The Confederate currency.
The
Secretary of the Treasury, in fulfillment of the law of Congress on the subject has given notice to the public to the following effect:
‘
All Treasury notes issued prior to 6th April, 1863, are fundable in
seven per cent. bonds until 1st of August next inclusive.
After that late all notes bearing date prior to 1st December, 1862,
cannot be funded. Notes bearing date between the 1st December, 1862, and the 6th April, 1863, can be funded in
seven per cent bonds any time on or before the 1st of August, 1863, after which time they are fundable only in
four per cent. bonds.
Notes bearing date on and after the 6th April, 1863, are fundable in six per cent. if presented within one year from the day of the month printed across their face;
that year they are fundable only in four per cent bonds.
Treasury notes issued under the act of 16th July, 1861, and entitled to be funded in eight per cent. bonds payable in ten years, must be presented on or before the 31st day of July, or they will be debarred the privilege of being ed.
Co-operating with the Treasury Department of the
Confederate States, the Banks have determined after the 10th inst. (to morrow) to receive on deposit none of the
Confederate notes bearing date prior to the 1st December, 1862.
These notices are in pursuance of the plan of Congress for coercing the funding of notes of circulation issued by the
Government to meet us expenditures.
Until recently those notes purporting upon their face to be fundable in bonds bearing
eight per cent. interest were funded in such bonds.
They are now only fundable in
seven per cent. bonds, and after the first of August they are
not to be ended at all. These are the notes that the banks decline to receive on deposit after tomorrow.
What the aggregate amount of them now afloat may be, we cannot say; but it must be large.
The time which has elapsed since the plan of coercing their holders to fund them was put in force is too brief to allow us to come to any other conclusion.
There remains but forty-three days within which they may be funded.
After that they are only receivable in dues to the
Government, except on imports.
It remains to be seen how much by the Banks can be absorbed by the at seven per cent. till the first of August and the taxes.
The fewer that are left afloat the better for the people; but it is very clear that they are to lose considerably in any event.--Those notes are now not bankable.
They are in a great degree in the hands of people who are not able to fund them, and who will be compelled to pay them out or sell them.
As they will not be current they must be depreciated before the first of August, and will fall much lower after that.
The plan of the
Government for forcing the holder to convert the
Government currency into bonds has been chiefly aimed at the notes that bore upon their face the promise that they would be funded in eight per cent. bonds.
The expedient of issuing such notes has been found to have been unwise, and we suppose the measure of forcing them in and cutting down the interest upon all not brought in by a certain day was deemed the best for retrieving the finances from such a blunder.
We never believed in the policy of pledging the
Government on the notes issued to the eight per cent., and we have heretofore expressed the opinion that the plan of funding them for less was a partial repudiation by the
Government.
But while the
Government directs its measure for hastening the operation of funding its notes chiefly at these eight per cent. issues, it appears that the screw is also applied to the balance of its circulation.
Holders are informed that the notes issued after the 6th of April last will be funded at six per cent. at any time within 12 months after its issue — after that time at four per cent.
This system promises to bring confusion upon the
Confederate currency, by establishing as great a disparity in the value of the notes of which it consists as there must exist in the
Government bonds, which will bear respectively,
four, six, seven, and
eight per cent interest.
We cannot but regard such varying interest and such varying values in the notes issued by the
Government as productive of advantage to none but those who
speculate in Government securities. They are calculated to embarrass the ordinary transactions of communities, and we apprehend will add nothing to the credit of the
Government.
The financial policy with which the
Government begun operations was erroneous.
The expedient of paying the first interest that fell due on the public bonds in gold seems to have been an indication of that policy.
Everything was to be gilded over to inspire confidence in the public credit.
And yet notes were issued promising eight per cent., which argued that that credit needed an extravagant premium to help it along.
This was a mistake: it did not require these fictitious aids to inspire confidence in a Government whose resources are, for its population, superior to that of any Government on the face of the earth.
Their abandonment by the
Government proves this.
Of all the financial measures of the
Government, that of imposing taxes for its support is the wisest.
That will do more for its credit and for the relief of the people by improving the value of the currency than anything else.
We base large calculations upon that.
It ought to have been resorted to a year sooner.
If the system of
driving the notes into the bonds succeeds thoroughly it will be a happy result, and will complete the work of lifting up the credit of the
Government circulation.
But we fear that while the inducement of eight per cent. hurried in a large amount of notes to be funded, it will be found that
six and
four per cent.
will not have a like effect.
’
