Confederate currency and credit.
The plan of driving Confederate notes into Confederate bonds, by degrading them after a limited time, is one of questionable justice and questionable wisdom. By it we shall see in a few days a large part of the Confederate circulation reduced in value below the balance of that circulation. It is declared not fundable after August, and the Banks, conspiring with the Government to degrade its own paper, refuse to take it on deposit. This rejected and denounced currency, too, is that which was issued from the Treasury Department with the expectation that its own story would commend it everywhere. Its promise of eight per cent. was the flattering tale of interest to give it general passport and favor. Yet we find that suddenly, upon a notice of a little over two months, that interest was reduced to seven per cent, and the notes are refused by the Banks; and in three months more they are declared not fundable at any rate. The summary degradation of a currency such as this is a sample of the operation of the plan. That it will occasion loss to "innocent" holders, and throw profit into the hands of speculators, is certain; that it will impair somewhat the credit of the general currency of the Government, by disturbing public confidence, may be feared.The system, however, is to be extended to subsequent issues. The notes issued since the 6th April and hereafter to be issued, are to be allowed to be funded within a year from the date of their emission, at six per cent.; after the end of that year they are only fundable at four per cent. Now, if there is a want of disposition to fund these notes, is the funding to be stimulated by a refusal of the banks to take them on deposit, (as in the case of the eight per cents.,) and thus practically to make them uncurrent? The Government having set out with the promise of eight per cent., and found the driving system of degrading its issues necessary to stimulate investments in bonds even at that rate, can hardly look for an increased desire to invest at six and four per cent. Should bonding flag, and the banks be induced, in regular succession, to apply the screws, and reject, in turn, another degraded currency, what will likely be the state of affairs? Why, that so large a part of the Confederate currency will be uncurrent that the credit of the whole must inevitably be impaired.
Governments cannot have immunity from the commercial and moral rules which are held just and lawful in the affairs of men.--These rules are based upon common sense and practice, and have the good and right of all in view. The Government in promising one interest and giving another — in demanding and enforcing an exchange of one promise to pay for another — is certainly, as a borrower, not complying with them. Had it sold its bonds and taken in its notes, it would have acted more in accordance with commercial usage. Nor would this course have been financially less beneficial than the one adopted. It would have preserved uniformity of value in notes. It would have avoided the depreciation of them by declaring a large part of them neither fundable nor bankable, and, as we fear, some detriment to its own credit. It would have avoided any question of the intentions of the Government — any apprehensions of unfairness. It would have saved the people from the trouble of criticising and culling Confederate notes to find the bankable and the uncurrent. It would have saved them from the losses consequent upon an unconvertable and uncurrent paper issue of a very large amount.
As there exists generally the most perfect confidence in the ability and resources of the Confederate Government, it is to be all the more regretted that it should resort to measures which are calculated to do it no good and to occasion public inconvenience. We anticipate that they will be found so to operate, and be abandoned — leaving as marks of their impolicy a series of bonds and notes varying widely in their values; a variation wrought upon promises to pay issued to the people, all for the same purpose, all taken with the same confidence and trust, and neither being properly entitled above another to preference or excellence!
