The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1867-08-20

pouDtless curlailed by this scarcity or nonevS
ne npast tnS business needed was done, and was
| 2 go PLVnsaole as ever. And the effort was whole
e, sOne, feople owed less, spent less saved moro
'HS es money % soon became abundant -
onS oIn IN iooll merchants, bankers, and traders,
cuu , eNel mad contracted excessive iabi6.
tles which they could not meet The cnnptrg
nau @ not merchandise enough, Including cold. 90
pa pay Its Gept abroad, aud the result was gene.
! raj Oreakdown of credit, greatly and neediessIv
! aggravated by the Ienorance ana foiiv N bonsJ
! managers IN New York. The deficiency was moi
one OF currency, but of exportabIe merohandise
! 49, letuLn Ur 10 Ine question, What is to be
! IoHe! we answer the Government must with
| oraW ITS notes from circulation until those
which remain will exchange at mar with snecio
ms is the simple test which cannot deceive.
| when once the equilibrium OF nominal values
! with specie Is established, specie payments can
be as easily resumed as the gates of a canal lock
can De thrown open when the water ON both
! SIDES IS at the same level. OF course the with
! draWal OF legal tender notes will compel the
! banks to provide for the redemption of their
| own surplus notes, and to curtail the very hbe.
RAJ oook credits, or deposits" which they have
sunered TO attain such dangerous expansion,
! This emtnently healthy and much needed pro.
cess will cooperate with that of the Treasury
IN reducing the volume of currency, and with It
the scale OF prices affected oy it. The process
| need not be sudden, but, if honestly set about.
1t may be far more rapid than is generally sup
! poseu, ana this without causing any painful
pressure on any interest worth protecting.
| But how is this to be done? We reply, in any
| one or more of a multitude of ways all amount.
ing to the same thing. The QUE indispensable
| condition IS that the pressure upon prices be
steady ana constant, though 1t need not be
! severe. Idle money leads to speculation; specu.
! lation advances prices, stimulates credit, and
leads to the incurring of liabilities which can
not readily be met. The result is demand for
money, and stringenCy, which gives currency
mongeTs pretext for demanding more issues of
| paper, and so the evil goes en- perpetuatng and
| agg1avating itself, as we have all experienced.
Now the remedy for this is, not TO allow any
n lot Ae foef q
10 do so, the Government should absorb II by
the sale of bonds, and withdraw it from circu.
latlon. This being done openly and systematic
Cally, would utterly break down the sDecula.
latlve and gambling spirit which has so long
rtoted on the fluctuations of our currency: and
all prudent merchants, banks, and bankers
would hasten TO get out of excessive debt, and
keep So The mere curtailment of unnecessary
business would set tree currency so rapidly that
the process would involve no hardship to SOL
vent people, and once commenced, it would be
be accomplished.
But those practical men, whose practical
knowledge is rendered only mischlevous by
want OF comprehension insist that all this is
mere theory and that The facts will turn out
Just the opposite. In support of this assertion
they allege, with the mostIpersistent hardihood
sury, however moderate, has produced the most
dangerous, almost fatal, consequences to the
mercantile community, and that the evil has
ORdy oldy 9een stayed IN every case by the prompt
Now, what are the facts? Before any curtail-
ment OF the currency was attempted, the banks
OF the country had gathered up some $50, 900, 900
OF compound interest notes. which thew delibe.
lately laid aside as an investment. This thew
had right to do, if their surplus funds permit.
led; but, availing themselves OF the egreqious
olunder by which these notes were made legal
tender, they proceeded with some praiseWorthy
eXceptions) to include these notes as part of
their legal reserve, thereby utterly violating the
spirit OF the law. Having by this substitution
released large amount OF currency thew |
proceeded to lend the latter in all possible quar-
ters, giving a most mischievous impulse to
speculation; and when the liabilities thus con- /
tracted had TO be paid, the real currency was
gone, and the banks, with large nominal re-
serves OF compound interest notes, could neither
help their victims nor pay their own debts
Where the treasury had Withdrawn eight mil
lions, the banks had withdrawn eighty and vet
they charge their distress upon the Treasuryl
But even then, how much distress was caused?
Was there single day when United States per
cent. bonds even approached par, or when mo-
ney could not be borrowed on good security at
z per cent? And j. 1t to alleviate such pretended
suffering that we are asked to plunder the rich.
Cypress the poor, and dishonor the good name
OF our countRyY
1t will, perhaps, be argued that as all other
currency Is based on legal-teuder notes. every
wlthorawal of the latter involves still larger
withdrawal Of the former. This is partly true,
ana Is reason for moderation in this as in ali
otheI great changes. But If las is eVldent) the
present expansion of banks is excessive and
checked only by the actual pressure of law and
the inability to find any kind OF paper
money with with to pay the checks
drawn on them, and if Gas seems eyi-
denD nothing but actual compulslon will
induce them 10 contract their credit
within reasonable bounds, what else can we do
but take away gradually the basis of this dan
geIous and unwarrantable superstructure And
be u remembered this is not to be done by any
arbitrary or doubtful action, such as created the
dlthculty at first, but by the simple process of
the treasury paying its own notes and canceng
us own Indebtedness, which the Govern men1
has the same right to do that all its citizens
nave. AS Tor real money, the material (gold)
TO create It, and the credit to replace it, are and
Wll continue as attainabie and available as
ever. ~
It's argued, however, "by practical menp that
.he volume OF currency must vary greatly at
inherent times, as, for instance when large
amounts are required to "moVe the crops y and |
hat a curtailment which could be borae at !
other times would be absolutely ruinous then.
some allowance must doubtless be made for
his, and we do not propose that all the cur
rency withdrawn from circulation should be at
once destroyed, but part might be held in re.
serve tor possible contingencies, and reissued If
necessary. But we are confident this neces-
'Ity Will never arise. The decline of prices
would, at least, keep pace with the curtaiment
)i currency, and the volume of the latter would
continue abundantly adequate to the wants of
IL great mistake TO suppose that ia com.
nerclal country anything OF real necessity or
Importance ever remains undone for lack of
currency, though 1t may for lack OF capital In
ls41 Great Britain was threatened with famine,
ma the Bank OF England, with the benevolent :
motive of keeping the people from starvation, | :
expanded its credit very imprudently to promote
he importation Of grain. The consequence
Vas a vast and excessive Importation a ruinoua