The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1871-12-15
Contraction of the Currency.

snccie and raper money upon iSn'
hos ,ccn taught by political ccof'o-
m,s,s. and legislators have Mt dii'eie''' INV,
,,,o,,,,,cS to nut il into practice, IN spite OF
.,,o o,c, that experience teaches that IL u
.,o,r, which does not hold good when so
tested. The legislator who should auc'npt 10
r.d,cc ,he price Of wheat in this way would
re accounted fool. The price is known 10
I've regulated by the law of supply and de-
mand. No one ever proposes in Congress 10
.,t aside this law Of nature and render II IN
operative by passing law of human inven'
ton. But as to the currency, almost every
member seems to labor under the delusion tc
which We have referred. Nor let any one
rcply that MS wheat Il low one year be-
cause there is much of il on the market,
an high the next because there Is nut niue
Of il for sale, therefore paper currcnc!
should be high when the amount OF II Is
small and u,ce rersa. Wheat pcrishes in the
,,sl,c tits bought and consumed. If, like cur
rcn.y. it could be used over and over again
indefinitely. it would, like currency, be inde-
pcndent to some extent Of the law of supply
and demand; OF, rather, would be abic 10
comply with the requirements OF that Ia" III
two ways-first by reason of its equality III
amount with the specie in the country ana,
secondly. by reason Of its ability to multiply
itself indefinitely in that it can be passed from
hand to hand as often as it may be necessary
so To lass it to make up for deficiency III It's
amount. For instance, if Richmond needs
that million of dollars shall daily pass from
blnd 10 hand, this end can be secured either
lv RAISING that sum from hand 10 hand once
or 10y passing onc-fourth of that sum from
hand TO hand four times. How can the amount
of The CURRENCY SO long as there is enough OF 1t
TO answer the purposes for which it Is nccc>-
,.,ry, affect the price of gold As compared
with itself: Nobody consumes either coin
or currency. not onc-half of the currency
i ever i'm circulation ut one timc-wc mean
ii the same minute or hour. 1t costs nothin"
to handle it. A thousand dollars of it will
on any day, and on many days docs, pay ten
thousand dollars Of debts. Ii IS evident,
then. that practically the amount Of the cur
rrncy is 1T least ten times Git might be csti-
mated at twenty times the amount when
counted but once. Thus, suppose we have
citht hundred millions Of dollars Of cur
rv,cy; practically it is eight thousand mil
lions. Surprising, then, that Mr.. SUMNER
could induce Congress to cause 1t to be re-
dnced by the sum of one hundred millions
of dollars (and nobody expects il TO be re-
duccd by half that SUM-, we should still
have seven hundred millions of actual cur
r..ucv. and seven thousand millions if used
ten times per day; but rs it can he used as
much oi,cner per diem us we choose, there
would lie in fact no reduction of the amount
ui the currency.
Now, the facts agree with our theory. The
last Cincinnati Commercial has letter from
Paris which states that some time ago, coin
lenr very scarce, the Bank Of France decided
to issue small notes. The notes arc now in
circulation. Millions of dollars of specie
have been taken from France to Germany.
Yet now, with currency more abundant than
it was and specie much more scarce, coin Is
at II premium of only one per cent; aud this
in spite of the fact that the Government will
not accept these new paper issues for taxes.
The Congress Of the United States few
year, ago ordered the currency to be con-
t.actcd. The work was commenced; but such
was the claInor against the operation of the
law, and so different were its results from
what had been expected, that Congress made
haste to repeal it.
The Confederate Congress once tried the
same experiment. Ii required the currency
to he reduced by one-third rs n means of re-
ducing the high prices of coin, flour, and eve
lytliug else. On the first day of April all the
currency became valueless and IA new currency
was issued to fill its place. Each man, now
ever, who presented this old currency at the
Treasury received before that day one-third
of the amount so presented in bonds and two
thirds in new currency. Here it was absolutely
certain that the amount of the currency had
inen reduced 10y onc-third. What was the
result? We remember well. Coal went up
instantly from twenty to thirty dollars per
ton-exactly onc-half counting upwards, or
one-third counting downwards-and so with
1lour, sugar, coffee, and every other article.
Of course gold and silver went up too, and
in short time We're twice us high It's before
the contraction of the currency. 1t win I've
said that this result was due to the want of
faith on the part of The public in the fortunes
of the Contederacy. So we say; and SO we
say aS to @reenbacks. The amount of them
has but little to do with their value. The
certainty OF their redemption has much TO
do with it. 1t is with bank notes, or rrecn-
backs, rs it is with JOHN SMITHS or PETER
BRowN's notes. If BROWN is known to No
worth million of dollars and to he honest
'nd puts out notes to the amount of hum
dred thousand dollars, they will be held and
Sold at or near par. But if SMITH, being
poor, puts out notes to the amount of even
ten thousand dollars, these will be far below
pT-worth, perhaps, not ten cents in the
dollar. Now, if Uncle Sam and his banks
were not good for eight hundred millions Of
currency, and were good for seven hundred
millions, then, and in that case, a contraction
Of the amount of the currency by one hundred
millions would have the effect TO bring il
nearer The specie standard; but not as the
facts now are.
The amount of the cllrrency WAS NO creotor
when gold was selling at $50 than it is NOW
when it Is selling at 100. 4 declaration bv
Congress of war with England and France
would Tomorrow send it up instantly to 14o
or more though of tolIrSe the amount NJ ~