Daily national Republican. [volume] (Washington, D.C.) 1862-1866, 1862-12-06

ickh btenuhfu OF vhiue, Roiu pecaho ~ e'ue,oo
merchandise, subject TO The ordinary fuctuation'
Of supply and demand, and to the extraordinsr,
fluctuations Of mere speculation. The ignoran
fears of foreign investors in national and stat
bonds and other American securities, and th'
| timid alarms ofnumerous nervous individuals II
our own country, prompted large sacrifices npor
evidences of public and corporate Indebtedness
in our markets, and large purchases Of coin fol
remittance abroad or boarding at home. Taking
advantage of these and other circumstance
tending to an advance Of gold, spectators EN-
ployed all the arts of the market to stimulat,
that tendency and carry II to the highest point
This point was reached on the 18th day Of Octo
Der. Gold sold In the market at a premium o.
81 per cent.
or even In greatest part, to the increase Of the
currency, Is established beyond reasonable
doubt by considerations now to be stated.
First; The whole quantity of circulation did
not, at the time, greatly, If at all, exceed the
legitimate demands Of payments. On the Isl
day OF November, 1861, the circulation Of Uni
ted States notes, including credits to disbursing
officers and to the Treasurer Of the United
States, was SIS, ,140,00 On the 1st day Of No.
vember, 1862, 1t was, with like inclusons,
s2l0, ,104 900. OF corporate notes, on the LIST
of November, 1881, the circulation In the loyal
States was, according to the best estimates,
$3.50, ,0O0, 900; on the LIST of November, 1862, Il
was s167. .000, 900. The coin in circulation, in.
cluding the coin in banks, was probably not
less, on the LIST of November, 1861, than s2l0,-
100000. On the list of November, 1862, the
coin had been practically demonetized and with.
drawn from use as currency, or as q basis for
currency, and is therefore not estimated. The
aggregate circulation of the loyal States, there.
FORE was, at the first date, 1855, lac, 900; and
at the second, only 1877 ,104, 900.
Secondly The whole, or nearly the whole,
inn in ha pf ha xrh trb
has taken place, was, 1t is believed, legitimately
demanded by the changed condition ofthe coun.
| try In the year between the two dates. The ac.
| tivity In business which, at the close of that
year, had taken the place Of the general stag.
nation which marked its beginning, and the
military and naval preparations and movements
which had vastly augmented the number and
amounts OF payments to be made In money,
have, 1t is believed, legitimately demanded near.
| ly or quite the whole of It.
| That such Is the case may be reasonably In.
ferred from the fact that the prices of many OF
the most important articles of consumption
have declined or not materially advanced during
the year. Wheat, quoted at 81 IS to 81 IS pei
bushel on the 1st of November, 1861, was quo.
ted at 81 As to 81 so on the Isl of November
1862. Prime mess pork, on the LIST of Novem.
Der, 1861, was quoted at SIS TO sl5 so per bar.
rel, and on the LIST of November, 1862, at SIC sc
| to Sl3. Corn sold ON the LIST of November
/ 1861, at 62 to GO cents per bushe, and on the
/ lst of November, 1862, at II to 80 ceuts. \
comparison between the prices of hay, beef, and
some other staples of domestic produce al the
two dates, exhibit similar conditions of actual
depression in price or moderate rise.
Thirdly It is, perhaps, still more conclusive
/ against the theory of great redundancy that, on
the 18th day Of October, when the aggreg actual
| circulation, national and corporate, was about
$500, COO 900, the premium on gold was 35s; where
as, on the 2sth day OF November, when the circu'
lation had increased by more than twenty millions
| the premium on gold was - TO 50 per cent
But II the fact of considerable redundancy Ia cir.
culatiOn he conceded, II by no means follows that
u Is The circulation oi United States notes which
! Is redundant.
| II must be remembered that the law confines M.
| tional payments and receipts TO coin and notes o
the United States Officers OF the treasury, officer
oil The army and navy, all officers Of all depart
ments, must observe and enforce this law. For all
payments TO be made in behalf of the UutCd States
In case OF inability to obtain coin, United States
notes mast be issued. IL is indeed, the duty Of tn.
| legislature to see that the purchasing power oi
these notes Is Kept as nearly as possible equal 10
had II specie payments had been maintained
but the issue and use OF the notes Is uuGt 6tdsie
and the Government can resort TO borrowing only
when the issue has become sufficiently large to
warrant Just expectation that loans OF the notes
can be had from those who hold or can obtain
them az rates not less advantageous than those oi
coin loans before suspension. The difficulty which
the takers OF the recent loan Of Sl36s, i5O found
in obtaining United States notes with which to
meet their engagements to the treasury L. very In
slructve on this head 1t points, indeed, directly
10 the conclusion that loans of United States notes
in sufficient amounts 10 meet the disbursements ol
| the Government, could not now be obtained al
rates which due regard TO the interests of the
Taxpayers would permit the Secretary to accept
/ Whatever may be said of the aggregate circula.
| ton, II cannot, then be successfully maintained
that the circulation OF United States notes Is eX.
cessive. When extended TO the limits authorized
by existing laws, II will be larger than the wants
Of the people and the Government imperstively
demand.
If There be a considerable redundancy then II
there be considerable real depreciation of the cir
culation-which Is by no means admitted-what
has caused the redundancy and the depreciation
The OF all that exists Is easily found in the
| statements OF the banking corporations, The cir.
culation of corporate notes Increased during the
year ending on the lst OF November, 1862, from
Sl3O,OOO 600 TO 6700O,OOO. During the same time
| the volume of deposits, which answer very many
of the purposes OF circulation, had swelled from
s26i 600 900 TO s34tOoOOOo The greater portion OF
this increase took place within the last seven
months.
The augmentation OF deposits always aceompa.
MES increase Of circulation together they stimu'
sire OF the interest derived from loans. As might
have been anticipated, loans increased though not
equally, with the circulation and deposits. From
S6O ,0oo 900 on the LIST day OF November 1861 they
had grown to s6'IoOO,OOO on the LIST day Of Novem'
ber, 1862
| Here Is an obvious and sufficient explanation OF
whatever undue expansion may have taken place
| The Secretary has already expressed the opinion
that the circulation is not greatly redundant, and
that no considerable depreciation OF currency has
actually occurred. Hethinks 1t sufficiently proved
however, that whatever there may Of either Is fair
ly attributable not to the increase Of United States
notes, but to the increase OF bank circulation and
deposits.
II is TO be observed that no law compelled and
no public necessity required any enlargement OF
the volume of currency by the banks On the con
trary there are in some of the States positive en-.
actmrnts by which the increase OF circulation dur
Ing suspension IL prohibited; and the principle EN-
bodied In them Is so obviously Just that well-man
aged institutions, when Obliged to suspend almos
invariably, without the constraint Of any law re-
uuee their circulation instead of augmentng IT, IL
obedience 10 this principle, reduction OF bank
circulation actually took place after the suspen
sion IN December II was only when United Statei
notes, having been made a legal tender, were di
verted from their legitimate use as currency ant
made the basis OF bank circulation, that the great
Increase oi the latter began. II was purely volun
tary; prompted doubtless, by the desire OF extend
Ing accommodations to business as well as BY tn,
expectation of profit No practical limit upon thl
| increase mas hs yet been proposed by the parties
Interested in II,
The Secretary has already shown that the cas-,
was lar otherwise with the circulation OF unitet
states notes. condition had been created by tn,
suspension which made loans OF coin Impossible
Loans of corporate notes Objectionable in them
positively prohibited by law not likelI
TO be repealed. The extension of the United State
note circulation, until sufficient In amount to ena
Die the secretary to obtain II from holders bI
way OF loans, WAS equallNinevitable. A pFactica
limit on Its Increase Is imposed by the judlciou
legislation OF Congress, which makes the notes re
ceivable for loans and requires that the interes
On bonds for loans shall be paid in coin,
Under these circumstances, the path OF wisdom
and duty seems very clear, II esds TO the supper
ora United States note circulation, and to the re
duction oi the bank note circulation, A compare
lively small reduction of the latter will allow am
pie room for the whole incTeaaa nf the fnrmar ~,