The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1869-12-15
THE cURREN

The Most Important Question Before the
Country.
To THE EDITOR OF THE HERALD:-
What gives precedence to this question Is the cir
cumstance that the currency OF q country Is a
permanent, everabidlng necessity-a thing not OF
months or years, but for all time While industry
ana commerce continue to exist, or in otner words
long as the human raco shall inhabit the earth in
It's present form, currency In some shape ana under
some condition or other, must be maintained to cir
culate commodities ard keep all the complicated
and varied machinery or labor IN motion Hence
the question OF funding tho national debt. which Is
only temporary charge on the industry or the
people. and the REIMBURSEMENT or taxation. which 10
merely On incident growing out Of the same are
matters WI ch The economists ana the legislator can
only regard as OF secondary importance.
We have shown the origin Of paper currency, ana
that it rather the result OF accident than OF any
proconceved theory. The "money dealers iettersn
OF the Lombard merchants In the thirteenth century
were simply bills OF exchange, similar to those Of
the present day, which we shall hereafter classify
with tue various kinds OF currency recognized by
modern political economists. lheir clrcul atIon,
ser was limited, and we have no evidence that
tney were used as money then more than now. The
gold certificates OF the bank OF Amsterdam, which
were payabl IN six months, did taKe the place Of
gold as circulating medium. Now, 1t WAS the
accidental circumstance OF the Issue OF this
currency or "paper money by the Bank of Amster-
dam That established the practice system which
Dronlls3ory notes, payable on demand In gold or
silver bullion or coin To banks. Had the government
OF Holland or OF any other opu eat country Oeen the
first to issue such certificate, or demand notes It n
not only PROBABLE. but CERTAIN that the usage
would have confined the practics 60 the national ad
m DlstratfOnS Instead OF turning u over 70 nnmoer
OF private corporations. or TO one great national
monopoly as IN England. France and other Euro
pean countries When governments have resorted
to the practice OF issuing paper PROMISES they have
III all cases done sO-nOr 10 create convenient CIR
Gu atnx medium, or to promote tne ends OF legti-
mate commerce, bit to create capital or resources
out Oi the credit OF tie nation aence sucl nOtes
have as invariably keen irrodeemaDie and Us a
consequence. have deprecated when issued Ia ex-
cess OI the requirements or commerce.
The argument OF senator Summer ana other states
men that we should make haste To aDo.isn our ma
nonai or government currency and substitute In It's
place the paper OF an ln1nlre 1umOer OF BANKS has
no better foundatso than tne rea on offered " sne
cOuntryman who was ASKED by his more enlightened
neighDor why nc balanced his bag OF grain on
his horse, by means OF stone OF equal
weight, Wnen he migut readily DIVIDE MS corn b.
Ghe two ends and thus reeve his beast OF half
his load. His answer We are informed was, IhaI
MS father and grandfather had done so before INN
and 1t not Tor hun 10 Try experiments those
who argue for a retention OF our national currency
ana for aOOishing our bank currency fortunately
have had the experiment so far tried as 10 leave
doubt OF Its complete success when the growth OF
our commerce and the rapidly Increasing resources
the nation shall bring that cuIroncy to u specie
basis By an easy and natural process. IL Is Of no
consequence what the orlgnators Oh our present ma
tlonal currency contemplated when they put 1T IN
neither they Intended 1t 10 temporary
war measure or aS permanent Institution. ii III mas
served valuable purpose aad has, Us we contend IL
has, produced largo snare OF the resources,
Of the prosperity WHICH has slnce enabled
the country not only to bear up against All enormous
taxation but 10 develop It's incredible wealth IN a
ratio never before known in This Or any otner CON-
nunity. Or in any age OF the world then. we say let
us not destroy IT, aud go back - the worst and moss
precarlOus system oI currency ever known except
That Of the celebrated iona Law, or OF the Preach
aSsign8t3.
reasoning deduction, that The Issuing or That de-
scrpton Vi currency wnica takes the place OF moaey,
and which We snail refer 10 occasionally as paper
money contradi5sinctton to lnuuey, US well to
those other kinds Of paper currency which. Whine Iney
10 circulate commodities, are not received or
used money, should b. confined exclusively to
the NATION IN order the more exactly ~ reach the
conclusion we are aiming AZ We must briefly stabe
the Oh ecs attained suserved by the Substitution
OF paper for u purely netl.lic clrrelcy.
The object and purpose or money, IN Whatever
form, Is to circulate commoditles-aot as some
assert 10 saciiitate exchange3.' IL III fact aDol-
ishes exchanges ny rendering them unnecessary.
Before the invention OF money the commerce OF the
world must have been carried Oh by the rude pro-
Of barrier or Dy exchanging one kind OF produce
for another. Cod and silver having been selected
as q common measure OF values because Vi their
scarcity ana great value Us commodities, az once
abolished tue practice Of exchanges OF com D0ditles.
boon AZ and Win foreign countries. Wnen
writers assert that money 10 the medium Tor
enecung the exchange OF commodities, they
supply mean that being the measure OF values
the owner Of 1t may procure suca as he de-
sires without the necessity OF keeping
hand one Kind OF merchandise 70 De exchanged
for another. The object auu purpose Of money Is.
then, to promote or facilitate tue commercial trans
actions between individuals ana countries, by dolg
away with the system OF barser or the exchange OF
one specific description OF merchandise or product
OF LABOR another But to do tls IL necessary
untll the invention OF paper currency, payable IN
money on demand or ut a speciiic date, came into
vogue 10 transfer the precious metals lii tho shape Of
bullion from the purchaser to tho seller. In
a small community there might not DO much incOl-
yenieace In LuIs Latter method. But it will be OBJ
vious to every man OF rejection that in large
munitles aud W ,de5preal transactions great moon
venence and RISK would enslc. Hence II VIII DC
equally OBVIOUS that the notes Of solvent bank
q governments convertible into gold on demand must
tend greatly to promote the ends OF commerce aud
IN the same degree stimulate Industry. We desire
to Tx these universally accepted principles the
minds OF readers, because they TORN the ground
work OF the great question 10 what KIND OF cur
rencv we sna nencefortn have in TINS country.
We have q lew more general principe TO elucidate
before we reacn the man question coming up for
discussion In Congress. We nave 10 state the fact
that there several kinds Of currency continual
use lii commercial countries. First, there Is gold
and silver, money proper; secondly, the demand
notes Of solvent banks ana governments, which IRE
divided into two descriptions governed parity by
the same laws--DaMeiy, redee.nlbie according to
the terms Of the promises and irreJeenabse. Both
kinds are usually received ana pass as money, and
may properly enough De called paper money"
And thirdly all other kinds Of commercial paper,
such checks on bankers, time notes amt oils OF
exchange used Ia circulating commodities These
constitute the Currency oil ctvt.izei nations. Sc
cufies that are not commonly used in Circulating
commodities, such az the bonds OF governments
States municipalities ana corporations must be
Guided as not possessing tue requisites oil currency
which Is money or It's representative or equivalent
in the markets OF the word. we have now mar
rowed the subject down to one OF close reasoning
anu demonstration. at which we shall enceavor 70
arrive.
Treasury Report.
To THE EDITOR OF TUE uERALD:-
careful perusal OF the report OF the Secretary Of
the Treasury seisibly increased respect for
this olrccr. He has come to our views the
condition OF tho trade, currency and national IN
teresfs Of this Continent than any other has done
since the commencement OF our late war. indeed
he has in several instances used almost the same