res,
arising from funding more rapidly our treasury notes, thus rendering our
currency less redundant and depreciated, with the revival of the public
credit, and its immediate happy influence, North and South, here and in
Europe, would far more than compensate for any contingent advantage
arising from short loans. Our twenty years' loan is now barely at par,
and the five-twenties below par. The difficulty of inducing bank and
other capital to invest hundreds of millions of dollars under the new
system is very great. Is it wise to commence the effort, confined to our
weakest securities, now below par? Besides, considering the old and new
debts, and constantly increasing responsibilities, is there any prospect
that we will have liquidated all these before the end of five years, and
the five-twenty loan also? Surely, upon a benefit so doubtful, and a
contingency so improbable, we ought not to risk the fate of a measure on
which depends the safety of the Union. But if we could pay off the
five-twenty loan held by the new banks, is it prudent to assume that so
many hundred millions of capital will be withdrawn from the present
banks and other business for investment in the new banks, which may
cease at the end of five years by payment of the bonds? The change from
the old to the new banks may involve some loss at first, but, if the
system may be arrested at the end of five years, just when profits might
be realizing, the plan could scarcely succeed. When the Secretary first
proposed this system in December, 1861, he probably would have succeeded
with the five-twenties, in the condition at that date of the public
credit. But the disastrous fall of our securities since that date, seems
now to require bonds of a higher value.

I would then provide a twenty years loan, for all that may be made the
basis of the new bank circulation. But it is not a six, but only a four
per cent. twenty years' loan that is proposed, by deducting one per
cent. semi-annually from the interest of the bonds made the basis of
this bank circulation. This deduction would only be a fair equivalent
for the expenses incurred by the Government in furnishing the
circulation, for the release of taxes, for the deposit of public moneys
with these banks, for making their notes a legal tender, and receiving
them for all dues except customs. The tax on all other bank circulation
should be one and a half per cent. semi-annually, secured by adequate
penalties.

If,