The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1872-12-12

, incominr of the harvest. The old stat
bank system is sometimes commended Tor
quality termed elasticity" but that quail
ity, found in that system. was the priDclpa
source of financial disaster. Under tina
system, in elegance Of the present demant
for coin, there was practically no limit t,
the issue of a paper currency. An incrsas
of circulation was attended and followed b,
an advance in prices, excessive importa tions
q consequent demand for coin drawn iron
the banks to meet balances abroad, u sinai
taneous reduction Of the paper currency. apc
the consequent distress of merchants anc
bankers. The circulation of bank il ,
source Of profit, and The managers are usual
~ disposed to oblge their patrons by loan,
and accommodations. 1t can never be wise
to allow banks and pa ties who have pecuui.
airy interests at stake to increase or diminish
the volume of urrency in the country Al
their pleasure Nor do find in the condi.
ton of them law or rule on which we can
safely rely.
Upon these views I form the conclusion
t hat the circulation OF the banks should be
fixed and limited, and that he power to
change the volume of paper in circulation
withiA the limits established by law should
remain in the Treasury Department. A dis,
erection as to the volume of currency is essen.
tial, for tive reasons:
First, the business of the department can
not be transacted properly ii y lImIt is Fixed,
sd : h
or reduce below that limit is denied. a rule
OF this nature would compel the Secretary TO
aecumuiste a large curreacy balance, and to
hold It, as otherwise the credit of the govern
ment in making the ordinary claims on it,
wsuld be at the mercy OF every serious bus
mess and political revolution in the United
States or Europe. Especially would this be
true now that our ordinary currency expAn
difures are greatly in sxcess of ouf carrency
revenue.
Secondly, there is a necessity every autunn
Tor movirg the crops without delay from the
south and west to the seaboard, that they
may be on hand for export and consumption
as wanted. This work should be done in the
closed and yet 1t cannot be done without
the use of large amounts of currency. In the
summer money funds accumulate at the ceR-
tres but the renewal of business in August
and September gives employment for large
sums and leaves little or nothing Tor forward.
ing the crops 10 October and Novem Der.
Nor would this difficulty be abated oy per-
manent increase or a permanent reduction OF
the volu Of the currency, The difficulty is
due to the natural order of things and in
creAseSwlth the prosperity of the country
as shown in the abundance of it's harvests
The crops cannot be moved generally bv the
aid OF bank ba lances, checks and letters of
credit, but only by bank notes and United
States notes paid At once to the producers.
This money Rnds It's way speedily into the
channels of trade and to The commercial GEN.
tres, but it will be allowed to renal, for
general use. Af'er the reason for its Issue
has ceased, the volume of currency would he
increased permanently, and the year follow
ing he same process would be repeated with
the same results, and thus would the conn
try drpar' more and more widely from the
policy Of resumption. The problem is { o ind
way for incre Asing the currency for NOV.
ing the crops, a Id diminishing it at once
when hat work is done. This is a necessary
work, and inasmuch rs 1t cannot be confined
in the banks, where, but in the Treasury De-
partment, can The power be repoSed? While
the currency revenue was In excens of the
currer cy expenses it was pr. cticable to ac-
cunulate large balances in the Treasury dur-
lR2 the summer. to be used, if necessary. in
the purchase of the bonds In the autumn
thereby meeting tho usual demand tor cnr-
rency at that season of the year, and there.
after such accumulation must be made bv the
sale OF gold in large quantities during shr
summer, when business is least active. and
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 a currency balance
each year for the purpose indicated.
The argument in favor of paper currency com.
posed in pa OF United 81 ates notes ard In part
ofnational bank notes Is streng hened bv the aid
which may thus be furnished in resumi az and
maintaining specls payments. ln the vleWI am
now to take, | exclude the ida that the govern
ment will ever abandon the Issue of national ban
notes and undertake the issue OF United States
notes 10 their place. The result of such policy
may be foreseen. The people deprived of the ia
cilit,es 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. The co noes
sion would be followed by surrender by the gen.
eral government of all control over the paper cir
culation of the country. The true policy will bs
found in continuing the national banking system
without, however, yiedlng the increase fits issus
in DroportiOn to the volume O naner In cirnnlntlnr