The Portland daily press., 1866-01-04
The Volume Of the Currency.
$7O4,21s,oss

N---'
Total s7o4,2lso3s |
The Secretary estimates that, of the out
standing five per cent. Treasury notes and
commandments notes, S3O,0OO,00O were in
circulation as currency, making an aggregate
of S734, 21S03S.
The Comptroller Of the Currency, in his re-
port, rules out of this estimate several items,
and makes the volume of currency in actual
circulation, to he less than S5OO,O00,O00. Nei-
tier OF. these officer includes the precious me-
ais in his estimate of the currency, becau e,
paper being legal tender by act of Congress s,
gold and silver have retired from the circula-
ton, and constitute no part of it, paper
dollar will not call out metallic one, and
therefore the precious metals, for all the pur-
poses of currency, no longer exist; or, if they
do exist in any practical relation to the cur
rency, it is only that they may give to that
currency fictitious value, and make it rep
resent more than its real value. The moment
paper money is made redeemable at us lace
in gold and silver, at the will OF the holder,
gold and silver will become actual curren-
cy, and will require to be considered in estima-
ting the real circulating currency of the coun-
try.
Without attempting to explain or reconcile
the difference in volume of the currency, as
given in the two reports referred to,-that of
the Secretary of the Treasury and that of his
subordinate officer. the Comptroller of the
Currency,-we shall, for the purposes of this
article, take the largest sum, and consider the
actual volume to be, in round numbers, $734,-
100000. This is called "infated." On all
hands we hear of the "infated currency" of
the country, and long, able and elaborate ar
ticles have been written to show that this in
Aation, this actual excess ofcurrency over and
above the real wants of business, is working
immense mischief and swelling the prices of
all the necessaries as well as Injuries of life
to an enormous and unreasonable extent, OPP
pressive to the poor, embarrassing to the we'll
to-do, and dangerous to all. ~ .sI .i.4,f
1t is no part of our present article to contro-
vert this impression. We propose, rather, to
adduce certain facts, which seem to our mind
to conflict with this theory of an 'nfatsd cur
rency," and which we are unable to explain in
perfect harmony with it. ir- v-r oi 4l.
We may as well state here, once for all, that
currency that is not based on .f1ed STAN
dard, like gold and silver (which is irredeemable
at the will of the holder, and is made legal ten
der by arbitrary act of law when it is worth
less for many OF the purposes for which gold
and silver may be used, is inflated, there is too
much of IL, and there would be too much even
If here were but five dollars of it in the wide
world. Such currency is a financial NUS
ance, to be tolerated only from necessity, and
which should be got rid of with the least prac-
t:cable delay. But it is not in this sense that
we, or that others, speak CT the currency as
"infated;" as beingin excess of the demands
of business. EFlrr
We wish now to call attention to the cur
rency Of the country as it existed before the
icar, when no one claimed that it was inflated,
that we may see, when properly considered,
how much larger, practically, the volume Is
now than it aeas then.
In his report for the year ending June 80,
1861, Secretary Chase gave the currency Of
'hS S'AhliJ '9 ioio"S, ioi IHS ASt udy VI lie
preceding January: af+ ga no,
Circulation of the Banks 5000 O00,7e7
Gold and silver, 3if r.. 275,OO0,0O0
Total, $477 900, 7e7
Gold and silver then being the only legal
tender, and the paper money of the country
being convertible Into gold AID silver at the
will Of the holder, the precious metals were as
leSitimately part of the currency as the pa
per itself, and the whole-paper and gold-was
worth its par value. Gold was worth no more
than paper. The amount here given by Mr..
Chase, all Of specie value, is about 100000
more than the amount which Mr.. Clark, the
Comptroller ofthe Currency, estimates as the
"actual circulation" when his report was made
few weeks since. But we propose to COM
pare the volume as given by Mr.. Chase for
Jan. 1, 1851, with the volume given by Mr..
McCulloch for Oct. 80, 1855.
fa We are aware that the banks, In 1861, were
required to keep on hand certain amount of
specie, varying according to the laws Of differ
ent States; but as the national banks are now
required to keep on hand even larger
amount oflegal tenders, both-the legal ten
ders now and the specie in '61-included in
the foregoing estimates of the volume of the |
currency, we will set one against the other,
and in our reckoning take no note ofeither.
1t will be admitted, we suppose, that in con-
sequence of our present system of taxation, |
and the ruling high prices of the world, and |
the large rates of interest being offered for |
gold by foreign governments in their efforts to
negotiate loans, if prices in this country were
to specie values, and specie payments
should be restored, prices would not come
down to the old figure OF 81, but would rule
very much higher than then. Hon much high
er Is question for the judgment. While we
have heard sharp business men estimate it
very much higher, we have heard no one place
it lower than 20 per cent. If this estimate is
not unreasonable, then it would require one
fifth more currency now than in 1861 to do the
same business. i.s.s .st.,s seit shlatiao3
The amount of business now as compared +
with '61, is another question in relation to
which estimates must take the place of ac-
,uaIy ascertained facts. That it is greatly in
excess-as our population and wealth are
here can be no doubt. Ho,u much, is the ques-
ion. We have heard keen, observing, practi- /
'al men set this excess at thirty, forty and ev-
IN fifty per cent. We are disposed to go be-
ow them all, for safety, and consider it only
10 per cent. IT. therefore, the actual business
has increased one-ifth, the volume of the cur
'ency requires corresponding increase in Or
Ter to afford the same accommodation now as
hen. u, ifl.-.l ..sa-,,. -Fr-lI
There is another important iact to be noted.
In 1881 very large proportion ofthe business
If the untry, as compared with the present
lime, was done on credit, for which accounts
Or promissory notes were made. This kind of
commercial paper stood in the place Of cur
'encY. To large extent what those notes and |