The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1866-04-05

our currency and trade and the rise and
fall of gold since the increase of cur
rency began. When specie payment
was suspended, and the increase of cur
rency began, the coin was withdrawn
from circulation into boards, and used
only to pay foreign balances. This
prevented the rapid increase of paper
| money from being immediately felt.
Also the making of paper money a le-
gal tender for debts removed the home
demand for coin to pay balances. Coin
| was thus taken from use. except to pay
abroad. With the increase of importa-
tfons and of exports of coin, it appre-
Iciated in paper money value.
Ifthis outflow to pay foreign balances
were all in coin, its appreciation in our
currency would be in proportion to the
increase of the currency, and thus
would be ut "A premium of 100 and over,
for the quantity of money has been
more than doubled. But the public
| gold bonds are a currency for paying
| foreign balances; and to the extent to
| which these have taken the place of
| gold in such payment; has the rise in
gold been checked. There has from the
| first been a foreign demand for these
bonds. 1t has varied considerably, ac-
cording to9the prospects of national
| preservation. In 1864, large importn-
lions and limited demand for our bonds
| in Europe caused such an outflow OF
gold that the premium rose to about
| the level of our currency. Then the
paper dollar, which was worth but
fortylcents at home, was red uced blythe
process of exchange to only that pur-
chasing power abroad. This stopped
importations and restored the balance
| of trade. AS the war drew to close,
the foreign demand for our bonds in
took the place of coin, which then de-
preciated toward the value of the cur
| rency and bonds. ,,.-.E-
Thus the government gold bonds are
added to the amount of money to pay
| foreign balances. The demand for them
even makesn balance in our favor, thus
| further increasing our supply of coin
and depreciating IL toward the value of
our paper money. Under an increasing
demand, or by forcing foreign sales OF
bonds, we see no reason why gold may
not depreciate to the same value as our
currency, even at its present volume
| The operations adds all the gold bonds
| to the redundancy of the currency for
| foreign purchases, and will add the coin
| if that shall depreciate, to the value of
| the currency. Thus the bonds are adj
ded TO supply the outward tide of mo-
ney; and if the foreign demand is equal
to the issue, (Which it is likely to be,)
they must be exhausted before the
check of the drain of money is felt on
IL is seen, therefore, that the effects
caused by the addition of the gold bonds
to the quantity of money paying eS-
changes, mysterious as they have seem
edto some, are only the operation of the
simple principles that the increase OF
the quantity 70 money raises prices, in
creases importRtions, decreases ex-
kports, and causes the money to flow
outwardly to cheaper markets until the
drain shall have reduced the amount
of money to the general level. We have
added about ], 200 millions to our avail
able currency for foreign payments
Mr.. McCulloch proposes. to add about
| I,SOO millions more by funding the cur
rency obligations in gold bonds, and to
stimulate the outflow by making them
payable abroad, and also by selling
them for what they will fetch, so as 10
rency. " 4't
1t is one of the strangest features of
Mr.. McCulloch's money theories that
he deprecates the redundancy of the
currency, for its effect in increasing inn
portations, and yet is apparently blind
TO the fact the increase of gold bonds
adds Just so much to the redundancy
of the currency for foreign payments.
1t is strange that since he has seen that
| the increase of importations in conse-
quence of a redundant currency is
checked when the price of gold is ac-
cording to the depreciation of the cur
rency, and is stimulated when gold
ldepreciates toward the value of the
currency, he should still be SO desirous
to resort to sales of gold bonds in Eu-
rope to depreciate gold.
1t is most strange that after Mr.. Nc
| Culloch's statement of the enormous
| extent of our currency initiation, and of
its inevitable disastrous consequences,
| If not speedily reduced, he should now
have the 'delusion-.as he assured Con-
Cress whilethe loan bill was pending
! in the House-that with "judicious
legislation (" "I shall be hopeful that
the currency of the country may be
brought up TO the specie standard with
out large reduction of it,
What can "judicious legislation do
to bring up redundant currency to
specie value without reducing the guam
tity? Nothing but to authorize HIM to
fund currency obligations in gold bonds
and to sell them abroad for what they
will fetch, SO as to bring in. coin. VIII
this bring up the currency to, the spe-
Gle standard" 1t will only depreciate
the specie to the currency standard. It
is simply to buy gold abroad for 6S
cents on the dollar and pay 1t out here
ut the value of Il currency. II Will con-
tinue only so long as the Government
will furnish bonds and foreign mark
ets-wilI take them. It will continue
and multiply every evil of initiation,
and will only postpone, while II mug
/ nifies, the final prostration.
Referring to the rudimentary principle
of money, and to the experience of all
the workings of our currency imitation
we see that the introduction of specie
payments by such means, on an intin-
ted currency, will only be adding so
much deprecated coin to the currency.
With ali the panic and disturbance it
willcreate, it will still keep up the con-
dition that depresses home production
and bonds will only flow out more rap
idly. Nothing but reduction of the
amount of money in the country, in
Guiding the bonds available for foreign
payment, to the general level-whichi is
about where itiwas before the war-can
restore trade to natural conditions.
5l Congress was deIuded by the promise
TO restore specie payment without seIi-
Gus contraction of the currency. The
| great concern shown in the debate by
nearly all those who opposed the loan
| bill, was that the currency should not
be contracted. They did not perceive
the first principle of money, aud thus
had no definite ideas to give them sta
stability. They sought to show that
the currency is not inflated, and that a
great country needs an expanded cur
eWeopposed the imitation. We now
oppose contraction, because we would
pay off the currency debt in its own
| coin. We oppose funding the currency
Idebt in gold bonds because they will
| have to be paid when money will be
| more than twice as dear as now-when
| it will be more than twice as hard for
the people to earn it, and for the Gov