The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1865-10-30
FINANCIAL AND COMMERCIAL.

rencv von,d no funded during the present year The
sense OF Congress win dou btess be taken upon the sub
ec OF finances further expedienis are resort
ed TO by the Treasury Department Meanw lille the ma
tona bank issues increasing the volume OF the cur
r0ncy at the average rate Of than three millions per
week and the prospect is that Congress will dnd itself
compeed 10 authorize further large issue Of national
bank currency in order to extend the system throughout
the South, which, In few exceptional
instances has been awarded portion OF the three
hundred million loan authorized by the National Cur
rency This goes show that the Treasury Depart
ment precipate in creating 50 large q number OF
banks the North antecedent to the close Of the
that the whole of the authorized three hundred millions
OF currency absorbed by them. Moreover
beyond the three hundred millions has been officially
apporioned The ultimate Of the national bank
ing system is yet matter Of uncertainty and will
main so until the resumption Of specie payments
takes place, when the banks under It's opera
ton will have their strength severely tested
But for the present they are, with a very
few exceptions, highly prosperous institutions
thanks to the National Currency act which gives Them
In most instances ninety per cent OF their capital repre-
sentsd by federal bonds in currency and pays them the
full coin interest upon the said bonds deposited secu
ry for the ultimate redemption OF the currency issued
The South alike with the other sections Of the country
Is therefore camorous for its share Of the circulation
and In order TO meet the demand Congress will probably
be forced to act upon Mr. Jay Cookies theory OF en-
largng the volume Of the national currency This ina-
ten must however be attended with corresponding
contraction OF the interest bearing currency, that
the aggregate afoa may be prevented from exceeding
Its present limits.
The evils of forced contraction should at the same
time be carefully guarded against and tho work Of
storing specie payments left much possible TO the
operation Of natural The disastrous effects Of
currency largely huctuang in volume practically
illustrated in the Of England between 1897 and 1885
and that the remedy for undue imitation does wholly
lie in contraction of the currency shown In that
country when in tho year last mentioned prices and the
currency had touched their lowest point 'The extnc-
tlon of the onepound notes." says the author Of tho
Financial History Of England sand the consequent
reduction Of the entire circulation backed by
Of more than average oneness, was
producing its inevitable effects The price of grain
slowly aud progressively falling until the years 1888
1884 and 1885 Wheat Of average goodness selling
currently in many parts OF the kingdom as low as four
shilngs and sixpence, four shings the bushe
and the average prices not forty shngs the quar-
ter The prices Of live stock owing to scarcity both of
sheep and did not go down quite in the pro-
portion Nevertheless prices upon the whole lower
than they had been for half century before and agri
cultural distress pervaded tho land from end the
other The aborers in some parts Of the kingdom pre-
served the rate OF wages by the desperate OF
incendarism but farms standing inlet aud
rents unpaid while the landlords who had committee
sitting in London besegcd the Houses OF Parliament and
ministers with petitions the burhen Of which that
by device other wheat should be made dearer
the expenses Of growing 1t less. The first beyond
the OF Parliament to do unless by letting the
small notes again. the seasons being beyond their powers
The distress among the laboring population here
ferred to must be avoided as much as possible in
own case in restoring specie payments At present the
principal argument OF the precpitae contractonsts is
based upon the high prices OF the neccssaries OF life
which severely upon the poor and persons Of mod
crate generally But 1t has been shown that the
prices OF the necessares Of life may forced
tremey low point and that distress among the poor may
increase with the progress OF the influencing the
decline Whatever is damaging to the general prosperity
OF country Is proportonatey impoverishing 70 the
great mass 81 its Inhabitants individually.
"The cause that raised wheat and meat" says the
author in speaking OF the imitation which preceded
tho panic Of 1s25-'namey, the multiplication OF bank
In circaaon-soon raised the price OF everything
else" And Mr. Tooke in his rrease the State OF the
Currency published In 1926 states that In his belief
not less than y per cent added TO the circulating
money OF Great Britain between the beginning Of 1922
and the summer of 1925 oTt became remarks Mr.
Tooke the business Of spectators and brokers 70 look
infinitely through the general price currents,
with view TO discover any article that
had not advanced, in order to make IL the
subject OF anticipated demand. II person not under
the influence OF the prevailing dcluslon inquired for
what any particular article had risen the
was Everything else has risen, and therefore
this ought TO rsse. This fictitious prosperity gave
impulse 10 speculative gambling unprecedented In mod
times, much SO that persons removed from Az
business, retired oficers, widows and single women Of
small fortune risked their their savings In
avery species of desperato
ton and scramble for premiums In concerns which
ought.neyer have been otherwise than at discount
perfectly astonishing 70 those who took no
part in those transactions In this connection may
mention that while the beginning of 1928 there
only hundred and ffy-nyo public companies in the
United Kingdom exclusive Of the banks, no less than
Ave hundred and thirty-two associations. with
nominal capital Of f44 600 stated to have sprung
up betweon that time and the Close Of 1925.
Thus while guarding against the evils Of undue
contraction It's consequent depression tho opposite
extreme OF further imitation and excessively high prices
mus. likewise DO avoided In other words II win be
necessary obvato much possible all sudden dis
tubances Of the currency the money market and prices
and gradually the rising prosperity Of the country viii
reach point when the currency now In circulation will
be hardly OF the requirements OF the people
and the transition to specie payments may be made
with Ear lighter shock than attended similar ordeals in
England and France
Mr. McCuloch, in suspending the further funding Of
the currency has given the public the assurance that he
10 alive TO the interests Of the banking and commercial
community and anxious TO the dangers attending
. stringent money market Tho recent monetary
spasm has shown thai the circulation OF
the country fully employed, and that In tho present
abnormal condition OF affairs It's contraction any form
must not be forced, hut ef, much possible to the
operation OF natural until the trade and
OF the whole country, and particularly Of the South
have had time from the exhaustng effects Of
the late war
Tho money market closed moderately easy at seven
Der cent for call loans, and return flow OF currency
having alroaAv In a some extent from East