Baltimore daily commercial. [volume] (Baltimore, Md.) 1865-1867, 1865-12-06

only remains. for the vlndlcatlon of its eXcelenC
and the perfection of its triumphs, that all powe
exercised for its preservation, but not eXpressl
granted BY the Constitution, be relinqushcd with tn
return of peace
that the immediate repeal of the legal-tender provi
slons of the acts referred to would be unwse bein
likely to affect injurousy the legitimate business
the country upon the prosperity of which depend tn
welfare of the people and the revenues which mr.
necessary for the maintenance Of the national credit
and unjust to the holders of the notes. he is of tn
opinion that not only these provisions but the act
also should be regarded only temporary, and tina
the work of retiring the notes which have been issue
under them should be commenced without delay AM
carefully and persistently continued until all are re
| tired.
In speaking of tho legal tender acts reference ha
! only been made to those which authorized the issu
OF United States notes. The interest bearing note
which are legal tender for their face yalue in
tepded TO be security rather than circulating me
dluIn and II would he neither injurious to the public
nor an act OF bad faith to the holders for Congress
declare that after their maturity, they shall oeaset
be legal tender, while such declaration would ait
| the Government in its efforts to retire them, and i
| therefore recommended.
| The rapdity with which the Government note;
can be withdrawn will depend upon the ability of the
Secretary to dispose of securities. The influences
prevent their too rapid withdrawal. The Secretary
however, believes that decided movement tow ard,
necessity but that 1t will speedily dissipatc the
apprehension which very generally exists, that the
effect of such policy must necessarily he to make
money scarce and to diminish the prosperity Of the
country.
1t is well established fact, which has not escaped
the attention Of all intelligent observers that the de-
mand for money increases tby OF an advance
OF prices with the supply and that this demand is
not unfrequenty most pressing when the volume OF
currency is the largest and imitation has reached the
eliminating point. Money being Improbable
article To hold, very little is withheld FROM active
use and in proportion to It's increase prices advance
on the other hand reduction of it reduces prices
and prices reduced the demand for it falls off;
50 that, paradoNica as 1t may seem, dimnution OF
the currency may in fact increase the supply oft.
Nor need there be any apprehension that a reduc-
ton OF the currency-unless 1t be violent OnewiIl
lnJurously affect real prosperity Labor is the great
source Of national wealth, and industry invariably
declines inflated currency. The value of money
depends upon the manner in which it is used If Il
stimulates productive industry, ii is benefit and
70 the extent only to which it does this is it benefit
If on the other hand il diminishes INDUSTRY and to
the extent to which it dimnshes it, il it an evil
Even in the form of the precious metals it may not
prove 10 be wealth to Il nation.
The idea that country Is necessarily rich in pro-
portion 70 the amount of gold Or silver which it pos
Sesses, is a common and natural, but an erroneous
one, while the opinion that real prosperity is adj
vanced by an increase of paper money beyond what
is absolutely needed n medium for exchanges of
real values, is totally fallaCous, that few men
entertain il whose Judgment is not cloudcd by the
peculiar financial atmosphere which an initiation is so
apt to produce.
An irredeemable paper currency may be necessi-
ty, but it scarcely fail if long continued. to be
calamity to people. Gold and silver the only
proper measure of value. They have been made so
by the tact agreement OF nations, and are the
sary regulator of trade, the medium by which baan-
ces are settled between different countries and he
tween sections of the same country. As universal
measure of value, they commercial necessity
The trade between different nations and between
sections of the same country is carried by an cx
change of commodities but isnever equally balanced
by them and unless credits b ing established the
movements OF com unerrlngiy Indicate on which side
the balance exists.
now and too generally do--moTe than they sell to
them, it is evident that balance Is thus created
which must either be settled in coin or continued
a debt.
That balances between nations should be promptly
paid is the dictate of wisdom, because by prompt
payment the adverse current is checked before the
debtor nation becomes seriously involved: while on
the other hand, If they are permitted TO accumulate
they may, when the day Of payment can no longer
be deferred prove not only disastrous to the debtor
but greatly disturb the business of the creditor nation
All serious embarrassment growing out of CONNER
cial intercourse between the people of different
nations results from failure in the prompt payment
of balances and the carrying forward OF these bal
anceS by extensions Of credits.
The well-knOwn laws of trade not only illustrates
the necessity Of prompt payment Of balances between
the United state: and i9iegn nations and between
necessity of having everywhere the same standard
OF value.
periods of expansion. Times OF the greatest oxpau-
sion and speculation in the United States have been,
indeed, when the banks were nominar paving specie.
The reports cites the results Of the expansions
in 1887 and 1851 and says that in both these instances
the expansions occurred while the business of the
country upon specie basis but it only nOmi
nally SO. false system Of credits had interviewed,
under which payments were deferred and specie a
measure Of value and regulator of trade was pract-
cally ignored. Everything moved smoothly and APP
paTently prosperousy as long as credits could be
tabli.hed and continued, but as soon as payments
demanded and specie was IN requistion dlstrust
commenced, and collapse ensued.
The present imitation following the suspension of
1861 is the result Of heavy expenditures by the Gov
eminent i'll the prosecution Of tho war and the in
PRODUCTION Of new measure Of value in the form of
United States and Treasury notes rs lawful money.
The country, q whole, notwithstanding the Tava-
ges Of the war. and the draft which has been made
upon labor is by It's greatly developed resources far
III advance i'll real wealth of whatlt was in 1851 when
the last severe financial crisis occurred.
The people are now comparatively free from debt;
the banks, with their secured circulation and large
investments in Government securities. although not
i'll an easy condition, and doubtless too much ex-
tended are ra nj Work hat nrodce fe e h the
ferred to. There Is an immense volume Of paper
money in circulati0n-under the influence Of which
prices, already enormously high, are steadily ad
be contracted if similar disasters would be avoided.
If the war could have been prosecuted on specie
basis there would doubtless have been considerable
advance in the prices of those articles which in
demand by the Government; but naSmuch rs in the
condition Of our political affairs extensive credits
could not have been established in Europe the
tendency in this direction would have been kept
within reasonable check by the outflow of coin to
other ma ions, which would have been the natural
result Of the advancing prices i'll the United States.
On basis OF paper money, for which there was no
outlet all articles needed for Immediate use of which
it became the measure of value, felt and responded
to the daily increase OF the currency so that rents
and the prices of most articles for which there has
been a demand. have BEEN with slight fluctuations
constantly advancing from the commencement of the
war and arc higher now, with gold at fory-seven per
cent. premium, than they were when it at
hundred and eighty-ive Even those which were
affected by the fall Of gold UPON the surrender OF the
Confederate armies, or by the increased supply or
diminished demand are advancing again to former if
not higher rates. The expansion has reached
such point as to be absolutely oppressive to large
portion Of the people while at the same time it is
diminishing labor and is becoming subvcrSiYo of good
There are no indications of real and permanent
prosperity in our large lmportalOns OF foreign fab
RIGS in the heavy operations at commercial
marts: IN the splendid fortunes reported to be made
by skitul manlpuatons 9t the gOld-room or the
stOckboard; evidences OF increasing wealth in the
facts that railroads and steamboats, are crowded with
passengers and hotels with guests that cities full
to overlooking, and rents and the prices OF the neces
Sares ofte, well as Injuries are daily advancing
All these things prove rather that foreign debt is
being created, that the number OF non producers Is
increasing and that productive industry is being
diminished There is no fact more manifest than
that the plethora of paper money is not only under
mining the morals of the people. by encouraging
waste and extr yaganee but II T. strknS at the root
of our material prosperity by diminishing labor.
The evil is not at present beyond the control of
legislation but it is daily increasing, and, if not
speedily checked, will at no distant day, cQIminate
remedy within the control of Congress- is, in the
opinion of tho Secretary to be found in the reduction
The paper circulation of the United States on the
3lst of October last, substantially follows:
l. United States notes and fractional .
>. Notes Of the National BanKs lS5
g. Notes of State Banks. including out
standing issues of State Banks con-
verified into National Banks..,.... 5000, 100
S704, 2ls, OBS. 90
The amount of notes furnished TO the National
Banks up to and including the Sst of October,
little over sos 600 but it is estimated that SO
$780, of these had not then been put into circulation.
In addition to the United States notes. there were
also outstanding So $4,000 five per cent. Treasury
notes, and Sl73Ul240 compound interest notes, OF
which it would, doubtless be safe to estimate that
| $50, 900 were in circulation Us currency,
From this statement, II appears that without IN
Guiding seven and threctenths notes, many of the
small denominations OF which were in circulation
money, and all of which tend in some measure to
swell the initiation, the paper money OF the country
amounted, on the 3ist Of October, to The sum OF
T73i 2lS SO which has been daily increased by the
notes since furnished to the National Banks, and is
likely to he still further increased by those TO which
they are entitled until the amount authorized by
law ($300000 1000 shall have been reached. subject to
such reduction ms be made by the withdrawal OF
| the notes of the State banks.
statement is given, showing that the bank note
circulation of the United States increased from Sol
2i 900 10 Sli9 1880 between the LIST Uf January
1890 and the LIST Of January, 1887, in which latter
year the great financial collapse took place; fell from
Sll9 lS5, $50 in 1851 to S5S,564O in 1913, and to
$500 the LIST of January, 1885, i'll which yeaT
the next crisis occurred falling during that
to Sl552S 344, and rising to S2O, lO2OO on the
| LIST OF January, 1860.
On the 30th of September last, the deposits Of the
National Banks alone amounted to SJ44 3O lf then
loans estimating their national securities as loan
| to the Governmen;-to S9l3 0i5, 62E both Of which
items must have increased during the month of Octo
ber while on the 3st of that month the circulation