The value of a currency such as we now have, depends upon public opinion,* first as to its redundancy, and when redundant, as to its ultimate redemption. This, of course, depends upon the course of political events. As the proportion of redundant currency fluctuates every moment with the shifting requirements of commerce, and as the standard by which its value is measured is peculiar for its inherent qualities of indestructibility, divisibility, mobility, and tangibility; so merchandise, real estate, and labor, which possess these qualities to a greater or less degree than the precious metals, are affected by the fluctuating value of the currency in unequal proportions, and refuse to keep pace with its fluctuations at the same time, or to the same degree. This of course leads to constant speculation in these things, and the uneducated and inexperienced must lose by them.

In due time, of course, the prices of merchandise, real estate, and labor, will attain the level of the price of specie; and so does the troubled ocean eventually find its level; but not nntil destructive storms have damaged the shipping that floated on its bosom. Even so has every department of industry been tossed about and much of it completely wrecked by the working of this fluctuating currency; and even so are they still hove-to, at mercy of this fitful blast, unable either to proceed or to return to a safe anchorage.

It is not proposed to put a premium upon either ignorance or indiscretion; but it is certainly unjust that the great body of the nation, unused as it is to a state of war, should be exposed to the arts of that handful of sharpers who travel from country to country, and settle in none, extracting lessons from the extremities of one nation to reap from them golden harvests during the sore trials of another. It is true that we all ought to be familiar with the effects of war and irredeemable paper money upon prices; and so ought we to know the statute laws of the country and the laws of personal health. But who among us can dispense with the services of a lawyer or a physician, upon critical occasions?

The Secretary (p. 22 of the Report) appears to have been almost on the eve of making this discovery for himself; but, after a casual examination of the extraordinary fluctuations in the currency which occurred last Fall, he gives it up, satisfied that "a solution of the problem may be found in the unpatriotic and criminal efforts of speculators, and, probably, of secret enemies, to raise the price of coin!"

It is this sort of speculation which it is desirable to no longer afford encouragement to; and remembering that it is the fluctuation of the currency which prompts speculation, and not speculation which causes the fluctuation, but the fact that its redundancy cannot discharge itself, nor its insuffi ciency supply itself concomitantly with the wants of commerce, we are now to inquire what is the most effectual means of bringing about this desirable consummation.

The Secretary, had he bestowed the least reflection upon the subject, could scarcely have failed to reply as we now reply by coming at once to specie payments.* And how is this to be effected? By an immediate repeal of the Paper Legal-Tender Law. "But this would be repudiation," cries a nervous holder of Government securities. Not at all. The Treasury note will be worth as much when it is no longer a legal tender as it is to-day-so many cents in gold, so many pounds of flour, so many yards of cloth-just as in California, where it is neither practically a legal tender, nor is it repudiated. But who would take it? The Government, at its market price, for gold-interest-bearing bonds. And if the Government took it, everybody would take it. All present money contracts to be, of course, dischargeable in paper.

This great measure would at once confine speculation within rightful limits-speculations upon the chances of war, the influence of the seasons upon harvests, and other contingencies which affect prices, and which are proper subjects for the competition of individual judgment and foresight. Then everybody could speculate who wished to, and that state of things would be ended which furnishes an exclusive monopoly to the wandering adventurers whose talents for speculation are acquired in successive scenes of warfare and civil commotion.

Besides this incidental advantage, its direct ones would be very great. First of all, the Government would be able to borrow at any time. Whatever credit it possesses to-day,

In the Report (p. 4), the Secretary reverts, with singular confidence, to what he designates the "unanswerable demonstrations" of Mr. Chase, in his Report of December, 1862, concerning the necessity of resorting to paper currency. Are these reasons of a narrow expediency, applied to a moment of great emergency, to be kept alive, like the alcavala tax of Alonzo XI., long after the occasion, which offered them even a plausible excuse, has passed away?

with the present discreditable system, would be vastly increased upon a return to specie payments. Then by the fall in prices and profits, and the economy which would follow the establishment of a sound currency, the present frightful expenditures of the Government would be reduced to com paratively moderate proportions; official corruption would be sensibly reduced; and requisite financial originality eliminated and called into play. The savings in interest alone would be enormous. Hitherto the Government, by means of periodically flooding the currency, and taking advantage of that moment of overflowing, which eventually settles down to a new level of exact fullness,* has succeeded in having allits loans taken at or over par. This result was inevitable, and might be effected over and over again ad libitum. But such loans are, in substance, forced loans, and are succeeded by all the consequences of such vicious measures, the most obvious of which is the withdrawal and absorption of large portions of first the investment, and then the working capital of the country, and the conversion of other portions of both into speculative capital. It is the latter species of capital which it is desirable to borrow or to turn into more productive channels, and neither of these ends can be effected by any other means than a return to specie payments.

The consequence of borrowing money by these forced means has been the necessity of offering ruinous rates of interest rates which can only be seen in the depreciation of the currency. United States Sixes are to-day offered at a rate

The Secretary says (p. 19 of his Report), that: "It is observable, notwithstanding the apparently large circulation of paper money issued under the authority of Congress, its scarcity in the market has occasioned no slight embarrassment in the negotiation of loans," and attributes it to popular hoarding! It is really mortifying to meet with crudities like this, in a Statepaper of such gravity as the Report of the Secretary of the Treasury. The fact is a fact familiar to all students of Political Economy, that, of an inconvertible legal tender paper currency, none of it is unemployed.-See Tooke's Hist. Prices, iv., 222–23.

By "investment capital" is meant, that which, being unaccompanied by the personal labor of the original owner, is first tempted from its regular employment by higher rates of interest, when added to security-the latter being its main desideratum. By "working capital" is meant, that with which the owner runs some risk, for the sake of larger profit. This yields next in order to the allurements of higher interest and Government security. By "speculative capital" is meant, that which is employed in enterprises involving considerable risk of security, for the compensation of those large profits or quick returns which distinguish such employment.

equal to fifteen per cent. interest per annum, and a few months ago were offered at eighteen. The primary cause which set such a system in operation was that inexcusable error which consists in refusing to believe that what the Government wants is not money, but supplies. After all, these ruinous rates of interest tell the whole story of financial mismanagement which we have been and still are suffering from. This is the quadrant which fixes the financial prospect, of which prosperity is the zenith and ruin the horizon. Fifteen per cent. per annum! Does it not make the Secretary blush, that he should resign himself to a policy which involves such extortion? We all know that in all probability the capital of this debt will never be paid. The time has passed when any hopes of redeeming it were entertained. It is the payment of the interest to which we now look. To meet this promptly is all that the Government is expected to do; and to reduce the rate of interest as much as possible is the only means by which we can hope to decrease the debt. But this depends upon the savings of capital; and this again upon tranquillity, security, and prosperity. All these are affected by the war, but their interruption is unnecessarily aggravated by a fluctuating currency. Remove this pregnant cause of half our financial troubles, and not only will the credit of the Government be enhanced, and its capacity for borrowing concomitantly increased, but commerce will feel renewed encouragement, and the arts of peace will exert themselves to bind up the wounds which war is inflicting upon us. Then, instead of lying like a leaf in an eddy by the shore, while the mighty stream of civilization and development sweeps the rest of the world along, this people will once more join in the grand march of progress, and redeem its lost place among the nations.

We here close our review of Mr. FESSENDEN'S Report. Neither to the nation of tax-payers to whom it is addressed, nor to the Government creditor either at home or abroad, can its contents afford any degree of satisfaction. Inaccurate in its figures, confused in its arrangement, entirely obsolete in its statements of the Public Debt, and infelicitous in its suggestions for improving the revenue, it has been a task of no little difficulty to impart to this review of it that required clearness

* Even the absurd Sinking-Fund law now extant has been abandoned.-See Report.

and method which was necessary to the proper elucidation of its contents. Engaged with the task of keeping a multiplicity of important topics in proper subjection to one another, many minor points of interest have necessarily been overlooked, such as the National Banks, Foreign Loans, future emissions of Gold-Interest-Bearing Bonds, &c. But enough has been said to show that Mr. FESSENDEN has not succeeded in laying foundations for repute as a financial minister. Nowhere has he risen above that level which is indicated by his recommendation for a law to punish speculation in gold, and which is to be found on page 23 of the Report. A reputation in public finance, as in literature, is to be gained only by sowing acorns which future generations will enjoy in sturdy and enduring oaks, and not by planting those early vegetables, which, like the measure alluded to above, may meet with sufficiently quick returns, but whose momentary existence serves but a transient purpose.

Nothing but a sense of public duty could have induced us to so severely criticise the official measures of a public officer distinguished for so many eminent personal endowments as is the present Secretary of the Treasury; and especially in a time when criticism sounds to the patriotic ear like the carpings of discontent or inimicality. But, like the surgeon whose scalpel lays bare the seat of disease with cruel insolicitude, we have probed the unhealthy parts of our financial system, only that it might derive those true restoratives which are to be found alone in the wise and well-considered lessons of Political Economy.