The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1865-12-02
The Currency.

| this subject, but with your permisslon' M'
Editor, will say few words, in reply to the az
ytice of "R. W." ~ -
| We agree in one thing, money is ta9ns' anu
| we also agree that goods, wares, anu INC,
i disc got h;gh some three years ago anu have
| been b;oh ever since; now, let the money
o,,,ot ao,.in,,o t;obt for three years, TOR
which length of time mercnanuI. - .oen
high. and / will guarantee tnae iish prices'
| like the inebriate, will have a IAN
| Your correspondent argues tnaS Inc curren-
| .ot rraasurably diminished, but is about
- inflated as ever, and that high prices We're
.susel by this inflated currency. Yeti takes
10 more money to-day, to move thousand
barrels of flour, Ito use his expressionJ than
it did six months or year ago; yet money
was plenty then, and is very close now. i
What reason can there be, then, for tight
money market. unless it be contraction Of
the currency?
As to funding of the $50OO0,OO0 of COM
Mound interest notes, it makes no practical
difference whether they were withdrawn from
circulation by the Secretary of the Treasury,
or by banks and individuals. The S50,0G0O00,
were in circulation, and have been withdrawn;
thereby contracting the circulating Medium
S50000,000. "R. W." is mistaken in saying
Jhat the latest date of those notes was June
30, 1864. 1 think he will find if he will ex-
anime apackage of them, some of them dated
as late as September 1854. have myself re-
ceived from a banker such notes dated in Au-
gust 1854, paid out by, the banker at their
ACE, like other bank notes, as well as others
lated in June, and this as late as November
1864, nearly five months after the issue of
June 80, 1864. 1t is fact that they were in
circulation, and came into the possession of
banks, like other bank notes in the ordinary
course of business, and they have held portions
Of them for this reason: our national banks
are obliged to keep on hand one fifth or TWEEN
ty per cent. of the amount of capital stock,
IN greenbacls or legal tender notes and they
now hold portion of these six per cents, be-
cause they are drawing interest, while green
backs are not. sssst 5sTssDssgD
differ from "R W." as to the amount of
currency in circulation, which he places at
S700,000,000f To illustrate my, idea, I will
take for example the S200,000000 of National
currency already issued to the banks now by
the first act, organizing National banks, all
such banks without regard to the amount of
their capital stock, were allowed 80 per cent.
of that amount in national currency. But
this act was SO amended at the last session Of
Congress, as to allow 80 per cent. of national
currency to all banks with capital of $780,
900 or less, but only 80 per cent. to banks with
acapital stock from S500,0O0 to $1,OO0,O00.-
Those having capital of from $1,0O0,O00 to
S3,OOO,00O, are allowed Is per cent, and those
whose capital exceeds $3,000,O00 are allowed
so per cent of such capital in circulating
notes. H-tI. auI Is $3.50
Now as large number of the banks were
organized under the amended act, whose capt..
tai exceeded 100000; it would be safe to say
that the banks have received not exceeding
eighty-fve per cent of their capital stock, in
national currency, or in other words, the
banks which have received S200,Oo0,0O0 ma
tional currency, must have had a capital stock
of about $240,000,000, and as they are re-
quired to keep one fifth of the last named
amount in their vaults, in legal tender notes,
the amount Of currency must be diminished
to that extent, viz: $4S00O,0O0; so that while
there has been an issue of S2oO.O0O,COO, in ma
tional currency, $4S,000,000, of that amount
has to be held by the banks i'll legal tender
notes, and the circulation is practically but
$152000,O00. The amount of currency in
circulation, therefore, is nearer 100000 900,
| now, than $700,000000. A paper dollar, at
the late ruling rates of gold, is worth about
sixty -seven cents in specie, that is $1,000 in
currency will buy $670 in gold. But even put
ting the paper circulation at SG5O,OOO,OOO, and
a paper dollar worth sixty-seven cents, this
5650,00O000 would buy $435500,00O in gold
i.eslth reduction ofthe currency, to the amount
Of the difference between the two values, viz
| s214,5oo,O00 would restore us to specie ba-
is. EifHhB4 f4E FHfli'
Now the question is: How shall this be
lone? The withdrawal of $50,000,O0O of
State circulation viii accomplish it in part for
that must be withdrawn at all events, but the
great principle which mderles the whole
matter is, a reduction of the expenses of the
government, which is paying nearly half a
million day for interest on the public debit
Perhaps two thirds as much more for the ex-
penses of the army and navy, and some $780,
l0O,O0Oor S7oOOO,oOO year more for the civ
il and diplomatic bill, which amounts to near
ly as much as the receipts from customs, and
theinternal revenue. Now to the extent that
| the government can reduce its expenses. to
that extent can 1t reduce the paper circulation
andadvance to aresumptionofspecie payments
There are other methods but will not refer
to them now, as this seems to lie at the root of
the matter. 1t a. -.,f ..t,' .o4.iI
One word as to the allusion TO the pump by
"R. W." All the natural external pressure of
| the air in the world would not force the water
| from the well to the surface. Now if have
furnished, as "R. W." suggests the boy to "wag
the pump handle" to pump little water out
of the well of Truth, even on secondary prin-
| ciples, am content q w e. HIT.
--t5 70 Another Convention. ;ts.I