New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1862-12-06

! the LIST of November, fob2, Mt IL to ~ cents A
comparison between the prices OF hay, beef, and
some other staplcs of domestic produce nj tie two
dates exhibits similar conditions OF actual depres-
sion in price or moderate rise.
THirdiy. Il is, perhaps, still more conclusive
against the theory Of great redundancy that, Oil the
lJh day Of October when tho aggregate actual CIR
culatlon national aud corporate, was abont 500,
0Oo, 600, the premium on gold was ~; wLe.eas on
the 29th day OF November, when the circulation had
liDcrensed 6y more than millions, the premium Oil
gold was - TO 80 per cent.
Federal aal Bank Calculation.
But ii the fact OF considerable redundancy in cir
culaion be conceded, 1t by 10 mssns follows that II
is the circulation Of United States notes which u
redundant.
u must be- remembered that the law confine.
national payments ard receipts TO coin and notes oil
the United States Officers Of tho treasury, officers
of the army and navy, ali officers OF all depart
memts must observe and enforce this law. bor al
payments TO be made Ia behalf OF tho United dtesi
IN care OF inability to obtain coin, United States
notes must be issued. 1t is, indeed, the duty Of
the Legislature ~ see that The pufcuasiog power Of
these notes kept nearly Ia possible equal 10 NC
purchasing power which gold would have had II
specie pay Icns bad been malnlalneai biI the lssne
and NE VI the notes Is unavoidable, ana tue HoV-
eminent can resort 10 borrowing only when the
iasue has become sufficiently large TO warrant JUS.
expectation aat loans VI tue Lo,cs can De had from
those who hold or OBTAIN then at rates ot less
adyalt agcoHs than toee OF com i0ans before huS-
TensIon. The difficulty which tie tSEers OF me
recent loan Of Sl3 6l5 40 found III obtaining Lmted
States notes with which to meet tueir engagements
to he Treasury il very instructive on The head.
IL ,oInte, indeed, directly to the conclusion tha'
louls Of United States notes, IN sufficient amounts
to meet tie disbursements Of tho government,
couil not now be obtained Ut rates which due
re gard TO the interests Of tue taxpayers would per-
mis- the Secretary to accept. Whatever may be
taid o. the ag rIgate circulation It Cannot tuen, DC
fucCe.siully mai claimed that the circulation Of
United states notes i. excessive. When extended
10 the limls authorized by exsimg laws, II Will be
no larees Than the wants q the people and Tie
Government impe.atiyely demand. .
/ II iLere be u considerable redundancy then-f
there boz cousdcra real depreciation OF thc ca
culouon--which Is by 10 means scInitted--what
has caused Tie II .andaucy and tue depreciation
Iuo cause Of all that exists Is easily found IA the
statements Of tie banking corporations. TIE cir
cua. ion of corporate notes increased during the
year ending on lie let Of November, 1907 IRON
Sl3J. ,UOUio $40. 10000 During ihe came Ii!5e
tie vor!i OF deposi.s which answer very many OF
tle purposes OF circulation, bad swellcd from
Sol O.0O00 % 5i4OOJ.O0O. The greater portion
~ ilis increase took place wi.in tho last Ssycn
months.
Iae augmentation Of deposits always accompanies
iucr,ite ot circulation. Together they stimulate
loans aud sre, IL turn stimulated by tie desire OF
tie iuiercst derived lrOM loans As might have
been anticipated loans increased though not equal
IT, with the circulation and deposits. From soOI, =
CoO 900 on tho lst day Of November 1861, they had
crown TO sou, 10000 on The lst day OF November,
IoD-.
Here i. an obviou. and sufficient explanation of
whatever undue expansion may lave Iahen place.
Tho Secretary hls srcgdy expressed the opiaion that
tie circulation is not greatly redundant and that DO
considerable drprt cation OF eurr,ncy has actually
occurred. lie thInke II sufficiently proved, hOwCy-
En- that whatever there may Of either IN fairly At
a. L. United Mates Notes
bat o. The Increase VI Bank circulation ana deposits.
4 II - be obtesNed tlat no law compelled and 10
public Lsccr'iiy required any cniarscn ent OF Tie
vol flo Of currency " the Banks. GA tho con rary,
iherc arc some OF tie States positive euactme nts
by wlich the ircrr5s Of circulation during sUspen
l4Oa is prohibited, ana tie principle en- bodied In
them u obviously Just that we.l-managed institu-
lions when Obliged TO suspend, almosL invariably,
without ihs cceitf4ut Of an law, reduce tneir car
culati0n Instead of augmeuting II. In obedience 70
iii, priscpe, a reduction Of Bank circulation
aally took place after the suspension IN December.
IL was Only when United states Notes having been
made lsBnl tender, were diverted from their legi /
mate use az currency and made the tasis Of Bank
circulation, that The great increase Of the latter be-
gan. 1t was purely voluntary prompted doubt
lctr, by The desire Of extending accommodations %
Di,iress well es BY tie expectation OF ircht No
practical .inii, moon this increase has rs yet been
proposed by the par,ie, interested II II.
Tie Secretary Las already shown that TIE case wa
iar otherwise vii. the circulation ~ United States
notes. 4 condition had be,L created ly The slspeu-
sion which made losls OF coin imp0.sllle. Loans o.
CORPORATE notes, OIL leciouGlle IN Themselves, were
positively prohibited hy law not likely 70 be re-
peaied Iue extension o. tie United States noe
circulation until Efficient in amount 20 enable the
SECRETARY 10 optsiu 10 from holders by way OF loans
was equally inevitable. 4 practical limi. on s in-
crease IS Imposed by ihs JIdc.0us legislation OF
Congress- which makes the notes receivable Tor
loans and requires that tho interes, on bonds for
loAn- SHALL he paid IN coin.
Under tAetc circumstance, the path Of wisdom and
du;y seems very clear. T. leads 90 the support of
Uuitoi States note circulation and 10 t.o reduction
Of me bank note circulation. A comparatively suull
reduction # tue latter wili allow ample room for
ne whole increase OF the former authorized by eX-
ising lave; aud ss the reduction proceeds the IN
crease may DO extended, never however, passing
The point which admits tho negotiation OF loans at
reasonable rates. The Secretary Las heretofore al
yised the imposing OF n moderate tax On corporate
circulation, AMI now reuews the recommendation
IA The beet means OF reduction and gradual sabttI-
uor. Such "a tx involves no hardshIpg. Notes
circulating ~ money cost nothing beyond the eX-
peuse OF production and supervision, and yet form
highly accumulaiiye species Of property. The ur-
cessitIts OF tie war have caused the taxation OF
almost al iorms Of value. Gun there be IL sound
cor exemrtng that which costs the proprietor
least and brings him most
a Uniform Circulation.
II may lie properly added that this desirable sub
s,tutiou Of circulation, uuiioiu IN description and
value, for a circulation varying widely IN both, may,
perhaps, be more easily and bcrcA'islly Effected
now q an AZ any Other iue. TIE circulation Of
United States Notes may greatly facilitate lie pay
nents to The Banks tAIOHgh which tleir own notes
must De Withdrawn; ANA thus not only protect the
community from the mcony euieucer. bat the BAnds
rom ihc Jsses which might otherwise attend re-
auction
II may also DO added that when tho substitution
hall lave been ucrOmp shed, nud, perhaps, Ii cr-
eumsiances favor no az earlier periou, pas mens IN
specie OF United States Notes may oe resumed with
- cof ma les injury 10 business thau would At-
tend like resumption in payment OF corporate
notes. with comparatively uiyh fscuhce, tie