|
|
 |
| Continuation from Page 2 |
|
I know that it has been objected that the system would
be liable to be abused by the Legislature, by whom alone
it could be abused, in the party conflicts of the day;
that such abuse would manifest itself in a change of the
law which would authorize an excessive issue of paper
for the purpose of inflating prices and winning popular
favor. To that it may be answered that the ascription of
such a motive to Congress is altogether gratuitous and
inadmissible. The theory of our institutions would lead
us to a different conclusion. But a perfect security
against a proceeding so reckless would be found to exist
in the very nature of things.
The political party which should be so blind to the true
interests of the country as to resort to such an
expedient would inevitably meet with final overthrow in
the fact that the moment the paper ceased to be
convertible into specie or otherwise promptly redeemed
it would become worthless, and would in the end dishonor
the Government, involve the people in ruin and such
political party in hopeless disgrace. At the same time,
such a view involves the utter impossibility of
furnishing any currency other than that of the precious
metals; for if the Government itself can not forego the
temptation of excessive paper issues what reliance can
be placed in corporations upon whom the temptations of
individual aggrandizement would most strongly operate?
The people would have to blame none but themselves for
any injury that might arise from a course so reckless,
since their agents would be the wrongdoers and they the
passive spectators.
There can be but three kinds of public currency first,
gold and silver; second, the paper of State
institutions; or, third, a representative of the
precious metals provided by the General Government or
under its authority. The sub-treasury system rejected
the last in any form, and as it was believed that no
reliance could be placed on the issues of local
institutions for the purposes of general circulation it
necessarily and unavoidably adopted specie as the
exclusive currency for its own use; and this must ever
be the case unless one of the other kinds be used.
The choice in the present state of public sentiment lies
between an exclusive specie currency on the one hand and
Government issues of some kind on the other. That these
issues can not be made by a chartered institution is
supposed to be conclusively settled. They must be made,
then, directly by Government agents. For several years
past they have been thus made in the form of Treasury
notes, and have answered a valuable purpose. Their
usefulness has been limited by their being transient and
temporary; their ceasing to bear interest at given
periods necessarily causes their speedy return and thus
restricts their range of circulation, and being used
only in the disbursements of Government they can not
reach those points where they are most required. By
rendering their use permanent, to the moderate extent
already mentioned, by offering no inducement for their
return and by exchanging them for coin and other values,
they will constitute to a certain extent the general
currency so much needed to maintain the internal trade
of the country. And this the exchequer plan so far as it
may operate in furnishing a currency.
Volume: IV Pages: 204-209 (extract) "I can not
forego the occasion to urge its importance to the credit
of the Government in a financial point of view. The
great necessity of resorting to every proper and
becoming expedient in order to place the Treasury on a
footing of the highest respectability is entirely
obvious. The credit of the Government may be regarded as
the very soul of the Government itself, a principle of
vitality without which all its movements are languid and
all its operations embarrassed. In this spirit the
Executive felt itself bound by the most imperative sense
of duty to submit to Congress at its last session the
propriety of making a specific pledge of the land fund
as the basis for the negotiation of the loans authorized
to be contracted.
I then thought that such an application of the public
domain would without doubt have placed at the command of
the Government ample funds to relieve the Treasury from
the temporary embarrassments under which it labored.
American credit has suffered a considerable shock in
Europe from the large indebtedness of the States and the
temporary inability of some of them to meet the interest
on their debts. The utter and disastrous prostration of
the United States Bank of Pennsylvania had contributed
largely to increase the sentiment of distrust by reason
of the loss and ruin sustained by the holders of its
stock, a large portion of whom were foreigners and many
of whom were alike ignorant of our political
organization and of our actual responsibilities.
It was the anxious desire of the Executive that in the
effort to negotiate the loan abroad the American
negotiator might be able to point the money lender to
the fund mortgaged for the redemption of the principal
and interest of any loan he might contract, and thereby
vindicate the Government from all suspicion of bad faith
or inability to meet its engagements. Congress differed
from the Executive in this view of the subject. It
became, nevertheless, the duty of the Executive to
resort to every expedient in its power to do so.
After a failure in the American market a citizen of high
character and talent was sent to Europe, with no better
success; and thus the mortifying spectacle has been
presented of the inability of this Government to obtain
a loan so small as not in the whole to amount to more
than one-fourth of its ordinary annual income, at a time
when the Governments of Europe, although involved in
debt and with their subjects heavily burdened with
taxation, readily obtained loans of any amount at a
greatly reduced rate of interest. It would be
unprofitable to look further into this anomalous state
of things, but I can not conclude without adding that
for a Government which has paid off its debts of two
wars with the largest maritime power of Europe, and now
owing a debt which is almost next to nothing when
compared with its boundless resource, a Government the
strongest in the world, because emanating from the
popular will and firmly rooted in the affections of a
great and free people, and whose fidelity to its
engagements has never been questioned for such a
Government to have tendered to the capitalists of other
countries an opportunity for a small investment in its
stock, and yet to have failed, implies either the most
unfounded distrust in its good faith or a purpose to
obtain which the course pursued is the most fatal which
could have been adopted. It has now become obvious to
all men that the Government must look to its own means
for supplying its wants, and it is consoling to know
that these means are altogether adequate for the object.
The exchequer, if adopted, will greatly aid in bringing
about this result. Upon what I regard as a well-founded
supposition that its bills would be readily sought for
by the public creditors and that the issue would in a
short time reach the maximum of $15,000,000, it is
obvious that $10,000,000 would thereby be added to the
available means of the Treasury without cost or charge.
Nor can I fail to urge the great and beneficial effects
which would be produced in aid of all the active
pursuits of life. Its effects upon the solvent State
banks, while it would force into liquidation those of an
opposite character through its weekly settlements, would
be highly beneficial; and with the advantages of a sound
currency the restoration of confidence and credit would
follow with a numerous train of blessings. My
convictions are most strong that these benefits would
flow from the adoption of this measure; but if the
result should be adverse there is this security in
connection with it---that the law creating it may be
repealed at the pleasure of the Legislature without the
slightest implication of its good faith.
JOHN TYLER
[END OF ARTICLE]
|
|
|
|
