Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1868-06-17

since the war, showing that they Wer
due more to the change in demand, ol
account of the stoppage OF the militar,
expenditures, than to the contraction
of the currency; and also that a simi
lar reaction has come over trade II
England and on the continent. II,
gives signs of weakness at this point
for if the contraction of the currency
had made the reduction in prices, i
would only have carried them over 81
much Of the way 10 the level that mus
be reached with specie currency.
He shows how the effect of issuinl
paper money is to raise prices, so tha
there is only a disturbance of valu,
without any relative increase in money
how it destroys the obligation of con
tracts; how it drives real money
abroad how it stimulates foreigu i'm
portations and uusettles home industry
how, when once begun, the tendency
is always to issue more; he refutes the
notion that the rate of interest can be
reduced by issuing paper money, and
shows that interest is always lowest II
countries where specie is the money
he shows all these and other evils oi
paper money, which are true; ano
these are mixed with some theorie:
which seem to US inconsistent with
them.
For exsmple, Mr.. Garfield assumes
that there is some ascertainable amount
of money needed for business, and
that paper is to be added to Just thi:
amount and no more. If any is to be
added, there is no reason for any limit
We might as well talk Of aseertsining
the amount of water that Americs
ought to contribute to the ocean, tC
keep up its level at the end. The
money of the world will find its level,
according to the business demand, Just
as irresistably as the water of the ocean
finds its level. The prices of property
adjust themselves to the amount Of
money. There is no such thing as ad-
justing the amount of money to the
prices, simply because, as Mr.. Garfield
declares, every increase of money
raises prices, and every contraction OF
money lowers prices. 1t is as impossi-
bic to adjust the amount of money to
the wants of business, by adding more,
as 1t is TO adjust the quantity of oil to
the wants OF combustion by pouring on.
What money there is in the world is
always enough for the business of the
world. If the quantity of gold and
silver were but a fractional part as
great, it would serve the same purpose.
Commerce has the same facility if a
penDyweight of silver represents the
value off, bushel of wheat, or of a DAVIS
wages, as if it takes three ounces of
the same metal. The increase in the
quantity of money depreciates its value,
so that the result is, it takes nominally
more to do the same business. 4 local
addition Of gold and silver, causes it to
flow outward till the general level is
reached. If the local addition is in
paper notes, the outflow in gold and
silver leaves paper money, in place of
real money, as the perfect triumph of
the system.
And Mr.. Garfield need not have
made this negative declaration in
answer to the notion that paper money
made business and wealth during the
war:
Rising prices increased the profits of business,
out this prosperity was caused BY the great de-
nand for products, and lot By the abundance of
'aper money. AS means Of transasting the
Last business Of the country, great volume Of
currency was indispensable; and its Importance
annot be well Overestimated. But let Us not be
e into the fatal error of suppOsing that paper
money ereated the business or produced IN e
wealth.
Money infa ton does make a certain
lind of business. The rising prices
ause purchases of every sort of proper
y on speculation. II turns the whole
rade of the country into that line
t II were now made known that Con- |
Fess would issue hundred millions |
nore of greenbacks, all the trading |
ommodities of the land would be |
ought up or held for a rise. This
Tould make splendid business. This
J what they want, who advocate more
egsl tenders. They think they are
harp enough to play out the game,
nd then drop it on those who are not
p to the trick. But the result would
e that all wond be so well up TO the
rick that all would fail at it. And,
there was much of what
called wealth made in the war by
ne nominal rise in the values of prop
rty, by the money imitation but this
ealth will nominslly shrink again,
hen our currency becomes real money;
nd yet the holders will not be poorer.
nd when Mr.. Garfield says in the
DOve extract, that in the war, the
Irge amount of business made the
reat volume of currency indispensa-
le, he kicks over his main proposition,
ld sets at n2ught ali the lessons he
as drawn from history and obserTa-
on for the increase of currency IN (
lie war only raised prices so that more
pillars were required to transact the
me business. And, besides, the busi-
-ss Of the war was no vaster than
hat the country now has to do.
These variations mar the symmetry {
Mr.. GaTfield's main propositions, ]
ith which We agree; but the remark
lie part of his observations in the j
ills of a redundant currency, lies in 9
10 application of them by his plan of
ire. He proposes to raise the whole /
the present amount of currency to 7
It with gold, by beginning next De- /
mber to pay gold at the National e
.easury for greenbacks at the rate Of
in gold for 81, 80 in greenbacks, and /
en- to raise the rate of greenbacks one 8
T cent. per month, until on the 18th T
y of June, 1871, they shall be ex- )
anged dollar for dollar. And to his b
Il, to carry out this project, he adds :
is proviso: "PrOUiasd, That nothing d
this act shall be so construed as TO c
thorize the retirement or cancella- {
IN OF any legal-tender notes of the y
1ited States" There is to be no con- o
lction of the greenbacks and, of n
urse, with near four hundred mil 6
rs of greenbacks out for q redemp- II
N medium, soon to be raised to par 4
tn coin, the banks need not contract II
cir notes. And thus he is going to y
Sc seven hundred millions of paper q
,ney to par with specie, and to bring Z
specie payment. d
We have to ask, in admiration, why II
| Mr.. Garfield make this labored d
'ay of proof of the deadly nature of p
s paper money serpent, if he was CT
ng to end by taking it to his bosom. al
his labored compilation of the les bt
Is of experience and of publicists, P,
h such a conclusion, he is like the di
,st of burden who carries load of M
" learned books in his panniers, but "
mes out no wiser at his journeys 81
/. he gives statistics to impress on NJ
minds the fact that we never had th
millions of paper money before the &c
r without crisis and suspension an
e business of the country is no great as
now than then. And yet ne ends si1
to carry 200 millions with
Gle payment. If any one were to pc
in direct juxtsposition heelements Gi