, 1873-10-14

in their hour Of extron1itY" is ono
way Of saying that 1t had demands upon it, from
$50 country bnnks simultaneously, for about
"a, 900 Of currency, which 1t could not meet.
Tho superficial rcader might suppose that ihlB
was tantamount to deBoriion in tho face Of tho
enomy. and deserving OF lrum-hcad court mar
tial. Tho difficulty lay long way back Of that.
1t conslsted III tho practice OF paying interest on
deposits duo on demand. It is pretty Hafo to
say that the Union NationRl Bunk viii not pay
interest on deposits hereafter.
The amount Of currency in the city now Is u1l-
comfortably large. Ono bank yesterday asked .
customer as a favor to draw out s25, 900 instead
OF giving check for that amount payable
through tho Clearing -House,-a singular con-
trast to tho condition Of thinga two weeks ago.
THE LE1AL-TENDEn ACT.
On tho 10th Of 6eptomber, 1873, there wero
outstanding nearly $3.50, 100000 of currency Of
which about one-half was Treasury-notes, mado
cient for the transaction Of all business, but
large portion Of them was hold by the banks aB o
reserve fund. On the goth Of September it was
discovered that the volume Of curreucy WIS equal
deposits, and IN immediate rush was matlo to OBJ
tain possession OF this currency, aud hoard 1t
away. Tho anomaly Of tho insldicency OF the
currency on the 25th III explained by tho fact that
through bank balances, and that for this purpose
checks aud bills Of exchange servo rs substi-
tntes for currency. The regular daily businesh
dono in Chicago by nea'.s Of checks deposited in
drawn averaged 5000, 900: and when these
wero settled Ut the Clearing House, the balances
did not o1ceod s5oo.o0o. Thus in fact all tho
currency tlat was needed to pay theso inter
not exceed ono-tonth Of That sum. @ So So
with tho many millions Of daily transactions
between tho various cities of the country,
which arc oil carried on through bills Of
ed in their payment is even smaller. Tho
reason why the currency became no sndaon-
ly insufficient was tho withdrawal OF confidence
consequent upon the failure Of two or three
checks aud bla Of exchange was spongod out Of
existence. leaving tue country 10 carry on It's
business in stylo but ono dogreo removed from
barter. It was ut once found m impoasibity to
pay some 81 SOC, 900, ooo deposits on tho $780,
100000 currency, particularly when onc-fourth
or ono-third of this sum was not in the bauks ut
all Wherever tho distrust extended to q with
drawnl OF deposits, the money thus drawn ont
was not again deposited but !, hidden 1s AWAY IL
confidence which had already swept out Of
existence tho great means by which commercial
exchanges wero made, now Threatened to bury
whas little currency was loft to supply the moans
of hand-to-hand trndo. Any attempt to supply
tho place Of bank checks and bills Of OK
change bya
FURTHER ISSUE OF onEEN1AoKs
IS idle. Three Thousand millions Of dollara in
currency would not supply tue place Of bills Of
exchange, nor perform their office. The BUSH
ness of the country, the sale Of products, and
shcir transportation, aud all the transactions
That are described by the general term Of " COM
morce," wore suspended, not for the want Of
currency, but for tho want Of confidence in that
much larger branch OF bank machinery embraced
in checks, drafts, and bills Of e1change., It is
found In the experience OF other countries TINT
with the growth Of trade less currency is re-
quirod rather than more, and that wllilo bunk
deposits aud the volume Of transactions in
crease largely, there is Q constant tendency
to the further substitution Of checks
and drafta for notes, and coin. The habits of
different pooplss, however, Lave much to do
with this, some countries requiring more cur
roncy than others. not on account OF tho volume
Of business, but on account Of tAoir way Of do
ing business.
THE 1EaAL-GENDEa CHARACTER
of large portion Of tho currency, and, inli-
rectly, Of tho whole Of 1t, has lindered rpther
than hastoned the recovery Of bnainoBa, by shut
ting us out from foreign supplies OF money. It
country In tho Hame way hereafter, Not TO
dwell upon the cheating devices covered up ut-
der q luctuating currency, Of uncertain value
from day to day, it iB obvious that wo must cor-
tinue to sufTor from loclt-nps OF currency,
natural or artificial 80 long as tho Lega-Iondor
net continnoa in force. In order to put it aside,
aud adopt better and more flexible currency,
it is not necessary that Congress- should do any
violence to existing contraets, Tho repeal
should be made
WITH NEfEnEscE TO THE FUTURE.
An aot declaring That the Troasury notes should
not bo legal tender in payment of any debt
contracted after Jan. l, or May l, 1874, and
that after that time they should be convertible
into bonds, would neither impair existing con
tracta nor embarrass future oneH 1t will por,
nit the rebuilding OF credit upon Substantial
hna dufab!o pasiH of values. Ihe dold ltoon!
will be abolished. Tho contracts OF tho past Will
bo easily and satisfactorily adjusted, and the
United States in their ,,pexampIel proenerity
and increase OF wealth viii shake oil lilo tis.
I,s;l. ~ ns & tano ot "
VI tuGls l.ass auo,uuss-tno os!aGeen @ ~
voluntary Government hankruptoy-ant III thol!
future dealings use tho Hamo yardHtlcls and
tneasure OF .valuos that is employed by other
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