Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1869-12-08

the Currency TO the present Congress,
and just published, We make extracts
wherein the subject OF the two kinds o.
currency in use (greenbacks and nation
al bank notes. is discussed, and also the
subject of free banking:
SOUND CURRENCY.
There are two requisites to a sound
currency: convertibilIty and elasticity,
and either Of the two involves the other,
The present currency of the United
States possesses neither of these requi-
sites. During the past year it has Meth
er increased nor diminished, but stands
about as it did this time last year-SS9O,-
100000 issued by the government. and
$780, 900, 900 issued by the banks-neither
redeemable nor convertible into any
thing more valuable, and therefore not
susceptible of reduction by any ordinary
process each issued to the full limit al
lowed by law, with no power of eXpan-
sion. The whole amount must be en-
ployed, whether it is wanted or not, and
the limit can not be exceeded, no matter
how urgently more may be required
During the summer months, when there
is rest in almost all branches Of trade, the
whole circulation was in market seeking
employment; and now that autumn has
come, with its bounteous harvests, when
the farmer seeks to realize in money tho
reward of his labor and the interest
of his capital for the whole year, when
hundreds of millions must be distribu
ted throughout the length and breadth
of the land, we have the same unvarying
amount Of currency to use.
There are two kinds ofeurrency in use;
n issued directly by the government I;
the other issued by the banks. One kind
would seem TO be enough. Tho best
should be preserved and perfected ; the
other Withdrawn.
Applying the test first TO the govern
ment issues, it is noted st once that they
are not redeemable, and that no provis-
ion has aver been made for that purpose.
The very moment they are made redeem
able they will cease to answer the pur-
poses of currency for after they are re-
deemed they are in the treasury and can
not again be paid out, except as dis
bursemsnts may be necessary to pay ex-
penses and debts OF the government. So
that government circulation is not con-
vertible, and therefore is not elastic, and
can not be made so without first making
a radical change in the organization ofthe
United States treasury, by which it should
be converted into q huge banking insti-
tuition calculated 10 receive deposits,
make lOal6, ana OLlerhlbe perform the
functions of a national bank.
The notes issued by national banks III
nominally redeemable; and, if the legal
tender notes were out of the way, would
be actually so and, being issued by in
situations il sympathy with trade, would
contract and expand in obedience to the
law of supply and demand, so that they
would also possess the element of elas-
AS to the comparative merits of the
two kinds Of currency, an impartial con-
would probably decide in IA
vor ofthe banking circulation, principal
ly because il would possess the power Of
adapting itselfto the exigencies oftrafhc.
If government issues could be made to
possess the same power ofAdaptation, the
would be in their favor. A an
did investigation, however, can not fail
TO develop the fact that there is no branch
of the fiscal service adequate to the di-
rect issue and care of such a currency as
the country requires. The treasury sys-
tenn 10 so arbitrary in its collections and
disbursements, so little in harmony with
the business interests of the community,
it frequently absorbs large amounts
Of currency at most inopportune seasons
and disburSes them with just as little re-
gard to the wants of trade. II the treas
uEJ hcEG IcuccL1Auk Ia AS8ucct EoLBC
amounts would be presented for pay
lnent when money was plenty; but, as
he return Of tEis money to the channels
Of trade would depend upon the disburse-
ments of the government, there could be
certainty that il would find its way
back again when needed. In fact, the
operations of the treasury Of the
United States are regarded by business
as constituting a very powerful and
at the same time, a very uncertain ele-
ment, difficult 10 estimate, but which
must necessarily be taken into consider
alton in all their business transactions.
is but justice, however, to say that the
inconvenience and defects inherent to
the present system have been obviated
as far as possible by the present admin
.rstration of the department, and where
they could not be obviated entirely they
have been reduced to q minimum.
So long, therefore, az the collection Of
the revenues is liable to be a process OF
contraction, and their disbursements q
process of initiation, the agencies through
which collections and disbursements are
effected can not be regarded as suitable
agencies for furnishing sound currency
to the people.
The argument that the government
should furnish the currency in order
Iudt II may Ee1llZS tue pEOul upOn IL
circulation is a common one, but will not
bear scrutiny. There is no profit to the
government on the circulation Of n infe-
rior currency. Only a sound currency
will promote the material prosperity Of
the people, and the government can real
ize no profit from anything detrimental TO
their interests. As q currency, therefore,
governmentissues are not profitable. As
a loan, without interest they are equally
Improbable, because they are injurious
to the national credit, and add enormous
ly to the expenses Of the government.
If, however, it is impossible for the
government to comply with the condi-
tons necessary in order to furnish a
sound currency, it can at least provide
for the withdrawal of its wi notes, and
prescribe the conditions upon which and
the agencies through which, a better cur
n may be provided. AS before stat
ed, there should be but one paper cur
rency in the country, and that should
emanate from a source that is influenced
by, and is amenable to, the laws Of
trade. No check or limitation should be
imposed upon it, otherwise than the law
of supply and demand.
FREE BANKING.
The banking system now in operation