The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1873-10-04
OUR CURRENCY.

and experienced banker, Sydney Myers,
ESQ, Manager Of the Merchants, Far
mers and Mechanics Savings Bank. twill
well repay perusal, and at the present time
its republication is both acceptable and
appropos. We invite careful attention to
this communication, and to what may fol-
low from week to week
HO1 to render il Elastic and Self-ddjssting
as to Volume, according 10 the demands Of
Commercs
The system by which currency il now
supplied in the United States is in most re-
spects admirable, and with some modifca-
tions which experience has suggested, or
will suggest, it will become the best sys-
tenn the world has ever known. While our
currency affords undoubted security to the
bill holders, it is at present deficient in q
leading and essential element Of currency
fully applicable to the wants of a great
commercial country. The deficiency is the
absence of any present provision for con-
traction and expansion with the fall and
rise Of the internal exchanges of the coun-
try at different seasons of the year this
deficiency, causing alternately pinch and
plethora, distress and speculation, and dur
ing the movement of the great crops Of
Northern and Southern agricultural re-
gions absolute currency asphyxia.
This deficiency in our currency system is
too well understood by all classes to need
any elaboration in proof of its existence
No business man can have failed to OBJ
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be in mid-summer, as soon a. the cotton
crop Of the South and the grain crop Of
he West begin to move in the autumn, the
movement Of those crops divert the cur
rency from other uses. The N ovement OF
such abundant crops a. those OF the last
and of the present year is embarrassed and
delayed by the want Of currency, and the
tendency is to reduce prices and deprive
agriculturists Of a full remuneration Of
their products. A mere expansion of the
currency by free banking, or otherwise, will
not give permanent relief If the currency
were expanded this fall and not contracted
next summer we should be liable to the
same pinch next autumn. Higher prices
for everything would absorb the increased
volume Of currency in the summer, and
when the time arrived to move the crops
the supply of currency for these move
ments must be collected, as now, from
other branches Of business, causing great
inconvenience. Under present circum-
stances, our currency is always Of the same
volume it never contracts, but at certain
seasons each year business contracts. Is
the curr ency for the benefit of business
Or is business done for the benefit of the
currency Is it better that business should
contract and expand to adjust itself to the
volume of the currency or that the cur
rency should contract and expand to adapt
itself to the wants of business.
If the last question il answered in the
affirmative, it remains to be considered
whether this result can be reached in
simple and practical way, without injur-
iously affecting any interest, without dis
turbing any Of the admirable features Of
our present system, without tearing down,
but by building upon, what we have.
During the time that Mr.. McCulloch
was Secretary Of the Treasury of the
United States, forty-four millions of dol
lars Of legal tender notes were withdrawn
from circulation, and are now in the Treas
ury of the United States. 1t is claimed
by the present Secretary of the Treasury
that he has a right to reissue these notes
and withdraw them again at pleasure.
About FIVE millions of these notes we're re-
issued and loaned without interest to GER
tain banks in New York, both after the
Chicago fire, and after the late Boston
fire. and were subsequently withdrawn.
The power to e-issue and withdraw such
an amount of currency is too great q
power to rest in the hands Of any one
man. The issue of these notes was proha-
bly, judicious, and may at the time have
averted general financial distress. They
were perhaps withdrawn with equal good
Judgment. IL there not, however, q mode
BY which the currency needs OF the bust
ness public Of the United States may be
met in crisises like these, and also during
those periodical crisises which are expert
enced with more or less force each autumn
| by a system which will be automatic in its
action governed by the will or judgment Of
no single man It is believed that this is
entirely practicable and within easy reach
The following proposition was submitted
through the daily papers both East and
West, last autumn. 1t has been quite
generally discussed, and the comments
upon it have been favorable. No serious
objection has been urged against it, and
it is believed by many thoughtful and ex-
perienced business men and 6nanciers
that its adoption and enactment by Con-
gress would be exceedingly beneficial to
the whole country. The proposition is As
follows
To reliere Extraordinary Pressure, and q
refiee the Secretary Of the Treasury from
OaerOus and undue Responsibility, Pro.
riied BY act Of Congress:
To permit any holder Of ten thousand dol.
lars, or multiplies thereof, in any gold-bear-
ing bonds of the United States to retire the
same Temporarily. at the sub-Tressuries oI
designated DepositOries in New York, San
Francisco, New Orleans, or Chicago, under
regulations to be made by the Secretary Of
the Treas ury, and receive an amount Of
United States Legal Tender Notes equal II
the face Of said Ponds temporarily retired
and upon presentation Of like sum in United
States Notes at the place where said Bonds
were temporarily retired, to receive the SAID
Bonds, or their equivalent in kind less the
interest which would have accrued during
the time that the said Bonds were temporarily
retired and provide, further, that the Sec
retary Of the Treasury be required to hold il
ECScENc OnlboU sSbaSco A1ckhA AcHucT tNOtcS u
I the amount Of forty four millions Of dollars
to be used for the purpose of temporarily re
tiring United States Bonds ~ aforesaid bu
the said Notes shall not be used for any othe
purpose, nor shall the whole amount 0
United States Legal Tender Notes, including
those which may be held in reserve ant
those which may at any time be held in tn
United States Treasury, sub. Treasures ant
Depositoriss exceed four hundred million
Of dollars, until expressly authorized by law
The rate Of interest which money com
manded on ample security during the win
ter Of 1872 1873 in New York city reaches
and exceeded the rate Of S-4 Of one pc
cent. per day, which is equal TO the enor
nous rate Of 273 3-4 per cent. per annum
During the summer Of 1873 common rat
Of interest at the same place on like secu
rites was per cent. per annum. Here !
difference in the rate Of interest Of "a
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