Year: 1870

Finance Committee Of the Senate, and for the
labor he bestows on financial questions, II for
nothing else. He gave notice In preliminary
speech few days ago that he should take tho
earliest opportunity to bring forward his bill
to ''provide national currency of coin and
notes, and to equalize the distribution and oir-
culation Of notes." and he has now fulfilled his
promise. On Tuesday the bill was road, when
he and other Senators entered upon tho discus
sion. Judging from the opposition his measure
has met with thus far and the diversity Of opin-
ions in the Senate, as well as In the House,
on the subject of the currency, it is doubtful
IL his bill, or even modified form of it, can
pass There is little knowledge in Congress
on the subject Of currency or national finance,
and less craftsmanship shown on one or the
other than on any other subject. Almost
every Senator or member Of Congress has
some crude theory Of his own, and as the
question is not likely to be made q party one.
there appears to be little probability Of any
thing being done, or at least of any compre-
hensive measure being passed.


Mr.. Sherman Is correct in the first PROPOSE
ton he laid down, that the currency (national
bank currency Is very unequally distributed,
and that the distribution of it should be more
equalized. He said :-sThe present distribution
of national bank circulation was grossly and
palpably unfair. Three States-Massachus
Rhode Island and Notwithstanding .
population of less than two millions, have over
ninety-six million dollars circulation. One
fifteenth of our population have thus one-third
of all the bank circulation" He then goes on
to show that the rapidly growing Western
States, where credit is most needed, have
scarcely three dollars to each inhabitant,
while the Southern States are practically with
out any bank circulation. All this proves the
power New England has exercised over legis-
lation and the government through the period
of the war and since and to the special advan-
tage of that section of the country. Mr.. Sher-
man is right, then, In denouncing the par
tiality to New England in the matter of cur
rency circulation and banking privileges as
s'grossly and palpably UNFAIR" and in de-
mandng justice in this respect for the West
and South. He is right, too, in the ground
he takes in favor of free banking. To
make banking free would abolish the present
monopoly of national bank corporations, of
States or sections, and would have the effect
of equalizing circulation and banking privi-
leges throughout every part Of tho republic.


So far Mr.. Sherman is practical But when
he assumes that this free banking system, or
any banking system at present, can be estab-
lshed on coin basis he is evidently at sea, act
ing upon mere theory, which is impracticable.
A law might be passed for the purpose of COM
pelling the banks to redeem their notes, or the
gold notes which he proposes they shall issue,
in specie; but there is higher law--the law of
commercial necessity growing out of an INSULT
cheney of coin and our present financial condi-
tion--which would make any law Of Congress
imperative. It is easy enough to say resume
specie payments, but it is quite another thing to
resume The English tried this forced resump-
ton theory after the close Of the wars with the
first Napoleon, and broke down under It, When
they did finally reach specie payments, years
afterwards and after several disastrous efforts,
the country was plunged into succession of
general bankruptcies. Are we in a better
condition? There is demand of eighty to
ninety millions Of specie year to pay the
interest on our indebtedness abroad. That,
we believe, is larger amount than our mines
of both gold and silver yield. How, then, are
we to maintain specie payments with contin-
ued drain Of the precious metals from the
country2 We might bridge over the difficulty
for time by sending our securities to Europe,
as we have been doing; but this only increases,
the difficulty in the end and makes the drain
Of specie greater. Then there is the
balance Of trade, including the large
profits on foreign shipping, against us, that
calls for adjustment, either by an extraordi-
nary expectation of produce beyond the natu-
raj demand or by specie. It is said, we know,
that return to specie payments would curtail
importations, and thus tend to lessen the bal
ance Of trade against us; but it is doubtful if
our people or merchants would buy much less
Of European goods, and if they should what
would become of our present large revenue?
Forced resumption under our present circum-
stances would place us at the mercy of foreign
bankers and capitalists, and they could throw
us into suspension at any tipe. The Bank Of
England could do this whenever it might
choose.


The true course is to establish free banking
on the basis of national circulation Of legal
slender notes, to withdraw the national bank
circulation and privileges, without increasing
the volume Of currency, and to let the country,
by the natural increase Of wealth, business
and development, grow up to specie payments.
In this way the government will save twenty
millions or more year to the Treasury, will
have uniform currency, equally distributed,
and will have a circulation that foreign coun-
tries cannot disturb or drain from us. The
growth Of the country will settle all the other
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