Year: 1873

WASHINGTON Nov. 4, 1878.


Treasurer Spinner says, IN his present or thir-
teenth annual report, that in comparing the tables
OF receipts and OF expenditures, which appear at
the beginning OF his appendix, with the like tables
in his report OF the preceding year 1t viii be seen
that there has been large falling OF in the re-
ceipts, amounting to $3.50, 764 on customs and
$l6,ol2, s63 on internal revenue This decrease in
revenue is mainly due to the great reduction OF
taxation in both OF these, the main sources OF the
national income, that was made by the last Con.
gress, which was demanded by the people and has
received their sanction and approval. But,
unfortunately. it will also appear from fur
ther inspection that the expenditures are
largely in excess OF those for the preceding year.
This increase OF the expenditures is mainly due TO
large appropriations made by the last Congress in
excess OF the estimates made by the several ex-
ecutive departments OF the government. The
falling OF of the receipts and the increase OF
expenditures have put check upon the rate per
annum at which the public debt was paid on IN
preceding years. These facts combined make an
interesting subject for reflection the study OF
which will make a good guide, II not


WARNING TO CONGRESS


and the administrative officers as well, OF the
course that should be pursued in the future. Either
taxation must be increased-an expedient that can
hardly be thought OF, or the appropriations must
be kept largely below the receipts; otherwise the
rapid reduction OF the public debt will be arrested,
il not abandoned. Treasurer Spinner says lew, II
any, believe the volume OF the circulating medium,
as fixed by law, stands at an amount that Is ex-
actly right. 1t must be obvious TO all who
have an interest IN, and who have watched
the course Of business and the financial
returns OF the country, that there are times when
xhA-a
should be an increase OF currency, and that there
are other times when the safety OF all legitimate
business requires that it should be largely re-
duced. What is really needed is currency so
flexible as to at all times accommodate itself and
the business wants OF the whole country. After
arguing the question the Treasurer says that for
the existing notorious evils remedy should be
found and interposed.


In looking over the whole ground no scheme has
presented itself that would be so likely TO accom-
pllsh the end in view as the authorization by Con-
gress OF


THE ISSUE OF A CERTAIN AMOUNT OF LEGAL TENDER


NOTES


that could at all times be converted into cur
rency interest bearing stock OF the United states
and for which the holder OF such stock so au-
thorlzed could at pleasure at any time receive
legal tender notes with the accrued interest from
the day OF issue such stock to the day OF Its re-
demptlon. 1t is believed that rate of interest no
higher than 65-l00 per cent VIII be high enough
to absorb the desired amount OF the circulation
when not needed for commercial purposes and
low enough to 1orce the return OF the bonds in ex-
change for legal tender notes at the times when
the business wants OF the country shall require
more currency. This rate OF interest," being just


ONE CENT DAY


for the use OF 500, would be popular with the
masses OF the people because Of the ease with
which interest could be-computed on any amount
for the known number OF days that bond may
have run. 1t is very probable that the legally au-
thorized amount OF 400,000,000 or legal tender
notes need not be increased in order to carry out
this scheme, anu II Is more than likely that under
the then changed condition OF the currency, with
no tendency 10 go into wild projects and stock
speculatons the minimum amount or $3.50, 600 600
would, on account OF It's being readily OBJ
tained IN exchange for the proposed stocks, be
SUFFICIENT for the easy transaction OF the legitimate
business OF the country at times when commercial
interests shall need the largest amount II is be-
leved, with this new attribute OF the legal tender
more paper currency will become satisfied that no
more Is needed, and that those who believe that II
Is mischievously redundant and hindrance or the
resumption OF specie payments, will have an op-
portunity TO Judge OF the correctness OF their pre-
conceived opinions. In addition TO the urgent
economical reasons there are strong moral
ones why the legal tender notes should
again be made to be convertible into United States
stocks. Banks were created Tor the purpose OF
l0aning money for the more easy transaction Of
business, ana not for the purpose OF borrowing 1t
for the purposes OF speculation and thus blocking
the channels oil legitimate trade and commerce.
SO long they confine themselves to this, their
legitimate business, they benefit themselves and
the community as well; but the moment they re-
stead OF lenders oil money, they not only put their
own interests in peril, bur become instruments OF
great danger to everybody within their influence.
This practice on the part Of national banks OF


PAYING INTEREST on DEPOSITS.


and especially that OF one bank allowing interest
on the deposits OF another, whether they be per-
mitted to hold the proposed bonds as part OF
their reserves or not, should be forbidden by law,
charter Objection will, no doubt, be made to the
new attribute proposed TO be gwen TO the legal
tender notes on the ground that interest VIII have
to be paid that part OF them which will be rep
resented by the proposed stock. The minimum
amount OF legal tenoer notes $3.50, 10000 Is now
out interest. Should the plan proposed be
adopted IL is believed that at times the part OF
these notes represented By stock would amount
would not be more than half that amount. This
would bring the average amount at interest To
about $112 000 600. Ii the maximum OF $400 600 Geo.
authorized by law, should be issued IL would re-
duce the amount on the difference OF interest 10
be paid by s44,o0O,oOO, being an average OF
SOS, 100000 ON which interest would have TO be
paid. This at 65-l00 per cent, would amount TO
81, 4S2, 600 per annum. The whole circulation
issued by the government, including the fractional
which the interest at per cent would be
s22, 100000. Deducting the amount Of currency
interest that would probably be paid on the con-
templated new bonds as Aforesaid. II would still
have over $40 500 900 the saving OF gold interest
by reason OF this large


LOAN BY THE PEOPLE TO THE GOVERNMENT
on which the latter pays no interest. The ap-
parent loss OF less than 81 500, 900 in currency TO
the people who would hold the stock would be a
mere trlfe compared with the great gain that
would accrue to the whole country In consequence
OF the better circulating medium that would be in
troduced, and which, it Is believed. would protect
them from corners OF all kinds and from 1nan-
cial commissions ike the one that has just now
swept over the country like tornado
THIS could not have happened had there
been an elastic and flexible instead Of present
rigid and unyieding currency. There is scarce a
doubt but this financial revolution has cost the
people In the aggregate hundreds OF millions OF
dollars 10 say nothing OF the loss OF revenue to
the government There are no doubt, those who
suppose IL 10 be their interest TO have money mat
ters remain as they now are, who prefer state OF
suspension and unsettled values to


THE RESUMPTION OF SPECIE PAYMENTS
and fixed standard for the measure OF exchange