1862, the Congress of United States passed two separate acts, authorizing the issue in the aggregate of three hundred millions of paper currency, which was made a legal tender by the terms of the law. Thus, the Congress of the United States, by the force of circumstances, or rather by the necessities of the government, speedily reversed the proposal of the Secretary of the Treasury; the second plan was postponed, and the first, which was thought to be the least desirable, was brought successfully into operation.

The second plan yet remains untried. Our present Congress, at its last session, passed by a very large majority the act of July 11th, 1862, which, in addition to the issue of $150,000,000 of legal tender notes, also provided that $35,000,000 of this issue should be in notes of small denominations, and also gave the Secretary of the Treasury authority to establish a government engraving establishment. Both of these provisions, though opposed by the bank interest, were enacted by a Congress largely composed of members interested in the banks of the different States which had heretofore enjoyed the monopoly of furnishing the paper currency of the country. There can be but little doubt, therefore, of the passage by the same body of an act establishing a national bank department, provided the administration in power shall recommend such action. We believe its adoption is demanded by the people, and that no time ever has or ever will again exist like the present to remedy the greatest financial evil of the times, which for the last fifty years has been a fruitful subject of discussion.

The circulation of the banks of the United States, according to the last official report in 1861, was about $203,000,000, as follows:

The charters of the State banks of Ohio and Indiana, and a large proportion of the safety fund banks of New York, together with other institutions, are to expire within the next three years.

The currency of the Northwestern States to the amount of $25,000,000 is either already retired, or is so discredited as not hereafter to circulate except in the immediate vicinity of its place of issue.

If to these amounts were to be added the currency of the States in rebellion, now hopelessly bankrupt, the aggregate would make a sum total of at least $100,000,000, or nearly one-half of the bank currency of the country.

The bank currency is therefore now less than at any time during the

last twenty years, and if the chartered banks are to expire with the limitation of their charters, only about one-half of the bank currency of 1861 will remain to undergo the gradual transition from a State to a national system.

The legal tender currency of the government has received a universal circulation. It is now fulfilling the function heretofore performed by gold and silver, which necessity has converted into articles of merchandise. It has been greedily received in the South among enemies, as well as in the North among friends, on the farthest frontier, and in the Pacific States where paper was never before recognized as money; it has been hoarded by the people and the army; and it has been held in reserve by the banks themselves, because it would redeem their own currency, and because they know it to be more reliable than their own issues. To one who has witnessed its popularity in the West, as well as the East, it is not surprising that $200,000,000 of this currency has been so readily absorbed, that $12,000,000 could not be obtained at the great commercial center a few days since, when required for government purposes. The legal tender currency, in spite of the speculations of gold in Wall-street and the high premium, (hereafter to suffer a decline as rapid as its advance, upon the triumph of our armies,) has been a success, and the people throughout the country, who are untrammelled by the influence of corporations and associations, desire that the remainder of the bank currency, whose average existence is less than the average life of a citizen, shall give place to a permanent government currency which shall be safe, convertible, and uniform.

Believing that the system already inaugurated is soon to be perfected, that our legislators will seek rather the good of the whole people than the interest of a few private corporations, and that the government is hereafter to control the currency as originally contemplated by the Constitution, we propose simply at present, to suggest a few of the practical details of the system, reserving other questions concerning a national currency, to which passing events have given a new interest, for future consideration.

1. The currency issued to the banks should be safe.

The plan of Secretary CHASE proposes to issue currency to parties only on the deposits of United States stocks. The parties by whom it is received are to be responsible for the currency issued to them; but it is not clear that the liability of the government is to extend beyond the value of the stocks. It is intended that the government shall control the issue, which shall be based on its own funds and at a rate to be fixed by itself.

It is said that the bonds of the United States, with its vast resources of every kind, are the best basis in the world for a currency. This we believe; and no matter how large the debt of the country may be at the close of the present rebellion, if the finances of the country are so managed that the interest on the debt is promptly paid, the bonds cannot depreciate largely in the money markets of the world. The government, by guaranteeing this currency, would merely reassert her intention at all hazards to provide the interest on her debt; and every argument that may be adduced to show her ability to meet promptly her liability, will serve only to strengthen the propriety of her guaranteeing the national currency. Such a guaranty would in fact only be a promise that the government, in

case of the failure of some corporation to whom she had issued notes, would purchase her own bonds at the rate fixed by herself. If the government should decline to guaranty such a currency, the issue of which she had assumed and controlled, it would seem to discredit its own funds. If, in addition to the security deposited, the government should insure the final redemption of all currency at par, no monetary crisis could ever shake the faith of the people in the notes. If a single bank should fail its currency would still pass from hand to hand, and there could hardly an instance occur in which the government, after having wound up the corporation, could be a loser. If losses should happen the abuses of the system would soon be corrected, and the increased faith of the people in the currency and the demand and appreciation of government stocks would much more than compensate for all such losses.

2. The currency issued to the banks should be convertible.

It is not sufficient that the government currency should be redeemed at the place of issue. Great abuses have already been the result of such laws. Remote points are sure to be selected as places of issue, and the discount upon bank notes becomes as varied as the currency itself. The great Eastern cities-New York, Boston, and Philadelphia-are the great centers of trade, and every bank and banker throughout the country always has funds on deposit at one of these points. The national currency should either be redeemed at one of those cities, or by agents at some one of the great cities of the country to be selected by the party issuing currency. The rate of redemption at the agency selected should be equal to the cost of transportation of bank notes from the place of the agency to the place of issue. This rate would vary from to of one per cent discount, and should never exceed the last named amount. Thus the whole currency of the country would be so nearly of a uniform value that it would be received by every bank from Maine to Minnesota. Statements made weekly or monthly by the different agencies in the large cities, giving the amount on deposit with them by the country banks for the redemption of currency, would at all times indicate the solvency and ability of the banks of the country; and the increased amount of deposits in the great commercial cities would insure this influence and cooperation in the organization of the national system.

3. The currency should be uniform.

If any man has the curiosity, or will take the trouble to study the statistics contained in either of the quarto volumes which are weekly published in all the large cities under the name of "Counterfeit Detectors," he will find that there are in existence nearly sixteen hundred different banks, and that from these banks are daily being issued more than ten thousand different kinds of bank notes, and that a large portion of these issues have been frequently copied and put in circulation by the counterfeiter and his copartners in business.

We have to-day, in every loyal State with the exception of California and Oregon, a currency issued and encouraged by sanctions of law, more than forty different banking laws, depending on the judgment, caprice, or iniquity of the Legislatures of thirty-four different States, and which are changed or repealed as often as pliant and plastic legislators can be moved or moulded by the influence of monied institutions or corporations, until

now both the banker and the bill-holder require a library of bank statutes to give them information which ought, by its simplicity, to be at all times on the tongue's end of every business man.

A foreigner or a stranger traveling through the country, at the hotel, in the railroad car, on the river or lake, by friend and foe, has offered to him in exchange for gold, slips of engraved paper similar in size, but as often worthless in value, as equal the sum they represent and promise to pay. In Massachusetts and New York the inconvenience is comparatively trifling, for the bank currency is composed of the issues of New England and Middle States; but in the West the people have suffered for years from the issues of almost every State in the Union, much of which is so irredeemable, so insecure, and so unpopular as to be known by opprobrious names rather than the money it pretends to represent. There the frequently worthless issues of the State of Maine and of other New England States, the shinplasters of Michigan, the wildcats of Georgia, of Canada and Pennsylvania, the red-dogs of Indiana and Nebraska, the miserably engraved "rags" of North Carolina and Kentucky, Missouri and Virginia, and the not-soon-to-be-forgotten "stump-tail" of Illinois. and Wisconsin, are mixed indiscriminately with the par currency of New York and Boston, until no one can wonder that the West has become disgusted with all bank issues, and almost unanimously demand that such a currency shall be taxed out of existence, and give place to a uniform national currency.

The Secretary of the Treasury proposes a remedy for these evils. He proposes to issue currency to the different banking institutions of the country; but with the exception of the name of the corporation, there is no reason why all the notes of the same denomination should not be precisely alike. In place of the ten thousand different bank notes now issued, with thousands of devices, serving only to bewilder the holder, under this system we should have but ten bank notes, each with a distinct character of its own, with its vignette and its minutest die and engraving so familiar and expressive that no one need ever be deceived.

4. If the currency is to be safe, convertible, and uniform it must be so engraved as to guard against counterfeits and fraudulent alterations.

The statistics with regard to the counterfeiting of bank notes, if it were possible to collect them, would be more astounding than anything contained in the census reports. These frauds have been practised extensively for years, giving occupation to hundreds of people whose profits have steadily increased with the business of the country and the issues of the banks. Private individuals and corporations have been defrauded of fortunes in a single day, and the losses to the people during the last fifty years from such frauds can only be computed by millions of dollars. The hindrances to the business of the country from the difficulty in the detection of the multitude of fraudulent bank notes of itself is a sufficient reason for a change in the present system. The people who might soon learn to detect a score of fraudulent issues, have long since despaired of the hope of detecting thousands of such issues, and a "good judge of money" is as necessary as a book-keeper to every mercantile house; however diminutive may be its busi

ness.

A law already passed gives the Secretary of the Treasary "the power to cause treasury notes to be engraved, printed and executed in such form as

he may prescribe, at the Treasury Department in Washington, and under his direction, and to purchase and provide all the machinery and materials, and to employ such persons and appoint such officers as may be necessary for this purpose."

If a national bank department shall be established the bank note will then hereafter be engraved as well as issued from the Treasury Depart ment. The most perfect machinery will be procured, and the most skillful workmen will be employed, and the greatest care will be taken to issue a national currency in the highest style of the art, and having its own peculiar and distinctive characteristic. The government will, undoubtedly, like the Bank of England, procure the manufacture of a bank note paper for its own exclusive use, thus supplying itself with a simple preventive which has never been a characteristic of currency in this country, and which for so many years has baffled all efforts at imitation in England. The minutest lines of the engravers, as well as the water marks in the paper, may have their well understood or secret meaning, rendering the frauds of the counterfeiter and the costs of the photographer nearly impossible.

*The alteration of bank notes of late years has been the most successful fraud of the counterfeiter. The bank note engraver, with a wrecklessness which ought not to be excused, furnishes to corporations bank notes of high and low denominations almost precisely alike. In numerous instances using the same die and vignette indiscriminately for the small denominations of one note, and for the large denomination of others, the engraver has destroyed much of the aid associations might have furnished in the detection of fraudulent alterations. The counterfeiter henceforth discards the costly and cumbrous machinery of the engraver. With only a pair of scissors, a few easily attained chemical substances, and a fine quality of glue, with nimble fingers, and clipping at pleasure, he transfers from one bank bill to another the die, the word, and the figure which indicate the denomination, thus in a few hours changing many an insignificant one or two to tens and fifties. Not only is the prominent die that denotes the denomi nation entirely abstracted and a new one replaced, but even the fine lettering of the border and the center with equal facility are exchanged. If the engraver stamps in large letters the denomination on the face of the notes, these letters are entirely obliterated from one set of notes and furnished to another not provided with the preventive. Black ink, red ink, green ink, large letters and figures, borders and stripes, although at first of good service, in the end seem rather to facilitate than to retard those unlawful practices.

Of the legal tender notes recently engraved for the Treasury Department, the chief vignettes of the one, the two, the fifty, the one hundred, and the one thousand dollar notes are each portraits similar in size and appearance, and the vignette of the two and the one hundred is the American eagle. The vignette of the two and the fifty is the same portrait of ALEXANDER HAMILTON, and the general appearance of the two notes is almost precisely alike, and alterations of these notes have already been announced.

To prevent such alterations, there exists a remedy simple, effective, and

* For a former article on this subject see Hunt's Merchants' Magazine for July,