New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1871-09-04
THE CURRENCY.
VIEWS OF TIE HON. JOSEPH MEDllA'
Obsn s,o

Ms nah at COlHmhut OhO aug "a I
Con Ewing gives ii us his OPINION !nat ms
Now wildcat currency will reduce the rates OF ln'eleS
il vii establish AMI nearly Uniform rate OF %
be issued at once as viii 'oTnau ba tie average
whole Government per ctD snt inst Of per
,' oScs ssbt 1 be "mParavs sao s s nd
to S a.. a So DT ii f Ss exchanges for .,orod nv
gTearr fuqncia falldcy never was uttered ny any
,,1n eTi,Ied TO a respectful hearing. The proposed
rnd, not being payable IN gold OF 0IHer nuapo ~
sanSe pr irpormeble notes Their issue will initiate
the currency precisely the same as the issue o. tLS
daon always produces the exactly opposite eHect IN
rnnntiS as all experience has demonstrated BEFORE
war the ruling rates OF interest were 1ar rover 'nau
ter imitation, and consequent depreciation set IN. IN
lion causes expansion Of prices, and While the WaScL-
c process goes dealers seem to gain large profits
IDS stimulates speculation aud there is reckless rush
20 borrow money the lenders advance their rates on
account OF the extra demand, and the probability that
thus imitation always results in higher rates OF interest,"
{ reap dollars mean dear interest The more abundant
aud the lghcr are the rates charged for Its use
CONTRACTION CAUSES LOW RATES OF INTEREST.
Contraction on the contrary II not too sudden pro-
huces reduction Of interest rates, because as the
dollar becomes more valuable fewer dollars will trans
act the exchanges Of the country and the chances OF
being repaid in a better currency makes capitalists
ANXIOUS 10 loan money on the best attainaDle terms
Contraction also checks speculation because In reducing
falling market Tue borrowing demand thus falls on,
aud with it, high rates Of interest Men do less risky
carry lighter stocks OF goods go less into DEBT
and 10 not spread so much sail for their ballast.
Within the personal recollection OF mdule-aReu men
there have been three periods of currency imitation at
tdcd with high rates Of interest and reckless specua
G a@u and en- distress after
commenced, with greatly reduced rates OF interest Inc
t,ird and last imitation followed by gradual con
traction Of currency and gradual reduction Of interest
During the initiation eliminating in 1887 interest rose al
as and vaSes bad touched he inter
st went down TO per cent IN the East ana pc
aton which collapsed In 1851 drove the rate OF neres
H. per cent in Ohio and is TO 10 in the further West
Mo pfiOu followed
reduced IT in all parts Of the Union. In Illinois 1t fell OF
to 10 per cent and in the East to and 7.
CONTRACTION INCREAsEs THE VALUE OF THE CURRENCY
Toward the close of the Rebellion we had s., 100000
currency worth 80 to 60 cents on the dollar We have
COW 600 of currency, worth 90 per cent While
he currency contracted IS cent in volume
tha gained 70 per cent IN va1 S Tnted
.tes from TO since 1865 There Is now plethora OF
money low rates OF interest at al te money s 70
ontract the currency little more ana II VIII rise 10
lar value Of gold interest will fall still lower and
money be SUI more a99haant mneu tne 49, vii he
Uses To par with gold the money OF e1GnaIge Ml 10
nstany reinforced by all the idle gold and silver IN
be country. Coin will then come into circulation, ana
lean silver change will take the place OF greasy nasty
fractional shn-pasters In all countries where the
interest low and loanabe money is abundant as In
treat Britain France, aud Germany whereas III austria,
Italy, SPAIN and Russia, where the paper currency Is
appreciated the rates Of interest high, money hard
70 borrow and extOrtOnate usury prevails
oower to u currency and restrain wild speculation and
hereby make money easier to get by egmate DorTow
aud towns Of depOsitng surplus money with banks and
uayug and balances with checks and drafts drawn
against deposits has the effect to double or treble tine
anabe funds these institutions and TO dispense IL
large measure with carrying currency about Oh thf
pers0n or keeping IL in actual possession lying idle
Whereas the oanable capital belonging to all classes
hanks does not exceed the discounts OF those
hanks surpass s. This results from the ndi
yua deposits made with the banks which average ove
iGS oOO-more than fourths Of which the bank
Esep loaned out. Good times and easy money mar
krt depend general industry surplus capitalseeknI
Investment improved credit Of the Government, a Sc
lred and redeemable currency and reduced taxation
and at all on the quantity Of deprecated notes tina
dy b. issued to circulate money for the greater the
lntion the worse It is for the general prOsperiy.