The average advance in prices according to these tables is 55.44 per cent; but if we deduct the four articles cotton, turpentine, rosin, and tobacco, which may be more influenced by the war than by paper, the advance is reduced to 51 per cent average. It will be observed that the advance affects every article, and ranges from 10 to 220 per cent. The gold advance was only 32 per cent, but in the first two weeks in January it rose to 50 per cent, or nearly the same as in the table. Mr. CHASE was pleased to say there had been no inflation, but the fact is as stated. Now, it is very evident that his estimate of $500,000,000 of expenses for 1862, based on the prices of 1861, was disturbed by the amount of the rise; in other words, he got for his $500,000,000 only as much merchandise as he could have got for $350,000,000 in 1861. Hence the deficits required. The rise is now more rapid than ever, marking the depreciation of paper, and an immense further amount of paper money is yet to come upon the market. The question then arises, what will be the advance in the next eighteen months? We will assume that it will average as much as in the past year. In that case, to procure the commodities, rations, &c., which he estimates at $1,350,000,000, will require $540,000,000 more than the estimate-in other words, $2,200,000,000-which, added to the present debt, will be $3,000,000,000 January, 1864. This is based upon the estimate that but a very small proportion of the whole will be procured in paper money, or that $1,500,000,000 may be raised by loan. The difficulty of so great a conversion is apparent, and suggests the urgent necessity of confining the government to the one all-important object of maintaining the war. That war should be conducted on the most economical plan, and every expense not bearing directly upon it cut off. Every dollar spent for another purpose, or wasted, weakens the war. To reduce the expenses of the government, a return to specie payments is indispensable. Because it will bring all prices to the lowest points, by which the government will purchase to better advantage, the national exports be greater, and imports less. The profits of industry will then enable the people to bear the necessary taxes to pay at least 80 per cent of the war expenses within the year. The remainder may then be cheaply borrowed without endangering the national faith or its ability to maintain unimpaired its integrity. The capital asked for cannot be borrowed and applied to war purposes. The census for 1860 shows that $900,000,000 of capital is employed in reproductive industry, employing 1,250,000 persons producing wealth. It is notorious that capital in this country is very scarce for such employment. It is always in high demand. There is also a large amount of surplus capital in the country, the accumulation of eighty years untaxed and peaceful industry. This capital is invested in various ways, bank capital, insurance, manufacturing, railroad stocks and bonds, State, city, and country debts, savings banks, ground rents, mortgages due, etc., all of which reach over $2,000,000,000. None of this capital lies idle-it is carefully put out and kept drawing interest. Thus the capital is as follows: Capital employing industry Total.... $900,000,000 2,000,000,000 $2,900,000,000 This has been the result of our whole national life of most wonderful industry. The government now comes forward and asks that one-half of the whole of that amount shall be paid over to it in money in eighteen months! No sane man would dream of such an operation. Now, it is evident that no considerable amount of capital can be borrowed without drawing it either from that which employs industry, or that which is invested. If the government offers such rates as to tempt employers to stop work, discharge hands, and sell out to employ the funds in the government stock, industry comes to an end, and the source of national wealth is dried up. If the rates are made so as to tempt investors to prefer the government stocks, then all classes of securities must fall in the proportion in which the operation is pushed. Thus, if the government credit was considered as good as others, and the existing $2,000,000,000 invested be considered as all the capital in the country at par, then, if government securities to the amount of $1,500,000,000 more is put in the market, there will be $3,500,000,000 to represent $2,000,000,000 of capital, and the average price would be 60 per cent. But such a conversion could not go on without ruining half the country. It is evident, then, that the maintenance of the war and the support of the government demand an active change of the present system. The patriotism, as well as the means, of the people are adequate to the emergency if properly directed, and the resources of the country properly applied to the one great object of putting down the rebellion. The following table shows the official figures for the debt January 1st. There was paid on the 1st of January the remainder, $2,883,364 11, of the debt of 1842 in gold. The fate of that loan had been a matter of speculation, as to whether it would be paid in paper or gold. To pay in gold, which was necessary to the public credit, would require $3,600,000. At the last day, however, the banks agreed to lend the gold to the government at 4 per cent, to be returned to them from the first received from customs after the demand notes shall have been absorbed : The debt increased during the year $525,848,707 50, made up as fol lows: This sum in round numbers-$500,000,000—is not taken into the account of the year's expenses; at the end of the 18 months $50,000,000 of the 7, bonds falls due. These considerations, which resulted from reports and speeches of the gentlemen who direct the government finances, caused a kind of panic in the market, gold rose rapidly from 30 to 47 per cent, and the federal 6 per cent 20-year stocks fell 6 per cent in the same period, although all other stocks representing property or railroad shares, &c., rose rapidly in price. The following table indicates the course of the securities for the opening year: With the prices of the 20-year stock at 92 for paper, and gold at 47, the specie price for the federal 6 per cent 20-year stock in gold is 68. A person in England or Canada for $68 may buy $100 of that stock, of which the interest is paid in specie, being at the rate of 9 per cent per annum, in addition to the rise in price. Yet no buyers are attracted, although a few years since the Federal Treasury offered 22 per cent premium to redeem similar stocks; on the contrary, the disposition abroad seems to be still to send stocks here for sale. Perhaps a better estimate of the enormous rates that the government is paying for money may be made with specie. Thus, the price of gold is 148, and United States 6 per cent 20-year stock 92. The owner of $1,000 may sell it for $1,480 currency, with this he may buy $1,600 of United States 6 per cent stock. This gives $96 per annum interest in gold, or more than 9 per cent interest in gold, and at the end of 20 years he gets $1,600 in gold for his $1,000 paid; $600 at the end of 20 years is worth, at 6 per cent, $187; now, consequently, the government actually offers to-day to borrow, payable in gold at 17 per cent. The banks of the three cities hold $50,000,000 in gold, which will buy $80,000,000 of stock, being $4,800,000 annual interest in gold. We may compare the investment of $50,000,000 in gold last year at 90, with the present: Thus, for the use of the $45,000,000 borrowed last year the country pays in 20 years $65,000,000. The lenders may now get more than double, but they do not take the bid. Yet with such terms in the market, Congress affects to restrict 6 per cent loans to par! The several bills before Congress, having for their object to supply the Treasury, do not widely vary as to results; but on the 17th January one was introduced by Mr. HOOPER, of Massachusetts, which contains a clause of much significance. The bill proposes to borrow $900,000,000 in three modes, at the discretion of the Secretary; 1st. 20-year 6 per cent bonds, profit and interest payable in gold, in denominations not less than $50, and to be sold not less than par, and any indebtedness of the United States may be taken in payment. 2d. Six per cent Treasury notes not over three years to run, principle and interest payable in paper, denomination not less than $10, and to be taken for all dues except customs. 3d. Legal tender notes. The Treasury notes and legal tender it is proposed to issue for each other at the public option. Inasmuch as the only 6 per cent stock negotiated by the government since the war began was at 89 for gold, and it has been selling for 92 in paper the proposition to sell any part of $900,000,000 not less than par, cannot be considered serious. Treasury notes at 6 per cent, payable in paper, will sell very far below par, and as they are redeemable at the will of the holder at par, for notes, the whole may be regarded as only an act to issue $900,000,000 paper money. The important clause is however the 5th. It provides that gold may be received on deposit, and certificates issued therefore like the legal tender notes, but in sums not less than $20. The certificates may be paid out for interest on the public debt to an extent not more than onefifth in excess of the specie on hand. This is a proposition to pay interest in paper money, based on coin, in the proportion of four to one. It is, in fact, a new currency, purporting to be redeemed in the coin which the Treasury owes its creditors. The receipts to be taken for customs instead of coin. It does not propose to allow interest on the coin retained. It is an attempt to make a little specie go a great ways. It is no doubt the case, if the government paper money was discredited like post stamps or the shinplasters of individuals and corporations, a severe pressure would result for the moment, but specie would flow rapidly in to purchase those securities and property, which is now avoided. The danger of paper money now drives off investors, and causes |