Year: 1867

ed last February by the Representative in
Congress from this District, TO prevent undue
expansions and contractions OF the currency
and to provide for the gradual resumption of
specie payments, have been renewed at this
session. Mr.. Lynch's practical knowledge of
the necessities of trade, his large interest in
manufactures and his experience in banking
have given him special and invaluable train
ing for his duties as member OF the Commit
tee on Banking and Currency, while the in
vestigations to which bis attention has Leen
officially called during his term of service up
on that committee have no doubt answered
useful purpose in compelling revision and
Encouragement of the observations and i'm
pressons derived from his practical conver-
ance with business.


The bill for the gradual resumption OF spe-
Gle payments, which we printed yesterday,
provides that from and after the first Of March
next, all United States notes received at the
treasury in the regular course of business
shall be destroyed, and replaced by new notes
of the same denomination payable in coin one
yelr fiom date. We should accordingly have
partial resumption on the first of March.
1859, and at the same time should not be ex-
posed TO the risk Of dangerous run upon the
treasury for gold. That danger would be
very serious, it following the advice of the
Tribune, the government should simply write
over the treasury door, "The United States
have resumed specie payments" There are
now $50 millions of paper money in circula-
tion, nearly 800 millions of national bank
notes redeemable in United States notes, and
a little more than $50 millions OF United
States notes. The whole mass is worth not
far from IS cents on the dollar, and is accord
ingly equivalent to nearly AIS millions in gold.
If 1t were suddenly declared by act of Con-
gress as good as gold, and the treasury should
begin to pay gold for it, evidently our whole
scale of prices would have to be revised, so as
to express the value Of goods in the dollar of
100 cents instead of the dollar of IS cents,
more or less, which we are now trying to get
along with. The shrinkage in prices would
allow an equal amount of business to be tran
sacted with less money than we are now
using. The ATS millions of gold which would
buy our $50 millions of currency to-day, would
of course suffice for the transaction of the
same business which we are now doing with
the $50 millions. If Congress makes the cur
rency equivalent to gold, AIS millions of cur
rency will do the work of our $50 millions of
irredeemable and deprecated paper. There
will be then 175 millions of superfuous paper,
and those millions will unquestionably find
their way to the treasury for redemption
and in the treasury we have only 100 millions!
The danger of such premature resumption
as the Tribune advocates is just here. 1t is
not question Of confidence at all; here are
ITS millions which we can see plainly must
find their way in short time irto the treasu-
ry, and there are only 100 millions with which
to redeem them; the government would be
forced into suspension second time, and
after violent disturbance of the markets
which nothing but the most imperative ne
cessity could excuse, we should find ourselves
just where we set out.


Mr.. Lynch's bill avoids this danger. In
stead Of promising to pay on demand 357
millions of greenDacks he proposes to begin
on the first of next March, to substitute for
these irredeemable promises notes payable
1859, to begin to pay the notes which have
matured. The currency receipts Of the
treasury for the next fiscal year are estimated
by Mr.. McCulloch In his last report, at 236
millions. About one half of these receipts
will probably be in greenbacks, so that in
in the year ending March I, 1870, we shall
have to pay about 11S millions in gold, and
there are already 100 millions in the treasury.
Instead of proposing to pay IT'S millions
now, with only 100 millions to pay with, Mr..
Lynch proposes to pay 11S millions ia the
course of two years and half. Which is
the more rational proposition?


The bill to prevent undue expansions and
contractions of the currency is necessary
supplement of the measure we have Just
been considering. The bill to provide for
a gradual resumption OF specie payments
fixes the volume of currency beyond the pos
sibility of change. The notes which are
destroyed are to be constantly replaced by
new notes, differing from the others only in
the important circumstance that they are
payable at date fixed. No such currency
can meet the varying wants of trade. To
impart to this unyielding mass the fexibility
which 1t needs, Mr.. Lynch proposes to au-
thorize q new per cent. loan of 800 mil
lions, payable in lawful money on demand,
or in coin, in forty years. The bonds are 10
be disposed Of at par for lawful money. The
result will be, Of course, tsat when the de-
mand for money is less than s per cent,
which can only happen when the market is
overstocked, the bonds will absorb the surplus.
When the money market is close and the
rate OF interest rises, the bonds will return
to the treasury and the capital which they
represent will be called into use.


The financial question has assumed an i'm
portance which did not belong to it last win
ter Mr., Lynch's measures will secure more
attention now than was bestowed upon them
in February, when Congress was absorbed in
solving the reconstruction problem.