THE TREASURY REPORT AND MR. SECRETARY CHASE.

The military condition at the present time is highly encouraging; but our armies have not always been successful in the field, and many of our campaigns have ended either in disaster or without decisive results. The navy, though it has achieved much in some quarters, has not altogether answered to the reasonable expectations of the country or to the vast sums which have been expended to make it powerful and efficient. Our foreign relations, during the war, have sometimes assumed a threatening aspect, and, it must be confessed, have not always been managed with the skill and firmness due to our prominent position among the nations of the world. But there is at least one department of the Government whose general operations during all these vicissitudes have been the subject of just pride to the American people. In the midst of great difficulties, sufficient to appal and disconcert any ordinary mind, our stupendous fiscal affairs have been conducted with unrivalled firmness, ability, and success. All our military and naval operations, and indeed our whole national strength at home and abroad, have necessarily been in a large degree contingent upon the public credit, and this has remained solid and unmoved except to gain strength, in spite of all the disasters of the war on the land and on the water. The recent annual report of Mr. Chase, though chiefly confined to a simple statement of facts and figures, is like the account of some great victorious campaign, submitted by the unassuming officer who conducted it. The achievements of the Treasury are in fact the greatest of all our victories; they underlie and sustain the prowess of our armies, while they signalize the confidence and the patriotism of our whole people. Without them the peril of the Union would have been infinitely enhanced, and perhaps it would have been wholly impossible to conquer the rebellion. There was a narrow and difficult path to tread in order to avoid national bankruptcy; it was necessary within three years to raise fifteen hundred millions of dollars, and a single false step might have doubled or trebled the amount even of that enormous demand. How often has intelligent patriotism trembled to think that the failure of our finances would involve the probable futility of our sacred war for the Union, with all its tremendous sacrifices of life and property!

Nobly have the people sustained their Government; with a wise instinct of confidence, they have freely risked their money, as their lives, in support of their own holy cause. This confidence at home has given us unbounded strength abroad. Nor do the facts in the least diminish the credit fairly due to the Secretary, whose great merit is to have organized a system so well calculated to attract the confidence of the people and to inspire them with a sense of perfect security in trusting their fortunes to the keeping of the nation for its help and support in the hour of supreme peril. It is the highest evidence of wise statesmanship to be able thus to arouse a nation to the cheerful performance even of its obvious duty: this has been accomplished by Mr. Chase, under the embarrassment of repeated failures on the part of those who had in special charge to defend and promote our noble cause. The entire merit of this grand success can only be adequately estimated by considering how slight a mistake of judgment or want of faithful courage in conducting these momentous affairs would have thrown our finances into inextricable confusion. Our own experience immediately before the war, when there was no adequate conception of the extent of the trouble about to come upon us, shows how easily the public credit may be shaken or destroyed by incompetent or dishonest agents. In spite of envious detraction and interested opposition, these great and successful labors of the Secretary will remain an imperishable monument of his ability to conduct the most intricate affairs of government, in times of the most appalling danger and difficulty. He has undergone the severest tests to which a statesman was ever subjected; his genius and his great moral firmness have brought him out triumphant.

There are a few prominent points in the lucid report of the Secretary which constitute the great landmarks of his system. Adequate taxation was of necessity its basis; and, from the very beginning, Mr. Chase insisted upon a rigid resort to every available means of raising a revenue sufficient to strengthen the hands of the Government, and sustain its credit through all the vast operations which it was compelled to undertake. And now by reference to the actual figures, and by an analysis of the facts embodied in them, the Secretary shows that since the first year of the war, the taxes collected have paid all the ordinary peace expenditures together with the interest on the whole public debt, and beyond this have yielded a surplus which, had the war ended, might have been applied to the reduction of the debt. This sound and indispensable principle, beset with so many temptations and difficulties in time of civil commotion, is the very soul of the public credit; and the fearlessness with which the Secretary meets the contingency of prolonged war and the necessity of additional taxes, evinces his determination to strengthen and sustain the principle, rather than to abandon it under any possible circumstances. The enormous loans already so advantageously obtained, to say nothing of those additional ones which will probably be indispensable, could not have been negotiated on any reasonable terms without a firm adherence to this policy.

That part of Mr. Chase's financial system which is most questionable, and which affords his assailants a fulcrum for their attacks, is its interference with the State banks and with the currency which they have been supplying to the country. The issuance of Treasury notes in the form of a circulating medium, and with the qualities of a legal tender, has revolutionized the whole currency and exchanges of the country, and has given universal satisfaction to the people. But this popular judgment is by no means an unerring test of the wisdom or safety of such a measure. Its necessity, however, and its eminent success will forever stamp it as an expedient of great usefulness and value, especially as the Secretary has most judiciously arrested the system at that point where its unquestionable advantages still outweigh its acknowledged dangers and inconveniences. He informs us that these issues 'were wanted to fill the vacuum caused by the disappearance of coin, and to supply the additional demands created by the increased number and variety of payments;' and he adds: 'Congress believed that four hundred millions would suffice for these purposes, and therefore limited issues to that sum. The Secretary proposes no change of this limitation and places no reliance therefore on any increase of resources from increase of circulation. Additional loans in this mode would indeed almost certainly prove illusory; for diminished value could hardly fail to neutralize increased amount.'

In consequence of these issues, the average rate of interest on the whole public debt on the 1st of July last, was only 3.77 per centum, and on the 1st of October, 3.95 per centum.

It was to be expected that the banks, which have heretofore had an entire monopoly of the paper circulation, and of the large profits derived from its legitimate use, as well as from its disastrous and sometimes dishonest irregularities, would not very cordially receive the system which is destined to supersede their present organization entirely. The Secretary justly exults in the advantages of the sound and uniform circulation which he has afforded in all parts of the country. And as to the depreciation of the Treasury notes in comparison with gold, he reasons, with great force and truth, that the greater part of it is attributable to 'the large amount of bank notes yet in circulation,' remarking at the same time, that 'were these notes withdrawn from use, that much of the now very considerable difference between coin and United States notes would disappear.' Whether this belief of the Secretary be well founded or not, nothing can be more certain than the superiority of the Treasury notes to those of the mass of suspended banks, as they would have been after three years of the present war. It is frightful to think of the condition to which the currency would have been reduced at this time, if the Government had been guilty of the folly of conducting its immense operations in the suspended paper of irresponsible local banks. No one can doubt that the Treasury notes have been of immense service to the nation in its hour of trial; and if the limitation proposed by the Secretary shall be faithfully maintained, there need not be the slightest fear of any difficulty or discredit in the future. Upon the return of peace the whole issue will be easily absorbed and redeemed, either by the process of funding, or more gradually in the ordinary transactions of the Government.

On a kindred subject, that of the high prices at present prevailing, let Mr. Chase speak for himself. This statement is so direct and pertinent that nothing could well be added. He says:

'It is an error to suppose that the increase of prices is attributable wholly or in very large measure to this circulation. Had it been possible to borrow coin enough, and fast enough, for the disbursements of the war, almost if not altogether the same effects on prices would have been wrought. Such disbursements made in coin would have enriched fortunate contractors, stimulated lavish expenditures, and so inflated prices in the same way and nearly to the same extent as when made in notes. Prices, too, would have risen from other causes. The withdrawal from mechanical and agricultural occupations of hundreds of thousands of our best, strongest, and most active workers, in obedience to their country's summons to the field, would, under any system of currency, have increased the price of labor, and, by consequence, the price of the products of labor,' &c.

It is impossible to deny the force of this statement; and upon the whole we must acknowledge that most of the evils which have been attributed to the financial policy of the Government were inherent in the very nature of the situation, and would have developed themselves, more or less, under any system which could have been adopted. It is very obvious that they might have been greatly aggravated by slight changes; but it is not easy to see how they could have been more skilfully met and parried than by the measures which have actually yielded such brilliant results.

The most signal triumph of Mr. Chase's whole system of finance is to be found in the truly marvellous success of his favorite five-twenty bonds. Even at the present time the public enthusiasm for these securities seems to be unabated, and it is more than probable that the whole amount authorized to be issued will be taken up quite as rapidly as the bonds can be prepared or as the money may be required.

Not without good reason does the Secretary attribute the 'faith' thus shown by the people 'in the securities of the Government,' to his national banking law and the prospective establishment of a currency 'secured by a pledge of national bonds,' and destined at no distant day to 'take the place of the heterogeneous corporate currency which has hitherto filled the channels of circulation.' The idea of thus making tributary to the Government in its present emergency the whole banking capital of the country, or at least so much of it as may be employed in furnishing a paper circulation for commercial transactions, was as bold and magnificent as it has proved successful. Nothing less than the national credit is sufficiently solid and enduring to be the basis of a paper currency throughout the vast extent of our country. It is eminently fit that this perfect solidarity of the central government with those who furnish paper money for the people of every locality, should be required and maintained on a proper basis. But the currency thus provided is not liable to any of the objections properly urged against a paper circulation issued by the Government itself; it is issued by individuals or companies, and secured only by such national stocks as have been created in the necessary operations of the nation itself. The system does not constitute a national bank or banks in the sense of that term as heretofore used in our history. It does nothing more than assume that indispensable control over the long-neglected currency of the country which is at once the privilege and the duty of the National Government. It has authority to pronounce the supreme law among all the States; and if there be any subject of legislation requiring the unity to be derived from the exercise of such authority, it is, above everything else, that common medium of exchange which measures and regulates the countless daily commercial transactions of our immense territory. The system involves no participation by the Government in any banking operations; no partnership in any possible speculations, great or small; no interference, direct or indirect, with the legitimate business of the country: it is only a wise and efficient device, by which the Government assures to the people the soundness of the paper which may be imposed upon them for money.

The greatest merit of the scheme consists in the fact that it is intended to supersede that irregular and unsatisfactory system of banking which is based on a similar pledge of the credit of the several States. It is said to be hostile to the existing banks; but it is only so in so far as it requires a change of the basis of their credit from State to National securities. The measure was not conceived in any unfriendly spirit toward those institutions. It was necessary for the National Government to assert its own superiority, and thus to strengthen itself, at the same time that it sought to protect the people by securing them a uniform currency and equable exchanges.

Some murmurs of opposition have been heard from a quarter well understood; but the good sense of the people, and, we hope, of the holders of State bonds themselves, seems to have quickly suppressed these complaints. A war of the State banks on the Government, at this time and on this ground, might well be deplored; but the issue would not be doubtful. Mr. Chase occupies the vantage ground, and he would be victorious over these, as the country is destined to be over all other enemies.

At no other time could so fundamental a change in our system of currency have been proposed with the slightest chance of success; and, upon the whole, it was a grand and happy conception, in the midst of this tremendous war, to make its gigantic fiscal necessities contribute to the permanent uniformity of the currency and of the domestic exchanges. For this great measure is no temporary expedient. Its success is bound up with the stability of the Government; and if this endures, the good effects of the new system will be felt and appreciated in future years, long after the unhappy convulsion which gave it birth shall have passed away. It will serve to smooth the path from horrid war to peace, and to hasten the return of national prosperity; and when experience shall have fully perfected its organization, it may well be expected, by the generality of its operation and its great momentum, to act as the great natural regulator of enterprise and business in our country.

If these grand achievements in finance have had so important an influence in sustaining the war for the Union, it is not likely they will fail to constitute a large element in controlling the political events of the immediate future. Their author is well known to entertain the soundest views in reference to the thoroughness of the measures necessary to restore harmony in the Union, without being of that extreme and impracticable school whose policy would render union uncertain or impossible; and if a ripe experience in public affairs and the most brilliant success in transactions of great delicacy and difficulty, as well as of the most vital importance to the triumph of our arms, are of any value, they cannot be without their due and proper weight in the crisis which is fast approaching.

The election of next fall will take place under circumstances dangerous to the stability of our institutions, and trying to the virtue and wisdom of the American people. We are compelled to undergo that great trial, either in the midst of a mighty civil war, or in the confusion and uncertainty of its recent close, with the legacy of all its tremendous difficulties to adjust and settle. Even in quiet times, the Presidential election is an event of deep significance in our political history; but at such times, the ordinary stream of affairs will flow on quietly in spite of many obstructions; and even the errors and follies of the people consequent on the intrigues of politicians and the strife of parties, are not then likely to be fatal to the public security. In the midst of the tempest, however, or even in the rough sea, where the subsiding winds have left us crippled and exhausted, and far away from our true course, we have need of all the skill, experience, integrity, and wisdom which it is possible to call into the service of the country. But it is the skill and experience of the statesman, not of the warrior, which the occasion requires. To our great and successful generals, the gratitude of the people will be unbounded; and it will be exhibited in every noble form of expression and action becoming a just and generous nation. But civil station is not the appropriate reward of military services, except in rare cases, when capacity and fitness for its duties have been fully established. To conduct a great campaign and to gain important victories is evidence of great ability in achieving physical results by the organized agency and force of armies; it does not necessarily follow that the great general is an able statesman or a safe counsellor in the cabinet or in the legislative assembly. The functions to be performed in the two cases are wholly dissimilar, if not actually opposite in nature. War is the reign of force, and is essentially arbitrary in its decisions and violent in its mode of enforcing them: civil government, on the other hand, is the embodiment of law, and it ought to be the perfection of reason; its instrumentalities are eminently peaceful and antagonistic to all violence.

In times like the present, there is always a tendency to appropriate the popularity of some great and patriotic soldier, and make it available for the promotion of personal or party ends. Success in that sinister policy will no doubt often prove to be only an aggravation of ordinary party strategy, by which the vital questions of capacity and fitness are made subordinate to that of availability. We have in our history too many instances of such intrigues and their dangerous consequences, to admit of their success at the present time, though they come in the seductive form of military glory. The degenerate system of party strategy culminated seven years ago in the election of James Buchanan. In pursuance of the secret and treacherous preparations for the present infamous rebellion, the people were ignorantly and blindly led by cunning intrigue into that fatal mistake; but it was not less the circumstances of the tunes and the sinister combination of parties, than the weakness and wickedness of the man chosen, which gave him the immense power for mischief which he wielded against his country. The complications of the approaching crisis will not be less controlling in their power to bring about the ruin or the restoration of the republic. In the uncertain contingencies and possible combinations of opinion and interest destined to grow out of the immediate future, no man can foresee what dangers and difficulties will arise. The only path of safety lies in the straight line of consistent action; avoiding sinister expedients and untried men; despising the arts of the demagogue, when they present themselves in the most specious of all forms, that of using military success as the pretext for ambitious designs; and doing justice to the great soldier, as a soldier, according to the value of his achievements, not forgetting that 'peace hath her victories not less renowned than those of war,' and that the faithful and able statesman cannot be overlooked and set aside amid the glare of arms, without danger to the best interests of the republic.