, and subsian-
TALLY upon the same ground.


"Let il be understood" said Congress. chat
paper money is the only kind OF money which
cannot take to itself wings and fly away''


But even this did not prevent Congress from
making provision for taking it up by A new is
sue put forth At the rate of one dollar for the
new and forty for the old; and of this latter is
sue James Madison writes, in July. 1881:


Tie new bills which were IN be isxucJ only rs the
old ones wee taken in are In oreat degree still I'M
issued, and the depreciation which they have al
Ieady suffered has determined Congress anu ire ire
seem to have pursued our pa er projects as tar as
prudence will warrant our medium IN future wan
be principally specie AS the paper uisappeafs' ihe
hald money comes forward into circn alton.


The government of Austria, during the wars
with Napoleon, resorted to the issue OF its own