New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1868-05-25

the amount of s4 100000 per annun 3saTe anu mui
reduced The work OF replacing these reserves delayed
the shock and distributed IT'S eee ouT sst two years.
the Inevitable result During Ie PaS 81 w" inE vaIS
one by one, the various to tbe demand Then
produced supply @ 1duE a fall IN prices and
stagnation of business by "Sn t emnavment ~
sborers bSt the famine in Europe and the
ro 20 YIN n many Of the agricultural States of the Union
b Tent the price OF provisions from ialng as other
nave hePt Have fallen we shall have sufficient ex-
nIanaton OF the stagnaton OF business anu Ine uusai
distress oveTned by laws beyond the reach Of Congress
No legislation could nave arrested ~ AZ any ssaBS % no
& to d1 tsRs Os sdVantsse the prosperity
70 raise rne @ eyy its
pressure by reducing the vast machinery OF war 10 ne
pSTS than 10 suppose that the abundance Of currency
the prosperity OF @ 3 snS 1So on A' H0
"'-' THE FUNCTIONS OF CURRENCY.
In order to reach satisfactory OF the
enrrencv question is necessary to consider somewhat
fuy the nature and functions of money or any substitute
for It, The theory Of money which formed the basis OF
has been rejected by all leading hnancers and political
economists the last rs years That theory asserted
that money is wealth. that the great object Of every
nation should DO 70 increase its amount Of gold and
silver; that this direct increase of the national
wealth 1t is held as an ndisputable truth that
money instrument Of trade and performs but two
functions. 1t is Of value and medium Of eh
banks drawn upon by checks and drafts really serve te
purpose Of money When the money OF tne GoE hSs
without the aid OF legislation. Not So however VIII
nconvertble paper currency Exeepng tne SpeTlT
used in payment OF customs, and the interest Oh 0
public debt, We are cut on from Ihe m rotbe
currents of the world Our currency or
fn banks at the caprice OF the TO
keep company with it. II currency be more album
dant than business demands, not dollar OF IL can 20
supply the lack There is Legislature on earth wise
enough adjust such currency to the wants OF the
RELATION OF CURRENCY TO PRICES.
Let us examine infinitely the effect OF such cur
lions Of the country at the present time require $50
600 in gold 1t manifest that there are Just
of notes. and other money In the country,
each dollar will perform the full functions OF gold dollar
far the work of exchange concerned Now
Of be pressed into circulation The whole volume
thus increased, can do no more than all the business
lar did before the increase but the nominal dollar
fixed by law, the effect is shown In prices being doubled
It requires two OF these dollars make the same pur
chase that dollar made before the increase III would
require some time for the business OF tne 70 s
Of values would ensue but the result would az last Pe
reached in all transactions which are controlled by the
law Of demand and supply. -
DEPRECATED CURRENCY STIMULATES SPECULATION AND
ovERTRADISG.
Yhaye thus far considered the influence of redundant
paper currency the country when its trade and Indus
try are In healthy and normal state. now call atten-
ton its effect in producing an unhealthy expansion OF
business in stimulating speculation and extrayaganGe
sion and wdesp ruin This principles wei under
stood to require any & 90 eie e @, he ATTEST
American writer's on banks and banking, Mr. Gouge, thus
history pressures and pan has been The same
in 1925 1881 and si3 and the given in these two ample
There still remains to be considered the effect Of depre'
cated currency trade with other nations BY rails
ing prices home higher than they abroad imports
largely increased beyond the EXPORTS our coin must
60 abroad what far worse for US our bonds which
have suffered depreciation and purchased by
foreigners at 20 cents on the dollar During the whole
period of high prices Occasoned by the gold and
bonds have been steadily going abroad notwithstanding
tariff duties which average nearly 90 per cent ad ca,
Orem More than $5OOO00OO OF our bonds are now hed
in Europe ready to be thrown back upon us when any
other sufficient disturbance shall occur No tariff
rates short Of actual prohibition prevent this outflow
of gold while our currency is thus DEPRECATED During
these years. also our merchant marine steadily de-
creased and our shipbuiding interests nearly
| ruined. Our tunnage engaged in foreign trade
| which amounted in 1890 70 more than two-and-
| a-haH million tuns, had fallen in 1866 10 less
than and half mill0ns-a decrease OF more than
fifty per cent and prices OF labor and material are still
too high 70 enable shpwrghts 70 compete with for
egn builders. From the facts already exhibited In refer
TO industrial revolution and from the foregoing
analysis OF the nature and functions OF currency, u Is
manifest l. That the remarkable prosperity OF all indus
trial enterprise during the not caused by the
for every product labor That the great depression
of business the sagnation Of trade, the hard tines
which have prevailed during the past year, and which
still prevail, have not been caused by insufficient
ar s 81 % u. s @pR Sy s SDs Cd
with the increased supply since the return from war To
RELATION OF CURRENCY TO FINANCIAL PASIcs.
The table have submitted shows how perfect an index
business and that every great financial crisis during the
Increase followed by great and sudden decrease in
the volume of paper money Mercury in the barometer
than sudden increase OF decrease currency indca
tive OF financial disaster Within the period covered by
the table there four great financial and commercial
crises In this country They occurred in 1887 lSi 1854
and 1857 Now observe the change In the volume OF pa
per currency for those ON the lst day OF January
1851 the amount had risen sl0OOOOO an increase Of
nearly so per three years Before the end Of that
e %hS csased the Sad
resulted in terrible collapse and on n, the lst
Sl6OOOOO Wild lands which speculation had raised to
sl5 $40 per acre. fell 10 81 80 and a. accompanied by
corresponding depression In all branches OF business I'm
medaey after the crisis of SI the bank circulation de-
creased Is cent and by the end Of lsi2 was reduced
beginning OF 1853 the amount was Speculation
ana O5 mas TFoSueed the crash of & At the
beginning OF 1851 the paper money OF tne country
There were nearly Sl0OOOO but at the end Of that dis
year the volume had fallen TO slS5OocOOO de-
OF nearly 20 cent In less than Il months In tho
great crashes preceding 1887 the same conditions are
invariably seen-great expansion, followed by violent
counts and those manifestations have always been
companed by corresponding huctuaton IN prices In
the great crash OF 1872 one OF the seVerest TINS country
ever suffered there complete prostitution OF bust
ness 1t Is recorded in Mess Register for 1920 that in
Ave dollars the amount Of his subscription that paper
Wheat cents per bushel and corn 10 cents About
We have now no standard value asked a fsT yard Of
bOsdclOh which, when had dollars used get for IS 'hngs
SCARCITY oP CURRENCY IN THE WEST.
That there apparent strngency In our money mar
ket generally and relative scarcity of currency In the
especially it has been and sti e very dicult in the
West to obtain money on 1od o business psRe e
financial machinery and In the great uncertainty
attending our financial legislation. 1t Is well settled
principle that currency not redeemabe tends TO find
It's way to the money ceners and stay there Most unor
tuRaely for the country the national banks have been
allowed receive interest the deposits they make IN
banks at the great money centers. Most OF the
country banks, therefore. send all their surplus
funds to New-York, and will not loan money
unless they can receive g. higher rate
than is paid them there For all practical purposesher
notes are equal greenbacks and they never called
upon to redeem them Thus have plethora Of money
m New York and other Cities and scarcity the
country We are financially in the condition OF sick