Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-11-23
HOW TO GIVE ELASTICITY TO OUR
CURRENCY.
Editor Union and American.

Editor Union and American.
Among many objections urged against
our circulating medium, the best founed,
and most clearly apparent to every one, is
its want of elasticity. This serious defect
is admitted alike by both the contraction
lists and the so-called "inflatiOniStS. The
contractionists, however, urge the resump-
ton of specie payment as cure for not
only this, but all the evils that clog or in
terfere withthe harmonious workings of our
financial machinery. do not propose just
now to discuss the resumption proposition,
as it is certainly out of the question, even
assuming that it would accomplish all that
its friends claim, and which it would GER
tainly fail TO do, so far as giving us an elias
tic currency is concerned, for surely moth
ing could be more iReldStiC, as a circulating
medium, than gold. But, however, that
NAV be, it is as a remedy entirely beyond
our reach, consequently we must look to
other sources for relief; and relief we must
have. or else suffer the serious loss which
is wrought by the constantly recurring
spasms and panics.
Some of the first and ableSt tinanciers Of
the country have earnestly advocated the
proposition for an issue of interchangeable
bonds bearing a low note Of interest, and
convertible into greenbacks at the pleasure
of the holder, and then the right Of getting
bonds again whenever he may desire it. This
would work very well for the financial
centers, but would likely fail to meet the
wants of the people generally without Civ
ing considerable expense and serious incOn-
yenience, in converting bonds into green
backs or the latter INFO the former. | think
the greatly desired, and absolutely essential
end would be much more easily accom-
plished bv the issuance of ''circuldtiHg
bonds" of S25, $50, 500, and so on to $500,
bearing interest at the rate 4.S0 per cent.
per annum, but payable monthly. This rate
would make the money interest on S25 1Oc
or 2Oc on $50 and 40c on 500. The per
son holding a circulating bond" could, al
the end of the month, detach the coupon
and pass the bond at its face value, and the
common as fractional currency, the bond:
and coupons having been made a legal ten
der by law of Congress, just rs greenback'
now are. This element introduced into
our volume Of currency il would be regu
lated with unerring precision, for it would
contract and expand in obedience TO thu
natural law of supply and demand. II thu
supply was in excess of the Legitimate
wants of trade. the rate of interest woult
ruIe low and these circulating bonds wOul'
he retired by banks and capitalists anXiou
to secure the interest, and at the same TIM
hold an undoubted security that could b.
used whenever there was an opportunit,
for a more profitable investment or an un
expected demand. We would then hav
no fears of a spasm or panic when the sea
son arrived for moving the crops, for wit
the increase in demand for money the rat
of interest would be advanced, causing tn
circulating bonds 10 flow back again int
the channels of trade, thus increasing in
natural and healthy manner the volume {
currency TO an extent sufficient to NOV
without inconvenience the productSof tn
country TO their appropriate markets, an
10 handle all the legitimate trade OF I'll
country without inflicting severe and eS
cessiye strains upon the financial machine
~. ..,-,.,a
its actual value without being force
through the ''shrinking" process caused .
an ineiastic currency.
The active business season having paSSe'
these circulating bonds would find the
way into the vaults of banks and the poe
cts of the people. The banks Of the int
rior would prefer holding them, to sendiT
money to New York to get interest ON
during the summer months, and thu
would be avoided the accumulation OF ca
ital there. which would be sure to be Ell
Moved in promoting wild and perniciol
speculation in worthless stocks, ana u
usual stringency accompanying the VII
drawal of these funds in autumn would l
longer have 10 be borne, y.