The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1872-12-03

increase or diminish the volume OF currency In the
ditlon OF things law rule which can safely
rely. Upon these views form the conclusion that
the circulation OF the banks should be fixed
and limited, and that the power to change the
volume OF paper In circulation, within limits
S estao,lsned BY law, should remain in the
currency Is essential Tor two reasons First, the
business q the department. cspnot be transacted
the circulation above or reduce It below that
limit is denied. a rule Of this nature would
Ssnce sna to noS IL as s
the credit OF the government In meeting the
ordinary claims on Il would won be At the mercy
in the 6nited States or Europe Especially would
this be true, now that our ordinary currency ex-
penditures are greatly In excess of our currency
revenue. Secondly. there is necessity every
Autumn for moving the crops without delay from
the South and West to the seaboard, that they may
wanted. This work should be done in the main
before the lakes rivers and canals are closed.
large amounts OF currency. In the Summer
months funds accumulate ut the centres, but
the renewal OF business IN august ana . sep
ing the crops in october and November
manent increase or permanent reduction Of
the volume OF currency. The dimculty Is due
70 a na eyd o. g snd
abundance Of its harvests. The crops cannot be
moyea o generally stny ~ the aid Of bank
and United States notes paid at once to the pro-
ducers. This money finds its way speedily into the
but if it be allowed to remain for general use alter
the reason for Its issue has ceased the value OF
CURRENCY would be Increased permanently and
peated, with the same results, and thus would the
country depart more and more widely from the
81 increasing tie currency FOR moving the crops,
and diminishing II at once when That work is
done. This Is necessary work, and inasmuch as
no hn Ana n hn hnnk uhnr0 hnf
in the Treasury Department can the power be
reposedp While the currency revenue was in
to accumulate large balances In the Treasury
during the Summer to be used, II necessary in the
purchase OF the bonds in the Autumn, thereby
meeting the usual demand for currency ut that
season OF the year. Hereafter such accumulatiOns
must be made by the sale of gold, and the sale
OF gold in large quantities during the Summer,
when business is the least active, may not always be
consistent with the best interests OF the country.
Reliance cannot, therefore. be placed upon the
ability OF the Treasury to accumulate currency
balance each year for the purpose indicated. The
argument In favor OF paper currency composed in
part OF United States notes and in part OF national
| bank notes Is strengthened by thetaid which may
thus be furnished In resuming and maintaining
to take, exclude the idea that the government
will ever abandon the issue OF national bank notes
their place. The result of such poicy NAV be
foreseen. The people, deprived OF the facilities
for business anorded by banks, would seek relief
through State institutions, and without much delay
Congress would concedc to them the right to issue
notes for circulation. This concession would be fol-
lowed by q surrender by the general government
country. The true policy will be found In continu-
ing the national banking system, without, how
paper in circulation: fheTTs are two efrset"ai and
dition when specie and paper win possess
the same commercial valIe By diminishing the
amount Of paper IN circulation the difference be-
diminish, and by pursuing this policy the difference
will disappear altogether. All legislation limited
in Its operation to the paper issues Of the banks
and OF the government, whether bearing in
teresr or not, and which, In its effects, shall
tend to diminish the market value OF coin, Will
be found, upon analysis, to contain plan for con-
tracing the volume OF paper currency; and all
legislation so limited, which does not contain such
sition, and believing that the countryi not pre-
pared to sustain the policy OF contraction 1t only
remains lor me 10 consider ane means , Dy which
The basis of policy OF Improvement must
be found in sturdy refusal to add to the paper in
italy as coin. This being accepted as the settled
purpose Of the country there can be no permanent
w
natural causes, tending, upon the whole. to bet
ter financial condition. We may count first
n0n :asss se ever
ness and labor; secondly, In the South
and using and holding money will increase; next,
we may anticipate more general use Of paper In
Texas and the PACING states, by which, practically
win wi be diminished and tie quantity Of r coin
increased-two facts tending to produce an
causes al Win T.
degree by the increasing facility for the
tss Of Re to ns
OF deposit The rapid transit OF merchandise, in
bringing the pelod Of it's consumption nearer to
lar sort, giving to these views their full
weight. am prepared to say that the ex.
se q s ee
the opinion that under the influence OF existing
natural causes, our financial condition will gradn-
! were several circumstances Of unusual character
tending to counterfeit the natural course OF AFFAIRS
Our exports of cotton fell of $37, 900 OO0 and there
/ were excessive imports of wool, tea, coffee and
sugar. The stock OF wool in warehouse on the
3oth Of June was sufficient for six months con.
months, OF coffee for five months and Of
tea for twelve months. In this ordinary course OIL
small during the current year, with consequent
favorable effect upon the balance between tins ant
other countries. This anticipation OF the wants
| OF the country In connection with the decrease o
our exports augmented the balance OF trade, ere
atcd an active demand for coin and advance,
the price. Notwithstanding these adverse in
nuences gold has averaged, substantially, the sam
premium from January to November Of tn
ISL. Not DOUBLING that natural causes w
time produce the result sought II y yet advisable
to bring the power err Of the goysrnment in aid
The revival OF our foreign commerce is one In
strumentality, and perhaps the most efficicnt one
OF all. II the annual earnings OF American yes
sells were $780, 900, instead OF $50 1000. tho
difference in the amount OF exchange available
| abroad would meet large part Of the ad
ence OF Europe tends to show that the ability
I Of country to maintain specie payments Ii
due largely to the condition OF Its foreign trade
Next, every measure which increases or improves
the channels Of transportation between the sea
| board and the cotton and grain growing regions o
4 n
something to our capacity to compete successfully
| In the markets OF the world. Finally, those meas
especially OF iron, wool and cotton, and discourage
the importation OF like products, affect favorabll
| the balance OF trade, and help us toward the enc
eral statement OF policy that, in my opinion
will aid the country In reaching condition
| when IL will be practicable to resume and
maintain specie payments. Anticipating that
day, anticipate also that the burden o
resumption will rest upon the government