Bedford inquirer. [volume] (Bedford, Pa.) 1857-1884, 1865-11-10
MecoLLocH ANp CONTRACTION.

ndiiSu as n Stek) IN the TlgnG u1FccdOu Ug LUG
whole country. We are not of the number
Of those who regard public debt as great
blessing, though we believe that it brings
with it some advantages as an Offset to the
evil, neither do we believe an inflated cur
rency desirable thing in finance. though
we believe there may be worse evils. The
unavoidable contingencies of great civil
war have entailed upon us an immense Ma
tiSnal debt and what is called an inflated
currency, and it is our business to make the
best Of the condition in which We find our
selves. We do not believe it possible to pay
our debt at present, though We all agree
upon making such disposition Of it as viii
enable us to pay it gradually. This IS every
where regarded as sensible view Of our
debt BY a sensible and practical people. We
hope to see as much practical common sense
exercised with regard to the inflated curren-
cy. We approve nf the Secretary's desire
to shape his policy in the direction of specie
payments, but we believe that reasonable
time must be taken to reach so desirable
condition Of our public finances, and if suffi
cient time Is not given we viii be brought
to such financial crisis and crash as viii do
US more pecuniary harm than the rebellion
itself The experience of all nations, in
every age, has shown that sudden contrac-
tions Of currency have always resulted in
financial ruin. If we are wise, we win not
reeklessly tread in the path that has always
brought disaster to other nations Let US
take calm and impartial look at the condi-
tion of our currency, and compare it with
that before the war, and then Judge if the
currency is to blamed for all the evils laid to
its charge According to the Secretary of
the Treasury statement Of October 30th,
our currency circulation is in round numbers,
thus enumerated, legal tenders; $633, GOO, 900;
national banks sos, ,000, 600; State banks,
sec, 600; Of this $I73, 100000 are COM
pound interest notes and are practically out
of circulation, same as funded debt, leaving
for circulation $724, ,000,0 900; to this might
be added the remainder of the National cur
rency authorized, $67 200, 600, but as an off
set there are 60,0O0,00O of State currency,
which at the rate it has been decreasing
10000, 900 per month, since April last viii
all be Withdrawn in six months, sooner than
the national currency is likely to be issued,
and when it is issued, it will only give an IN
crease Of seven millions in SIX months, while
in the last month, according to the report,
the circulation of legal tenders has been con-
tracted 10000, 900.
Now let uslook how we stood in 1860, with
low prices, business dull and markets flooded
with goods Our state bank circulation was
500, 100000, the specie in circulation may
be set down at about half as much more,
making an aggregate of $310, 5000, 600; our
increase demanded by increased business
from 1850 to 1860 was about 33 per cent,
allowing the same rate of increase during
the last FIVE years, without any allowance for
the increased cost of everything, because of
its scarcity, would require II per cent.
additional or 81, T50, 900, making in the ag-
gregate 1862, 900, 900 in round numbers, or
precisely half Of our present circulation.
Notwithstanding it is the universal rule to
blame the currency alone forhigh prices, we
never did nor do we now believe this to be
the case. There is no rule better establish
ed than that the price of an article is regu-
lated entirely by the supply and demand.
When the supply is in excess, the prices fall,
whom 1t Is short, the prizes increase, in 1860
we had an abundance of everything, in ex-
cess of demand, and prices were low. -Four
years of war first took away the labor of the
producer and then began to drain the reser-
we'd supply, until to-day, to large extent, al
most every article In the markets is in de-
mand beyond the supply, and there is nore-
serve to draw upon, labor, in its return from
the army, has not had time to adjust itself
for supplying the demand; taxes must be
raised from the production of the country,
and at the same time, the whole South swept
more bare than ourselves, has come into the
depleted market to buy. There never was
recorded In history such a combination of
circumstances to produce high prices, yet
people Of acknowledged intelligence blindly
cry out against the currency. In justifca-
ton of such belief we may also cite the fact
that though gold has fallen from 200 to l46,
yet prices are higher to-day than when gold
was at its highest figure. Now if the cur
rency is 70 blame, according to the logic ofits
defamers in this case, it increased prices and
a further reduction in the price of gold
would enhance prices; the logic is as good in
one case as the other.
Now it requires but small amount of in
telligence to understand, that when every
thing is doubled in price. it requires twice
the amount of circulating medium to trans
act the same business as before. The busi-
ness of the northern states is now vastly in
excess Of that in 1860, both in quantity and
value, and viii more than balance the def
cheney in the South.
We believe that rapid contraction of our
currency would result in wide spread disas-
ter as it always has done wherever tried.
The contraction Of the currency in England
after the war of 1912 and 1915 to the extent
Of {, 200, 600 sterling or $50, 100000 per year,
brought such ruin, wretchedness and misery
upon the country as had never before been
equalled. How much greater strain we can
bear remains to be seen. The contraction
Of legal tenders last month was 10000, 900,
and at the average of the last six months
IL % IL L n A a No -.