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o >»' -fi 1 * ‘I * ft * ; rr *^3 aS <> '‘‘ISmarks on the proposed issue of Trpaamy. Jfotes/ . ~ v * vJ* - BY duff green, esq., v • **''*<* ’ J'ha Confederate States propose to contract a loan of fifty « ^millions of dollars, of which twenty millions of dollars to be in - the shape of Treasury ^ot§s, without interest, hut receivable in payment of publiadues'-An^J^nvertible inlo Boncfs, bearing «ight per cent, idferest. It is^roposed that the States and cities, -towns and coufllie3 of the several States shall make these notes receivable for taxes, and that the Banks and Railroad Compa nies shall receive tliem and pay them out as currency. The question to be considered is, Can such notes be made a curren cy equal to specie 1 The constitution gives to Congress power “ to coin money, and regulate the value thereof, and of foreign coin,” and de clares, that no State “ shall make anything but gold, and silver coin a tender in payment of debtsi’ Therefore, nothing but gold and silver is money. Yet Bank notes, which are paid on demand in specie, a^e accounted and used aslnoney; and euch notes have again and again been so used, even when the Banks issuing them, weie authorized by law to suspend specie payment. The Bank of England was required, by act of Parliament, to suspend in 1797, and did not resume until 1825; and the Banks in the United States have been permitted to suspend payment so often, and for such periods, that the confidence of the public in Bank notes, and the value of a paper currency, must be admitted. Adam Smith says: “ The cold and silver which circulates in any country, and by means of which the pro duce of land and labor is annually circulated and distributed to the proper consumers, Is. in the same manner as the ready money of the dealer, all dead stock. It is a very valuable part of tho capital of the country, which produces nothing to the country. The Judicious operations of banking, by salslUnting paper In the room of a great part of this gold and silver, enables the country to convert a great part ot the dead stock into active and produc tive stock, which produces something to the Country.” Again, he says : . “ A paper money, consrimflfe In bank noses, issued by a people of undoubted credit, payable on demand, without aoy Qundition, and In fact always readily paid as soon as pre sented, is in every respect equal In value to gold and ailver money.” Ricardo 6ays: “If there were perfect security that the power of issuing paper money would not be abnted; that Is. if there were perfect security for its being need in such quantities as to preserve Its value relatively to the mats of circulating commodities nearly uniform, tbe precious metals might be entirely discarded bom circulation.” An able British writer bas said: such as <$hbatra»sed trade, the money market," Ac.; general distribution of labor, contlonal fluctuations.'' The constitution not only gives to Congress the power to coin%ioney and regulate its value, but alBo “to fix a standard of weights and measures.” The purpose of giving these pow ers to Congress was to secure, as far as practicable, a certain, fixed, value of property, by preventing fluctuations in tbe value of money. It was to euable the seller to know how much he is to receive, and the purchaser to know how much he is to give. If was to establish justice and right in the transactions between man and man; and tfie States were forbidden to make any thing else than gold and silver a tender in payment oi debts, because- it was supposed that the limited quantity of these metals.caused them to fluctuate in value less than other com modities^ % . -a .. . But it is apparent that irrforbiddiflg the States to make any thing else than gold and silver* a tender in payment of debts, it was'nejess the purpose of the constitution to strengthen and increase the value of credit, than to give a certain and fixed value to money.' For as there could be no debts without a previous use of credit, the regulation which requires the pay ment to be made in gold and silver coin, the value of-which had been regulated by Congress, tends to give the same Value to credit as to these coins. The Confederate States propose to borrow money. Have they the means of payment, and will they pay as they promise to do? We Relieve that the people of these States have ample means within themselves to, advance to themsdves all the funds wbicli they may require, and that, as the debt will be due from themselves to themselves, there can be no cause to apprehend that they will not pay themselves. If the value of credit de pends on the ability of the debtor to pay and the certainty of payment, when the debt becomes due, and the people ot the Confederate States become themselves.the creditors of them selves, them there copld be no stronger basis of credit than that - (>{ptlie proposed-loan. The use of public credit is of comparatively recent "origin. The extent to which it may be used by an enlightened people, is illustrated by tho progress of the Public Dkbt of England. We are indebted to Ayres’ Financial Register, ot 1857, for a series of Tables derived from official sources. The following table shows the aggregate amount of th^ Public Debt of the United Kingdom, at different periods, with the amount of the public revenue. Public Debt at the Revolution In 1688 Debt contracted daring the reign of William lU.. “ at tbe accession of Queen Anne, In 1708. Debt. $3,851,315 78,653,105 81.973,510 contracted during thin reign 1 188,753,305 “ at the acceeelon of George I., in 1714 370,736,815 “ reduced during thU reign 10,365,640 “ at tbe aeeeeelon of Geotge II., In 1737 360,461,175 “ reduced during 13 yean peace, ending 1730.. 35,688,060 “ at commencement of Spanleb war InJ739 ... 334,773,115 “ Increased daring seven yean* war 156,603,445 “ at the end ef the Spanl.b war,*ln 1748 391,466,5*10 “ redneet^durtng eighteen of peace 18,607,860 “ at commencement of war in 1736 373,859,900 *• increased daring eevsnymrs of war. 360,555,030 “ at the en(Tot the war, hi 1763 783,414,330 “ reduced during thirteen yean of peace 58,698,965 “ at opening of the American war, In 1775 679,715,355 “ Increased daring eight yean of war 513,709,095 at tbe end of the American war. 1,193,434,350 “ reduced during ten yean of peace " at co—ncncement of French war, In 171%. ■ “ contracted daring French war, eliding 1815.. " of the United Kingdom at the oon.ollda- I * tion of Bngllehemd Irish Exchequer la 1817) Thu entire amount of the public debt of the United King dom ismadaupof several distinct items, under the heads of Funded Debt!, in the shape of loans contracted, or by funding securities, ofterminablc and life annuities, and of the unfunded debt, consifUiug 0/ Exchequer bonds and Exchequer bills. The following Table, compiled from Parliamentary Documents, shows the total amount of debt funded-and unfunded, and tbe 33,756,305 1,1691668,045 3,655,444,160 4,894,113,305 Interest. Pnb. Revenue $199,335 $10,009,435 6,355.435 6,564,760 10,303 080 16,756,840 669.035 16.087,805 1,967,060 14,830,175 5.4*y,895 90,305,070 3,831,385 16,983,685 13,390,590 39.304.305 1,830,000 97.384.305 19,915,490 46^509.635 •717.945 45,88Ol80 115,944,740 161,136,430 19,476,000 39,469,000 33,810,000 34$70,000 34,615,000 35,685,000 43,617,390 51,337,000 59,890,000 83,334,070 lit* .70,000,000 total annual charge from 1820 to 1^55; , inclusive. Tre. Total ain't Debt, funded <fcunf'd. Total annual charge. " Yi». Total ain't Debt, funded A nnf'd. Total annul charge. 1690 $1,163.656, Ofilf $ 155.198,865 1838 $3,936,868,700 • $145,348,075 1831 4,134,396,585 159,834,500 1839 3,923,582 670 146,791,005 1833 4,164,056,475 f4SjA,190 * 1840 3.937,240,375 145356,906 1833 4,132,316,830 148,090.035 144,099 895 18(1 3,954.373,040 147,077,855 1834 4,067,608,300 • 1843 3,966,252,300 146,981,860 1835 4,030,613,335 1643 3,953,881,960 145,331.435 1836 4,041.837,950 145.437,170 1844 3,937,990,7*5 141.047,495 1837 4,095.118,710 144,857.700 1846 3,935,365,110 140,316.535 1838 8,989,897,700 144 587,8*5 1846 3,914,694,090 139,593,935 1838 8,963,713,410 144.089,615 1847 „ 3,961,741,755 140.780,090 1830 3,915.483,830 138,790,845 1818 3,959,046,490 143.338,300 1831 3,906,476,170 139.960,960 1849 3,964,635,086 140.843,355 1833 3,696,983,745 189,869,146 I860 3,936,145,810 189.301650 1833 3,897,838,915 140,767,885 1851 3,914,346^10 188,910,810 1834 3,860,964,945 138.683,435 1853 3,896,896,030 138A78,970 1835 3,307,683,830 144,837,450 1863 6,854,115,005 *• 137,803.045 1833 3,941,993,860 144,525,566 1854 $.873,986 090 . 185,466,700 141),039,790 1837 8,931,698,690 146,665,740 1855 4,017,476,975 We know that many persons, speculating on tho immense weight of the public debt of England, have anticipated her nation al bankruptcy; Btit it is an important fact that the people of Eng land are themsfilves the creditors, as well as the debtors, and that they are enabled to bear this immense burden, great as it is, because tbe immense sums paid by themselves as taxes, are received by themselves as dividends. This fact is so-important as illustrating the capacity ofindustrious and intelligent peo ple to absorb a domestic public debt, that we give a table, show ing tbe number of persons entitled to receive dividends on tbe public debt of tbe United Kingdom, which proves that, large as that debt is, it lias-beeti absorbed and is held by tbe masses —by the persons of #mall incomes—by the people, jwlio have placed their surplus earnings in that fund, as a safe and-per manent investment, add who Ifave thus become interested in the stability of the government. There were, in 1856, 185,181 persons entitled to dividend! of. $35 and under. 86,491 do. 179,884 40,590 20,304 7,406 4,981 3,391 780 448 dot do. do. do. do. do. do. do. 50 and exceeding $35 350 “ * •* 50 600 •• '• 250 1,000 *• '• 500 1,500 •• “ 1,000 3,500 “ “ 1,600 5,000 “ “ 9,500 10,000 “ “ 6,000 exceeding 10,000 rv«fcj^208 as the number of all classes entitled to dividends. •L'wadwrtker illustration of tbe capacity of a people to place largd^flfcs in the shape of a funded debt, bearing a low rate of interest, we refer to the Savings Banks of Great Britain and Ire land. The first Savings Bank originated in 1804 with a woman • Mrs. Priscilla Wakefield—who, in charity, agreed to receive" pennies from the laboring poor during the summer, to be repaid at Christmas with 5 per cent, interest. The sums deposited in Savings Banks had so increased that Parliament required the amounts to be placed under the control of commissioners, by whom it was invested in the public debt; and tl ie following statement shows the number of depositors, with the deposits in November, 1855. There were 180,110 persons depositing not more than. ... $5 making .. .. . $ 283,591 ./8,170,700 249,876 do. “ 44 44 •. 5 and not exceeding .... 169,638 do. 44 44 44 .. .. 25 “ “ ;; . 5,895,955 122,787 do. 44 44 44 .. .. 00 “ 44 “ 75...i ,. 7,845,605 75,501 do. 44 44 44 .. .. 75 “ 44 “ 100... 1 . 6,474,333 130,154 do. 64 • 44^ it <§ .. 100 “ 44 “ 150...1 . 15,590,080 103,614 do. do. * •* “ “ " ..• 150 “ .. 200 “ .. “ 200.... “ 250.... L 17,671,815 . 11,416,850 80,239 do. it ti “ 250 “ ^14 “ 350.... . 26.1S7 520 41.2S5 do. 44 It 14 .. 350 “ 44 “ 600... ..17,839,015 27,076 do. 44 it it (| .. 500 “ 44 “ 573.... ..15,013,340 16,508 do. it 14 44 ## .. 575 “ 44 “ 750.... 1,247.355 25,200 do. 46 14 44 .. 750 “ 44 “ 1,000.... .. 1,422,450 1,489 do. depositing more than.... .. 1,000 .. 1,653,410 1,381,638 individuals who deposited $14,243,330 14,148 charitable institutions,.which deposited ?.... -:,386,190 8,758 friendly societies, which deposited .,636,265 1,304,833 total number of depositors, who deposited $11,315,675 These depositors receive but 2.94 per cent, per annum as interest—tlie difference between 8 per cent, and 2.94 per cent, (a fraction more than one half of one tenth of one per cent:) be- . ing deducted for the management of the fund. Surely if tbe working classes of Great Britain can absorb so large a part of a funded debt of more than four thousand millions of dollars, bearing an interest of three per cent., and the depositors in the . Savings Banks can pi ico to tbe use of the government more than one hundred and sev anty millions, at less man Itiree per interest, tbe people of tbe Confederate States can absorb a sum, bearing interest at the rate of eight per cent., much more than sufficient to pay the vliole expenditures of the government fora longer period than any probable duration of the war. In that case, all that will be required in taxes will be a sum sufficient to pay tbe interest on so tnucL as may be funded ; for it should be borno in mind tba t to the extent that these notes are used as currency, they should bear no interest, and to that extent their issue will diminish taxation. • Thus, if $200,000,000 be used as currency, the saving of interest will be 8 per cent, or $16,000,000 per annum, which saving will be to the whole people in tbe proportion which they would otherwise be required to pay taxes. A more significant feature of tbe financial strength of the people of England in, that during the war with France, they advanced as loans and subsidies to Hanover, Hesse Cassel, Sar dinia, Prussia, Hesse Darmstadt, Baden, Germany, Brunswick, Portugal, Prince of Orange, Bavaria, Russia, Sweden, Spain, Sicily, Austria, Morocco, Danmark, Holland, and to France!! the sum of $301,047,813. The imagination may well "be startled at the magnitude of these sums, and accustomed, as we have been, to consider the Bank of England as the Regulator of the monetary system-and credit of the world, we naturally assume that it is to the finan cial strength and great resources of that Bank that the people of England are indebted for the ability to sustain the weight of such a burden ofyaxation. We are the more inclined to do this because it is knowu that tbe Bank is the financial agent of tbe government, and that Parliament, in 1797, passed an act requir ing the Bank tp suspend specie payment as a means of enabling the Bank to aid in sustaining the public credit In this connec tion, the following Table, showing the equivalent of three per cent, stock for the amount of debt funded, the stock created for £100 in money, the market value of the paper Pound in gold, and the value per cent, of the paper currency, with the average circulation of Bank of England notes, is given. Years Amount of debt funded. Equivalei t in three per* ent. stock Stock creat ed for £100 In money. Mark’tv’lue ofpaper £ in gold. £ £ £ s. d. . 1800 31X500.000 33,185,(00 158.50 20 0.0 1S01 36,916.450 63^78.100 174.54 18 8.8 1802 25,000,000 82,990,(30 132.17 18 0.5 1803 12,000 0110 20,483,1.» 173.55 19 5.6 1804 14.500,000 20,390,* 00 185.00 19 5.6 1805 22,500,100 41,800,1100 177.20 19 56 1606 20,000.000 33,200,000 167.70 10 56 1807 15,700.000 24,798,: SO 100.20 19 5.6 1808 14.500,060 33.530,1133 162.67 19 5.6 18U9 22,532,100 86,2 IS,''40 161.89 19 5.6 1810 21,711.000 33,112. 00 152.67 11 6.8 1811 24,000,000 89.7*4 J .20 57,198.080 166.53 18 5.1 1812 31,721,325 180 00 16 8.7 1818 64,755,700 118,736.*190 181.87 15 6.4 1814 34,007,400 36,839,930 154.17 14 11.7 1815 1816 1817 1818 1819 1830 1831 54.133,589 102,787^140 191.52 16 7.8 16 7.8 19 5.6 19 5.6 19 13 19 5.8 30 0.0 £. i. a. ioo o o- 91 13 4 99 14 S 97 8 10 97 6 10 97 6 10 97 6 10 97 6 10 97 6 10 97 6 10 86 10 6 92 3 2 79 5 3 97 6 97 0 95 11 97 8 100 O m 16,427, 16,500,000 - 17,408,000 16,876,000 1*791,000 16,706.000 17,128,000 18.917.0CO 23,541,000 23,282.000 33,437,000 24,023,000 36,901,000 36,887,000 36,574,000 38,374,000 87,331.000 35,327,000 23,569,000 22,471,000 These tables 6how that in 1800, three years after the Bank of England had suspended specie payment; the bank note was at par, although the public credit was 58J per cent, below par; and that although the value of the paper pound was, in 1814, reduced to 14 shillings 11.7 pence, it Was again at par in 1821, although the Bank did not resume specie payment until 1S25. Another striking fact is, that whilst the average depreciation of the Bank of England notes, as compared with gold, was less than two per cent., the depreciation of the public credit, as compared with the bank-notes was 67.60 per cent. -Yet in 1806 the whole capital of the Bank was but $58,212,000, which was then increased to $72,765,000, of which §70,000,000 was invested in the very securities, which were thns depreciated. This fact bas a most important bearing on the proposed issue of Treasury notes. It will bo seen that a large part of tbe public debt of Great Britain was created before 1801, when the census shows that the population was but 10,567,893; and as the productive in dustry of a country is tlie only legitimate source of its wealth, and this of necessity depends upon the numbers and sources of employment of its people, a comparison of the popnlatibn of tho Confederate States and the relative value of the surplus products of their industry, witlntlie population and value of tbe surplus products of the industry of other countries is tbe test, by which their relative resources and credit should be estimated. In'these particulars the Confederate States. compare favorably not only with England, but with any and all other countries, and as the foreign demand for tho surplus of no other people is 60 great or so certain us for theirs, it follows that no other peo-. plecan so safely create or so readily absorb a large public debt. But there are other facts tfhich belong to and bear with equal or greater force on the questions under consideration. Why is it that the average rate of interest for English securitie^and for money in London, rules lower than elsewhere, and that ^bt auy one, m any other part of the world, wishing to place money in London, is required to pay a premium to do it? Is it ftqt because the Bank of England so regulates the exchanges (is tt) make London the. financial centre of the world, and comete" the commerce of the world to adjust its balances ih Loadon ? The process is jthus: Tho Bank has $70,000,000 of its $72,765,- QP0 invested in three per cent, govermqpift debt, and is aithor- ized to issue its notes for the whole sum thus invested, and for a sum in addition equal to tho bullion in its vaults. Thus, when, as in September, 1852, it had more than $100,000,000 in specie, its issue was over $170,000,000 of Bank notes, and interest was two pet - cent. ouly. But when, as in December, 1857, it bad but $35,000,000 in specie, the issue of Bank notes was but $105,000 000, and interest was 10 per cent. Why ten per cen tum ? ^Because the purpose was to throw upon the commerce of the country the onus of recruiting the bullion for its vaults, and therefore, instead of receiving the produots of the industry of other countries in exchange for the products of their industry; that is, instead of an exchange of staple products, British mer chants and manufacturers were compelled under tbe pressure of tho Bank screw, to demand specie; because, as the Bank is compelled to curtail its circulation as the specie in its vaults is diminished, the Bank is not only compelled to curtail its dis> counts, but is compelled to demand specie, or its own notes, which are equivalent to specie, in payment. Thus there being an extraordinary demand for bullion to defray the expense of the war in the Crimea and in India, (there was remitted to India in two years by one single line of steamers $154,591,855) and as a large part of this was in silver, and the circulation of France was chiefly silver, the export of the silver from France was from January, 1852, to January, 1858, §225,400,000 more than the Imports, and the Bank of France was compelled to purchase, betweeu the 1st July, 1855, and the 1st January, 1858, the enormous sum of $272,600,000-in gold, ♦ at a~prenrnrnror-$2,eoo,000, "to supply the place of the silver thus transferred to India; and the custom-house returns show that the export of gold from the United States, for seven years preceding the 1st July, 1857, was upwards of $320,000,000. Is it not apparent that England got from France the silver sent to India, and that she obtained from the United States and Aus tralia the gold to pay for it ? • Adam Smith, Jacobs and Ricardo all agree that the gold and silver in a prosperous state constitutes in value a very small . proportion of its wealth, not more than one per centum. Mr. Calhonn, in £iis speech in 1864, on the re-charter of the Bank of the United States, said: “ What this proportion is, in our “ country, and other trading and commercial communities, is “ somewhat uncertain. I speak conjecturally in fixing it as 1 to “ 25 or 30; though I presume this is not far from the truth.” The Bank of England notes were, in 1797, made, and con tinue to be, a legal tender in payment of debts. “ Money” has been defined to be “a token issued by government, and made a tender in payment of debts,” and a Bank of England Note is, therefore, money in England. As the money (to Tise the language of Adam Smith) “which “circulates in any country, and by means of which the produce “of its land and labor is dtati-iLnir.yi fn is so smau u pat c vr aggregate value of its property, it follows that if any part of that which is requisite to make that distribu tion be arbitrarily withdrawn, snch diminution must necessarily affect the exchangeable values of the aggregate property, not in the proportion which the sum so withdrawn hears'to the-sum in previous circulation, nor in the pToportion which The sum so withdrawn lore to the previous aggregate value of the whole property of the country, but in a proportion intermediate be tween the two, according to the circumstances under which the withdrawal is made. -For, if the contraction be sudden, the effect will be a panic, creating a ruinous depreciation of the values of property. This feature of tbe financial policy of tbe Bank of England has borne with a‘ crushing and most ruinous effect upon the monetary system of the United States; for theirs being the weaker part of tbe British system, it was necessarily subject to all tbe contingencies by" which the money market of London wa£ affected, with tlie certainty that tbe explosions must of necessity take place in the United States. For, inas much as that Bank’s issues are regulated by the bullion in-its vaults, if, from any canse, there be an unusual demand for specie, as there was in 1825 to enable the Bank to resume and continue specie payments, or in 1836 to pay tbe West India planters tbe $100,000,000 due for their emancipated slaves and to ptil-chase bread, or as in 1857 to defray the expenses of the.war in India, then, the pressure for specie on the Bank will compel the Bank to curtail its discounts; and merchants and manufacturers be ing compelled to pay their indebtedness, instead of selling their goods and manufactures in that market, wHf send them through a London Banker to New York to be sold at auction, the pro ceeds to-be remitted in specie. It is thus that the regulations of the Bank of England act on prices; anc( it was because tbe merchants of England, under the pressure of the Bank screw, were compelled to demand specie, instead of shipping Amer ican produce in exchange for their merchandize in 1822, and in JJB37 and again in 1857, that the banks of the United States were compelled to suspend specie payments ; and it was the fruitless efforts of the banks of tbe United States to sustain them selves against the pressure.thus created, that overwhelmed the United States in ruin and bankruptcy. The continual fluctua tions, the expansions and contractions of the currency and of the credit of the United States, and the overwhelming losses and disasters consequent upon them, are due, not to the overtrading or imprudent speculations of the people of the United States, but are each and all traceable to tbe defects in the monetary system of England, which, whilst making the largest possible use of credit, compels the Bank of England periodically to arrest the progress of her industry by reducing her credits and her cur rency to an apparent specie basis. We say apparent: for fre quent and disastrous as these recurring spasmodic 'efforts have been, they only prove that the end proposed is impossible. To us, it seems that if the issue of Treasury notes of the Con federate Stales, of denominations suited for currency, and con vertible into bonds bearing a rate of interest, which will make them equal to gold and silver, and they are received by the Con federate States, by the several States, and by the several coun ties, cities and towns for taxes, and are also received and paid ont by our banks and Railroad Companies as currency, then they will be received by all our people as money for all the pro duce of our soil and labor, and we cam by their use place our. produce in the market on terms that will enable us to regulate the exchange of the world. Such a currency will so diminish the home demand for gold and silver, that the quantity requir ed for the payment of debts and purchase of property will be no more than the small sums required for change; and this currency, although it will .not take wings and fly to London at tbe call of the Bank of England, will command tire commodi ties which constitute our exports, and which were the basis of the immense bank ereffits and deposits iti the banks of *New York, and which, if we desire it, will create so large a balance in our favor as to compel the flow of a counter current of the precious metals into the vaults of our banks, giving Jo our mon etary system a strength and stability, which will enable us to use the public credit, in the shape of Treasury notes, for a sum so largo as to reduce the duties on imposts below the hopes of the most sanguine advocate of free trade.* What sum of Treasury Notes may be thus used as currency, and what the rale of interest on the bqpds should be, are mat ters of detyil to be fixed by experience; but if tbe sum be $100,000,000, and the interest on the bonds be 8 per 100, the saving will be $8,000,000 per annum, loss the cost of issuance - and administration. If it be $200,000,000, and we see no reason why it may not be more, tkpn the saving to the public will be $16,000,000 per annum, less as before. But this saving will be only a small part of the benefits to flow from such a system. The convertibility into a funded debt bearing a proper rate of interest, will always keep tbe notes at par, a°d the fact that this currency is not liable to take wiDgs and fly away to England or elsewhere, will regulate the quan tity so as to secure to us a cheap and stable currency, which will give constant aud profitable employment to our people. It will bnild our Railroads, cultivate our lands, and, more than all, it will not only prevent depreciation but will give a constant gradual progressive increase in the values of our property. By showing that we have within ourselves all the credit and re sources to" defend and protect our rights, it will, it is to be hoped, bring us a speedy and satisfactory peace. For if tbe North find that°ve not only have the men to fight our battles, but tho credit to pay the expense of the war, they will be more inclined to peace.. It bas been objected that the public may fear an over-issue and consequent depreciation. Tho answer is, that the holder of Treasury notes may at pleasure convert them into bonds, bear ing a rate of interest givifcg a value equal to gold and silver. They will not,-therefore, bo like the paper money of the Revo lution, which was issued at*nominal rates, and were not redeem ed because they were so issued; but they will partake of the character of the funded debt of the United States, which bear ing interest, was a favorite investment and paid oft at a pre mium. This feature will regulate the qtiauwiy of Treasury notes in pircnlation, and the value of the funded debt. For if tbe quantity of Treasury notes is so great as to depreciate their value, theh^eywoqjid be fftnded,ayffl if the price of the funded debt^flfejfin^Ti afcAve vm\ so uirto diminish the quantity of Treaangy ■n^resafn *Trclijjoioqf af they*should ]fe redeemable at pleasure, th^GoyeYlfmyitJj^ a:/ijf’c retted isspfi of notes con. vertible iy#§/bonds/at a 1 ’diipinis.fed rate orinterest, should cancel a sufficientf^um of the fuqdod debt <o fupplj^he re quisite circulation^ and thus reduce the bonds to par. Thus the botids and tlTe notes may be made to regulate the value of each other so as that the value of each shall at all times be at pai with gold and silver. Again. As we have before said, the Banks of the United States havg*been so often permitted to suspend specie payment, and the valbe of the notes of the suspended Banks as a curren cy has been so fully established, that it is only necessary to compare the Treasury notes with the Bank noffcg- Jo prove that they will be* a reliable currency. Congress has power “ to borrow*money on the credit of the Confederate, States.” The Treasury notes will be!a loan, and Congress has power “ to lay and collect taxes, duties, imposts and excises for revenue, ne cessary to pay the debts, provide for the common defence and cany on the government of tbe Confederate States.” The pow er of taxation includes tho right to pay the debts, and as the Bank notes represent the property of the Banks only, and the Treasury notes represent all the property of all the people of all the Confederate States, including as well the property of Banks, as the other property of every description, it follows that the basis of tbe Treasury notes is as much stronger than tlie basis of the Bank notes as the relative wealth of all the peo ple of all the Confederate*States, including, tho wealth of the £auks themselves, is to the wealth of the Banks. But we have a guarantee that there#rill not be an over issue of the Treasury notes in* the fact that so much as are funded will be a debt on the people, whj, through their representatives, can regulate the issues so as to limit the sums to be funded. The writer had the honor to be the intimate and confiden tial personal-and political friend of Mr. Calhoun, and-for many years, to vindicato his opinions, principles, conduct and mo tives from the aspersions of his personal aud political enemies, and especially from the aspersions of those whose political prin ciples, (if they are worthy to be dignified asjirinciples) meas ures and policy be then foresaw and foretold, would, if trium phant in the government, necessarily dissolve the Union. The subject of finance and currency was frequently discussed be tween them, and Mr. Calhoun again and again said that an issue of public credit, under wise regulations, forbidding an over issue, was the cheapest and best form of currency. Were he now living, his whole influence would be exerted to protect the Confederate States from the defects of the monetary system of England and the United States to which we have referred. In confirmation of tbe same views, we would refer to the able work on the “ Ways and Means of Payment,” by Stephen Colwell, of Philadelphia, in which he gives a chapter on the use of public credit as currency. The facts and illustrations which he gives in explanation of the use of credits are so im portant, that we quote much at large. Upon this subject, he says: “ Whatever may be said in defence of the position that paper currency is based upon the precious metals, it is very certain that, both in this country and iu England, paper cur rency is the chief medium of payment. In the first eight months of 1857, the clearings or payment* at the New York Clearing Honse fluctuated between $655,000,000 and $179,000,000 for,each month. In addition to which, huge payments ocowred, not indicated at the Clear ing Honse. All payments made in any Bank by a check on that Bank are completed there, •and do not go to the Clearing House. The Banks only resort to the Clearing Bouse for the adjustment of the checks they receive and the claims they hold on other Banks. The monthly payments of New York were little less than $900,000,000 from January to August, 1857. During that time the average amount of specie in {he Banks'was under $12,000,000; the deposits averaged $5,000,000, and the circulation $8,000,000. It is apparent, then, that $103,000,000 of Bank notes and deposits effected, by aid of the books of the Banks, payment ot not less than $30,000,000 daily, whilst the $12,000,000 of specie in the Banks scarcely moved at all. “ The actuartigency of the precious metals in these current daily payments is altogether too smaU to tie either appreciated or noticed. It Is only employed for the payment of occa sional balances in the foreign and domestic trade. We have already adverted to the tact that when the panic of 1857 set ln v it cost the city of New York a contraction of bank facili ties to the amount of $66,000,600 to retain 3xa.ooo.ooo rfs-u. im August, 1837. the Joans of the New York Banks amounted to $133,000,000 and the deposits to $94,000,000; in the mid dle of October, the loans had lallep to $97,000,000, and the deposits to $52,000,000. Thus the Banks were obliged to withdraw from the public $60,000,000 of paper currency, to keep $l2,0u0,000 of gold in their vaults. This was withholding daily $1,000,000 of the customary bank facilities for sixty-six days. So long as the Banks conld, by this extraordinary contrac tion, keep their average of specie tq nearly the amountof $12,900,000, they continued it About the middle of October eveu this terrible expedient failed. The patience of the pub lic gave way; the people stepped into the Backs and took out $4,000,000 of specie, aud the Banks stopped, t ut the consequences and operation of this contraction are not shown by the fact of the withdrawal of $66,000,000 of currency in as maijj- days. The amount of cur rency at any particular time never exhibits the amount of payments which that currency can Affect in a single day, its power or efficiency must be estimated by the sum ot the pay ments, which can be accomplished within a given time. Tl*g real contraction or diminution of payments would be shown by a comparison of the actnal transactions of the Banks fors day or week as the different periods compared. As it has not been customary to report the whole movement of the funds in the banks, we mnst resort to the Clearu^- Honse for the best approximation. The average clearings in New York exceed $769,000,000 eadfmonlh from January- to August, 1S57; in September they were $481,000,000; in October they were reduced to $308,000,000, much less than half the monthly average firom-January to August. Here ia an actual falling off; in the monthly payments of the Clearing House alone, of $350,- 000,000, or more than $12,000,099 daily ;-that ia, the efforts of the Banks to keep less than $12,000,000 of specie involved a diminution of the payments of the city of $12,000,0.0 daily. The whole sum of the payments made in the Clearing House, in the months of September, October, November and December, 1857, were less, by $1,438,009,000, than theamount paid the preceding four mOfths. The severity of this contraction was further shown by the advance of interest from 8 to 10 per cent, in July to 24 and 36 per cent, in October.” The same writer estimates the payments in the United States in 1857 at $90,000,000,000, and assumes that $85,000,000,000 were paid throqgh the agency of the Banka and bv aet off; and says: “ The credit system has thns accomplished the great result of separating the actual sale and delivery of commodities—the actual transactions of commerce—irom the payments. The progress of civilization and private integrity have made this possible; its immense advantage is such as not only to secure Its conUnnance, hut to make It a very strong safe guard ot commercial honesty Almost the entire commerce, fqjplgn and domestic, of the whole civilized world is now carried on from day to day and year to year with much lew, we believe, than on^ per cent, of the actual values exchanged in coin bullion. The whole of tit o prioss, sales, bargains, books of account, notes and bills of exchange are ex pressed in money of account; and the whole processes of adjustment by bankers, brokers and clearing houses are all stated and expressed in money of account. “ The credit system, then, intervenes with its various devices of books of account, promissory notes, bills of exchange,dbank notes, bank deposits, clearing honses, Ac., to enable the parties who have bought and sold, who are all creditors and all debtors, to liqui date their debts and credits,and thus exti gulsh them so fhr as they are equal; that is, where a merchant has to receive during -the year $200,OOu and to pay $190,000, the credit system adjusts the whole earn ot $096,000, by paying the $10,000 difference in money, aud extinguishing the $380,0004y set off or liquidation. The goods, which go ont of the mans- factory or warehouse, pay for those which come in. The difference only requires money. To effect the exchange with advantage, laborers, horses, warehouses, wagons, drays, canal boats, railways and ships are employed; to effect the payments gold and silver for the bal ances, ills or exchange, promissory notes, bank notes, banks, bankers, tihd all the device* of books, checks and clearing or balancing accounts arc requisite. ‘ Thqecouomy of these means of making payments is scarce less than that enjoyed by commerce in the means of transportation above mentioned. To make the daily payments of the clearing houses in gold would require some three or four hundred tellers; in silver an army oflsomo thousands, witu a vast number of drays, carts and laborers for its removal. The cost of keeping on hand such a quantity of the precious metals would be enormous for the interest alone, besides all the extra expense of tellers, clerks and assistants, lo Eave this, the machinery of credit is pnt in motion, and payments are eff^teda* we have described. Wltat a nation imports It pays for by wnat It exports; what a district receives for its consumption it pays forby what it tarnishes for the consumption St others, and what an Individual merchant purchases in the way of bis business ho pays ^by what he sells in the way of his business. When coined money is used in these tra^dions, they can only he curried on to the extent that such money can be obtained for the purpose, and with that speed at which money can be made to circulate; but when credit in its various forms is used, then this business finds no limit but the limit of human industry in producing, and human power in transportation and distribution and human integrity in the subsequent processes of payment.” If wo. analize the condition of the Banks of New York in 1857, we find that, beyond the snmof $12,000,000, all was cred it. The sum of specie and Bank notes was but $20,000,000, and yet their deposits were $95,000,000! It is apparent tbflf these ninety five millions of deposits were the proceeds of tbe bills receivable, discounted by the banks for account of their customers, which being passed to the credit of the debtors ot the banks became deposits, and were represented in the opera tions of trade by’certified checks, which checks were used in the purchase and ‘movement of commodities and were received b) the banks in payment of debts due to them, and as the debits and credits balanced each other, the payment of thirty million 5 daily was arranged through the clearing house by aiPexchange of these certified checks.- For it is apparent that if sixty banta held thirty millions of bills receivable, which were represented by thirty millions of certified checks which checks had on the day be fore been paid out in the purchase or movement of commodities, the sums due each bank were equal to the sums due by snch baw®, and therefore the sums which each bank was entitled to receive were equal to the sums, which such banks were required to p a J> and it was found that each bank would, in the course of its busi ness receive a sum of the certified checks of other Banks su cient. to pay all of its own certified checks or nearly so; and tba-