Green-Mountain freeman. [volume] (Montpelier, Vt.) 1844-1884, 1873-10-01


FRrxrAN, but it can do no hurt to again call
attention TO it.
There is now what is called great strin-
gency in the money market. The national
banks, as well as individual bankers, have
practically suspended payment everywhere
that is, they pay no checks drawn against
deposits unless the checks are small in
amount; and this for the very good reason
that they have no money to pay them with.
In the time Of state banking the suspension
offs bank meant usually that it did not pay
specie for its bills. Now suspended bank,
thanks to currency secured by pledge Of
government bonds, causes no uneasiness
among holders of its bills, its depositors
being its only anxious creditors. The whole
greenback and national bank circulation is.
notwithstanding the panic, not only worth
as much as before, but is in fact more valuable
that is, it has greater purchasing power.
Then what is meant by scarcity of money
of which almost everybody is complaining?
There is no unusual scarcity of money
that is, there is just as much money in circu-
lation to-day as there was four weeks ago,
and probably more than was then in circula-
ton. As an item of this possible increase,
the government has paid out thirty-fve
millions of greenbacks mostly in New York
City alone, in the last ten days; and none OF
| thsse greenbacks were in circulation pre-
viously. Tue banks have, in the meantime,
been paying out currency until. they say
their supply is exhausted. This money has
not gone out of the country, because it is
not current anyw here else. 1t is at home,
and is doubtless answering its purpose as
currency as well as ever.
hut bank bills and greenbacks usually
have little employment in transacting the
| greater portion OF the business OF the country.
ln ordinary times the business of the banks
Of New York City for single day, as shown
I by the clearing house figures, reaches fire.
quently ninety IN lions of dollars yet not
more than four millions of currency are used
IN these exchanges, the other eighty-six
millions being in checks, or something else
which for the time being is regarded as a
representative of value. A broker may pay
out in day a million dollars OF certified
checks, drawn against nothing, and before
the close of business hours make his account
good, as it is called, BY depositing million
dollars in similar certified checks on some
other bank and these certified checks,
which represent no currency deposited any
where, in ordinary times were equivalent to
money in the transaction of the business OF
the city. The panic has, however, knocked
the money value out of these checks, since,
although the banks receive them now as
formerly, through the clearing house, they
will not pay currency for them over their
counters. Money is as plenty as ever, but
confidence in bank checks is gone, and SO far
as they have constituted circulating medium
they are no longer serv;ceable. Is the strin-
5ency in the money market anything else
than this?
The government has not brought about
this state of things except by encouraging
such railroad enterprises as the Northern
Pacific years in advance of any demand for
them, and by issuing an irredeemable paper
currency yet it is noticeable that the only
relief sought of the government thus far is
more irredeemable money. One would sup
pose that the banks ought to be satisfied with
an unlimited power to issue certified checks
and certificates of Indebtedness which they
do not pretend to redeem in anything which
is even called money, without asking the
| United States to go any further in the same
direction; yet thi is the remedy proposed,
| and so far as the government has acted is the
one adopted. 1t ls, perhaps, fortunate that
che limit to which the government can 60 is
the issue of the forty-four millions of reserve
greenbacks although Reverdy johnson has
furnished the President an opinion that the
law and the constitution are no rule for him
10 such an emergency as this, and if this is
so the President may as we'll issue ten
thousand millions as a single dollar, and
while he is about 1T make US all rich by
giving us our share of it. This is sinailia
simizibus curantur with a vengeance. 1t is
the madness of the poor inebriate whose
diseased appetite grows by what it feeds
upon until the frenzy of delirium closes the
career.
The government ought to have nothing to
do with the money of the country except to
stamp its value. 1t should never issue it,
cor control the amount which may be issued
md it ought to recognize nothing as money
except coin. The national banking system
enlarged into free banking can do the rest,
md would do it, if it were allowed to. The
bill holders would always be perfectly secure,
md all the currency needed by the business
IF the country would be furnished just as
surely as any demand will bring its just sup
ply. The banks, of course, would be required
TO redeem their bills in coin, but while they
we're SECURED by the pledge of bonds this
would seldom be exacted. This would
give currency which would accommodate
itself to the business Of the country, and
would be governed by the laws of supply
and demand like any other industry or pur-
suit.
1t will be noticed that the President has
decided to use any or all of the forty-four
million reserve, to relieve the business of the
country. 1t is not quite clear how he can
do this except by the purchase of bonds al
has already been done. and BY paying out
the reserve for current expenses, as will quite
likely seem to be necessary. Such govern
ment action will do little good, as is appar-
ent from the little benefit realized By the pay
ment of the thirty FIVE millions put in Cir
culation last week but it will very likely
be as we'll for the business of the country
for the government to get that reserve off it