The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1865-12-12

{ ssess ~ 49, r ~ szs1sss@fSs
hwill b noticed By .this easement that
Ia honk notn ainnn2nGjnn = - lai1aa $780,.
iincfs1ssd from $61 ,S1lyoO6 % $149, 186, $40
between tie 1T ofJanfesHo0, and the LIT
Of Jauuafy, 1887 Id Nhsc6 later year tha
tereas financial collapse took place; fell from
$l49. 1S5, $50 IN 1881, to r., to4 go, in l84S.
and 20 = 50, rs, 6e09n theArst of Janu--
sry, 1867, in which year the next severe crisis
loscaIed; fAaKng during that year TO $lbe. 2Os,
s44f and rising to $2o71o2 600 on the frrt 81 q
January 1860.
/ On the fist Of January Of the memorable
1year 1887, fiie baAk hotes circSlaticn 81 the
United States was $149, 1876, 800, the deposits
were eaa7,eQ7, 900, the ylnM 1525, 115, O0p4
I'm January, 1857, the year OF the next great
/ crisis. the circulation Was $2ll, 1892, the
tdeposits we're $3.50, 351 600, the loans, 1884
AT. 900. There are no statistics to exhibit
the amoastdf epeGS 6Ne2y in circulation in
those periods, but it would be q liberal esti-
mate to put it at $50, oOo, 900 for 1881 and
$50, 0OO, 900 for 1851 Y. ~
These were yearxuf great imitation, the eff
fetts of which have been already referred to
the reynlsion of 1887, mol only producing
I
tration which continued until l843, at the
commencement Of Witch year the bank note
circulation amounted only to $58, 1854 600, de-
tpos;ts to $50, 1es, 90, loans S254, 544.0OO-
Aour having declined in New York from $40
De ner barrel on the first of January; 1887,
to 81 90 on the first of January, lo43,
and other articles in seoo' the same proper
ton.
The reaction of 1857 was severe, but for
the reason before stated, less disastrous and
protracted.
On the 30th Of SAnaApber last, the deposits
Of the National Banks alone amounted to
] $544, $50, 1893; their Demonstrating their
4 national securities Is loan to the Govern
ment-to SOFA. O45. $40; both of which items
must have been increased during the month Of
October; while on the 3lst Of that month, the
lcirculat,on. bank and national, had reached
the startling amount ofupwards OF S7o0.ooo'
0OO Nothing beyond this statement is re-
ouired to exhibit the present imitation Or to
explain the causes Of the current fnd advaf-
cling prices. If disasters followed the expan-
sions of 1887 and 1857, what must be the con-
sequences of thamresent expansions unless
speedily checked and reduced!
II is undoubtedly true that trade is carried
on much more largely for cash than was ever
the case previous 10 1861, and that there is a
much greater proper demand for money than
There would be if sales were made as hereto
fore. on credit 1t Salso true that there is a
larger demand than formerly for money ON
the part Of manufacturers for the payment OF
loperatiyes. But making the most liberal
allowances for thesinereased wholesome de-
mand arising from these causes, and from the
I advance of the country in business and popn-
lation. il is apparesE from the foregoing state
ments, il the advance in prices did not estab-
fish the fact, that the circulating medium OF
the country is altogether excessive
Before concluding his remarks upon this
subject il maE be proper for the Secretary,
even at the expense OF repetition. TO notice
briefly some ofthe popular and plausible objec-
tons to reduction OF the currency.
PrArs.SLE OBJECTIONS ANSWERED..
First. Tkxf. by reducing prices ii would
operate iniuriouslyS if not disastrousiy. upon
trade, and be 4uitslikely to precipitate finan-
cial crisis.
To this it may be replied. ,hs. prices OF ar
ticles of indispensable necessity are already
so hieh Is to be severely oppressive to conssl
mers, especiaIlyee persons OF fixed and mod
crate incomes and to the poorer classes Not
only do the interests, bnt the absolute necessi
ties Of the masses require that the prices OF
articles needed for their use should decline.
Nor is there any reason TO apprehsnd, ~
any policy that Congress may adopt. SO rapid
deduction of prices rs TO produce very
serious embarrassment to trade. The Gov
eminent currency can only. TO any considera-
BILE extent, be withdrawn by sale of bonds.
and the demand for bonds will be SO affected
by the state Of the market that rapid con
traction will be difficult, il not impossible,
even if il were desirable. There is more
danger to be apprehended from the inability
of the Government TO reduce IFS circulation
/, rapidly enough, than from too rapid redae.
ton oft. 1t is, in part, to prevent financial
crisis, that is certain to come wlthoutit, that
the Secretary recommends contraction. Pm
ces are daily advancing. The longer cohtr1c-
ton is deferred. the greater must the fall ERIN
taaHp be. and the more serious ,rU be its CON
sequences. II is not expected that re'
turn to specie payments Will bring prices back
I to the standards of former years The great
increase of the precious metals and high taxes
will prevent this but this consideration makes
il the more important that all improper and
unnecessary influences in this direction should
be removed
Again, it is urged that contraction ofthe
currency would reduce the public revenues.
Ii is possible that this might be the imme-
date effect, but it would be temporary only.
III, public revenues depend upon the develop
ment of our national resources, upon our sur.
plus productions; ia other words, upon labor.
The revenues derived from transactions based
upon false standard Of value, or from inter
ests that can only flourish in speculative
times. are not these upon which reliance can
be placed for maaut1shing the public credit.
What a healthyaad reliable business requires
is a stable basis. This It cannot have az long
an the country & inflicted rith an inconratibie
currency, the. value Of which, as well as the
value of the vast property which is measured
by it, is fuctuating and unreliable, and may
be in no small degree controlled by speeula-
tive combinations.
1t is also urged that the proposed policy
would endanger the public credit, by prevent
ing funding and LIT it would compel the
Government and the people, who are in debt,
to pay in . dearer currency than that in which
! their debts were Contracted.
The Secretary is unable to perceive any
substantial gropR for this objection. He
cannot understand how the process offunding
is likely to be- aided by the continuance OF
prices on their present high level, or how the
credit OF the Government is to be restored by
the perpetustion ofan irredeemaLle currency,
especially as that currency consists largely Of
its own notes. While it is hoped that early
provision will be made for the Commencement
Of the reduction of the national debt, an early
payment of it is not anticipated. Nor is itun
derstood that those who are apprehepsiye Of