The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1869-01-30

1
we have just given, but careful consideraIior
will show that II Is not so, as elasticity, a
an attribute Of currency. should pertain to II
not as measure Of value, but rs represen
tative OF active capital. y
Stability il the tixedness Of the volume o
the currency as compared with property
meas ured by it. Elasticity increases or les
! sens the volume determined by the necessi
ties for its use. Elasticity is by no means
synonymous with huctuation, the latter be-
ing the increase or diminution Of value Of
the currency nj one time as compared with
another; the former is the change Of volume
only as compared with itself
To give an illustration from sensible OBJ
ct; water il the most unstable, but the
least elastic Of substances
A currency to meet this requirement OF
elasticity should have such capability ofyol-
ume as 20 a6apt itself to the highest needs
OF the internal business and commerce of the
country, and al lhe same time such contrac-
liability to adapt itself to the stats of great
est depression without, in either case af-
iecting its soundness, or stability, or value.
This quality Of the currency is the element
Of its highest usefulness and safety as cir
culsting medium. In nothing is our present
currency more different. II has limit fxed
by law, beyond which it cannot go, however
great the exigencies of the business Of the
country may be; il ,ontains within itself 10
power Of cont action when not needed. Its
volume must then remain still the same,
seeking investment and profit in speculation
and adventure forced by the selfshness Of
bankers and capitalists.
Again, not being capable Of expansion the
unprlnclpled ami adventurous capitalist can
calculate exactly how much currency he must
lock up al the time when il is most needed
to bring about tnancIal crisis and distress,
and thus involve in rum the unsuspecting
and honest merchant and dealer who is mad
the i'm Of unlawful combinations which
he can neither foresee nor control. A de-
plorable example Of this, as practical Tact,
has taken place within t-w weeks under
our own eyes, BY which the managers Of an
insolvent railroad, in connection with certain
banks, who should have been regulators in
stead Of regraters Of the currency, contrived
to squester some thirty millions, aud thus to
bring about a striBgency in the money mar
ket, and consequent depression 10 the pub
lie securities Of some five per cent. IN sin
gle day, out Of which tine conspIrators might
realize large profits. Tnis process Of rob
bing the community may now be repeated
at pleasure A system Of currency which
permits its guardians, the banks which issue
it, TO thus sport with the public credit and
oppress the merchant, depress the public
funds, and unsette the business OF the coun-
try, IS clearly detective, and Il IL the duty of
Congress al once to provide the remedy for
that defect.
We see,. therefore, that our currency is
uniform, cheap, ard sound enough, but that
il lacks stability from tiuctuation and eiasti-
city, TO Accommodate itself to the changes
in the demands OF business. Our financial
y stem has another great and overshadowing
defect, controlling the prosperity aud devel-
Opment Of the industry and resources Of the
When called into use, as 9 representative
of capital, our money il enormously dear
Three hundred aud fifty six millions of il, not
now taking into account the fractional cur
reucY issued by the gosernment, wss AZ
once fundahle into gold-beafing bends at sixS
pSE cent, .pnlaxak.e By state sad nunic:2s
lnlborifies. and Nj Is lstpiy ~ Asd -Uts
Without warrant OF law uni&xable ~ fhx
governments itself; so that whoever uses it
n his business must pay m equivalent OF
en eT eleven per cent. for it's use. The rey
$500, ,00O, ,0O0-is issEsd to
he banks by the government which pays /
'ome eighteen millions to them tJr the privi- 4
ege Of furnishing and indorsing il, cannot I
Dc obtained by the consumer from the banks I
,hort OF nine or ten per cent. interes reca-
ming exchange ana commissions, that he 4
,ho uses it must pay. Out OF the great /
.ities and away from the sea-board, the aver
Ige rate Of interest is al least twelve per \
,ent. In. many sections of the Southern \
States, on whose productions OF the great 1
and tobacco-as our chief
xports TO meet the balance Of trade, which I
5 against US, we must depend, money can
lot be obtained at any -price, upon any seoC
NY, and if got at ali re average rates are Y
wenty -four ger cen view Of this, ii \
will be seen the rate /, v terest becomes q
natter Of national importance, as affecting \
,ur commercial relations with the other \
countries Of the world. Cotton can be pro- \
luced in Africa and India BY the use Of
capital, costing not more than four, or at
most, i've per cent per annum, while the
;apital used in producing our cotton costs 4
wenty-iour per cent; thus making direct 4
against our producer OF twen- l
y per cent, which of itself ID to the foreign 4
II quite sufficient profit on the business. 4
The high rate Of interest, which raises the 4
ralue Of all our productions, and the fixed
INIT to our currency, which ,4 Ivan
age Of to produce fnanclA. ,-.-- .ad dis 4
ress, Imperatively demands the most promE
md efficient remedy. 1t can be neither de-
,led nor delayed with safety or justice to our
people as individuals, or to the county as a
ration.
Impressed, az we are, With the necessity |
'or some amendment Of our financial system
10 effect these objects, still we must remem-
Der that every great or sudden change IN
he 6naEcos of the country has evet been, 40
Il ever q. be, the fruitful parent Of panic,
depression Of business, paralysis OF industry
and disaster. This consideration ought TO
our action within somewhaa
nEaraw limits.
The only comprehensive remedy for the
infelicities of our currency and financial CON |
Iition that has been proposed, 10 far as
know, il that we should resume specie pay
nents at once, or at some period more or
less remote, or, in other words, that We
should return to the currency existing before
the war, with the substitution only Of the
national for the State banks, l. e., that the
government should conduct it's affairs BY the
receipt and payment Of specie, and that the
banks should have in their vaults one-fourth
of the amount Of their circulation in gold,
thus to be In condition to profess to pav
specie for their bills when demanded, which
should, therefore, be equal to gold. This.
If il can be done. OF course would bring
every Uuifed States bond at once to par in
gold, as well rs all legal tenders, il the re-
turn TO specie payment by tie government
did not presuppose the substitution OF gold
for them. No one doubts that however soon
or late such change is effected it must
cause the greatest depreciation of values in
every species Of property except debts held
against the governments and individuals.
Every bond and note would be appreciated,
say thifty per cent all other property
would be deprecated the same amount as