, 1872-12-03

|
constantly improving intellectual and socia culture
and condition It being given that an intelligent per
has u the special knowledge Of N art Or tFad!
operative who, outside of this special training and
perience, is nnintelhgent, and machinery being
70 improve and simplify the methods of production t.
such extent that addition to his wages, ever
100 per cent represents hgt snail part q the asan
Of The ignorant man is tic basis Of the improvements
made. This truth considere first, with reference
drea thousand times, represents the advantage o1
America Europe and Asia, in their contest for
Il IN 5an antn 81 the II tl
ages by extracting cheap production from expensive
labor. The reason for these remarks may be found
in the opinion entertain, that the tariff system of tht
country has contributed largely to the general pros
pezity, and that such geueraland continued prosperity
is the only basis on which even wise financial policy
| cali rest.
In discussing the other changes caused by the wa1
issues Of tbs United States notes and OF
notes by the National Banks, they should
necessary parts OF financial system. Neither CAD
be substituted for the oerwhout general disturbance
private banks, while The substitution Of equal
! amount Of United States notes currency would be
aiBsnEs hold o I M % Of United States bonds
! which otherwise would be thrown upon the HarEety
a5sorbng domestic capital q purchased en- ca,,a
creasng balances against Us in our account current
with other countries.
Second, office Of bank is to aggregate the capt-
tai Of small possessions and thereby to furnish means
in aid Of important commercial and financial under,
takng6 not only ut tla centres but IN tho remote anu
| uewly=setted parts OF the county.
Third. The National Banks are used as aids to the
Governments which otherwise would require @ isfge
and proportional increase Of tie pubic expenses,
! without the least appreclable advantage.
Fourth. They facintae exchange between sections OF
the country aud thus diminish the cost of coeTcisl
| transactions.
Fifth They are generally less disposed than private
parties controlling equal capital to demand exorbsnf
But it does not follow from these views, nor would
might be presented that the system is perfect, does
follow that the issue Of notes drect By the G6sern
ment should be surrendered, and the business Of
! The circulation of each bank is fixed arbitrarily by
rule Of law. The aggregate circu1ation is
eny there sea prpcieaby and resevs
to meet the increased demand for money occasionally
due to extraordinary events at home abroad, and
arriving occasionally with the incoming Of the har-
vest
The old State Bank system is sometimes commended
for quality termed "elastcity," but that quality
dnancal disasters Under that system IN the allegiance
Of the Present demand for con there WAS practically
! The increase Of the circulation was Mt
| tended and followed by an advance in prices;
drawn from the banks to meet balances ABROAD SIM
utaneous reduction Of the paper currency, and the
consequent Q18tTuSt Of merchants 1nQ DauEefa, AB
the circulation Of bank is source Of profit and
| the managers usually disposed to oblige their
patrons BY loans and accommodations, tcan never be
wise to allow banks and parties, who have pecuniary
interests at heart, to increase diminish
the volume Of currency in the country at
law or rule on which safely rely. Upon these
views form the conclusion that the circulation Of the
banks should be fixed and limited and that The power
the limits established by law, should remain in the
Treasury Department. .... ..-......
degree Of elasticity in the volume Of currency Is
essential for TWO
First The business OF the Department cannot be tram
tue eircuation above Or reduce below that limit is de-
MED. rule Of this nature would compel the Secre
ta5y to accumulate lasge currency 6alanee and to
Government IN meeting the ordinary claims
it would be at the mercy Of every serious business
Especially would this be true that ordinary
currency expenditures greatly in excess of our
Secondly. There is necessity every autumn for
SsathS md wsss to ":N' tie sss5eafa. ssss tsss
consumption as wanted. This work should bs done
in the main before the akes rivers, and canals
large amounts OF currency. In the summer months
funds accumuate at the centres, but the revival Of
business in August and September eivss employment
ssr Nor ns vosa sub, t Tits 2Ra a5say M l. esV
reduction Of The volume Of the currency. The diff
Guilty is due to the natural order Of things, and in
IN the Of the crops cannot Be
moved generally By the aid Of bank balances checks
and letters Of credit but only by bank notes and Uni
money finds its way speedily into the channels Of
trade, and to the commercial centres, but il
sor It's a9aa as s tie os
of currency would be increased permanently, and the
M s ts the me- s % ts oe
part more and more widely from the policy OF resump
The problem ia to find way Of increasing the cur
rency for moving the crops, and diminishing it at
when that work is done. This is necessary
work. and inasnnuch it cannot bs confded to the
banks, where but in the Treasury Department. can
the power be reposed? While the currency revenue
VA IN Of me M it. was
ing the summer, to be used, if necessary, in tho
purchase Of the bonds in the autun thereby meeting
year. Hereafter such accumulation must be made by
the sale OF gold and the sale Of gold in large quantities
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 cur
rency balance each year for the purpose indicated.
The argument in favor Of paper currency, COM |
posed in part Of United States notes and in part Of
National Bank notes. is strengthened By the aid which
may thus be furnished in resuming and maintaining
SPECIE PAYMENTS.
In the view am about to take, + exclude the |
idea that the Government will abandon the issue
United States notes in their place. The result Of such
policy may be foreseen. lie people, deprived OF the
facilities for business afforded by banks, would seek
relief through State institutions, and without much
delay, Congress would concede to them the right |
to issue notes for circulation. This concession
would be followed By surrender by the General Gov-
eminent Of al control over the paper circulation Of the
country, The true policy will be found in continuing
the national banking SYSTEM without, however, yield
ing increase Of its issue in proportion to the volume
Of Government paper in circulation.
There two cfectual and certain ways Of placing
the country In condition when specie and paper will
possess the came commercial value. By diminish
ing the amount Of paper in crcula-
tiou, the difference between the commercial
value Of paper and coin will diminish, and by pursu
ing this policy the difference will disappear altogether
AL legislation, however limited in its operation to
the paper issues Of the banks and Of the Government
whether bearing interest not, and which in effect
shall tend to diminish the market value Of con will be
found upon analysis to contain plan for controlling
the volume Of paper currency, and all legis-
1ation go limited, which does not contain such
plan, will prove Intellectual. Accepting
this proposition and levng that the country is not
prepared to sanction the policy Of contraction it only
remains for to consider the means by which the
value Of currency may be improved The basis Of
a policy of improvement must be found in steady |
refusal to add to the in circulation, until is Of
the value substantially coin. This being accepted
the settled of the country. there be