National Republican., 1873-12-04
TuR IABORs OF CONGRESS ON
FINANCE.


TuR LABORs OF CONGRESS ON
.r FINANCE.
The membcrsof both IIouscs have begun |
worl: nr though they really intended to do
something for the relief Of the dlstresscs OF
the people. Numerous bills have been intro
duccd looking 70 the restoration Of the public ,
confidence in the currency and banking busi- =,
ness Of the country. All the troubles now
complained Of are traccable to the recent
panic, and that panic was simply the demon |
stration Of want OF confidence In the banks |
and bankers Of the country. This panic was
prccipitated by q temporary scarcity OF money |
Just about the time that the most currency |
was needed for the transfer Of the crops from |
the interior to market, from the producer to |
the consumer. The people took the alarm
at tho failure Of q single private banking
house and one national bank, withdrew their
confidence momcntarily from oil moneyed
institutions and boarded their funds at home.
But, our national banking system having
withstood the test, reason Is now returning,
and these funds arc again seeking circula-
tion in the community, and 1t Is found that
there Is quite as much currency In the coun-
try now as there was before the panic oc-
Surrcd.
This experience has shown Congress that
money is scarce or plenty according as there
Is disposition to hoard It. Really, q clrcu-
lating medium is good for nothing to hoard. |
II earns nothing. II Is only when passing
from hand TO hand, In the liquidation OF
claims or bills, that 1t becomes beneficial. |
Therefore the exact amount OF the circulating
medium necessary for the proper transaction
of the business Of the country depends en-
tirely upon the rapidty with which 1t speeds
on Its way in the liquidation OF debts and the |
length Of time that 1t Is detained in the hands |
Of receivers, whether they be individuals,
bankers, banks or the Government before 1t |
Is again started on its natursl mission. 1t |
should also be recollcctcd In lcgislating upon
this subject, that rcmittances are made in |
these latter days by railway and telegraph
about teh times as rapidlyas they were thirty |
years ago, when the mails were carried by |
stage coaches, and were the most speedy |
means of communication. Consequently the |
amount of circulation per capita necessary to |
tae proper transaction Of the business Of the
country, in these days Of cash payments, and
with currency equally good in oil parts of
the nation, saving discounts and exchange
amounting to some millions annually, Is not
nearly as great as formerly. But at the
same time the large accession of four mil
lions OF population in the persons Of emanci-
pated slaves, who rs freedmen became re-
sponsiblc users of currency on their own ac-
count, added consider ably to the collective
necessity. II our forty millions of popula-
tion give eight millions Of families, each of
which requires on an average one hundred
dollars of the medium for the purpose Of
cffecting exchanges between the product Of
labor and means Of subsistence, 1t is found
that in round numbers we require eight hun
drcd millions Of currency as the whole vol
nme. The laborcr who receives ten dollars
per week makes that amount effect his ex-
changes, while the sixteen hundred dollar
clerk requires thirty dollars, and so on ac-
cording to the amount Of business transacted
by different individuals. From this 1t will be
seen that IL Is the credit system that bcgets
The supposed necessity Of large volume Of
the circulating medium. Cash trade Is more
lively, and keeps money moving from hand
10 hand In small sums rs necessities arise.
When the consumer pays cash for his goods
he enables the merchant to constantly rc-
plcnish his stock. The result Is that the re-
taller for cash only suffers no loss from
lad debts, and can turn over his little capi-
tai three hundred times annually. II he nets
only five per cent. upon each turn his capital
will yield him fifteen hundred per cent. per
annum, whereas the capitalist who gives
one months credit and suffers occasional
losses from had debts only turns his capital
over twelve times year, and should net one
I'm ftya M nj anh
turning to equal the fifteen hundred per cent.
per annum secured by the small trader re-
ferred to above. Tho transaction Of busi- |
ness on the credit system, therefore, |
requires a much larger volume OF currency
than on the cash basis, because 1t Ia necessa-
rily idle good portion of the time required
10 accumulate in sufficient sums TO meet the
large payments resulting from large orders.
While tho accumulation ia going on the
temptation is strong to invest in some out
side speculation, with the hope Of a safe re-
turn with large gains before the bills Of pur-
chose become due. Such expectations are
rarely realized, The capital thus diverted
from legitimate business produces embarrass-
mcnt, perhaps failure. A redundancy Of
irredcemable currency stimulates prices in
duccs speculation and imparts general de-
sire on behalf of large portion of the COM
munity to make haste to be rich by their
wits or luck, and without toll. Industry he
comes paralyzed with neglect. All principles
that apply to individual finance and
personal economy are equally applicable to
the economics and finances Of q nation. II
needs no wiscacre or sophist to devise ways
and means out OF our national dilemma.
Their plans oil tend only to mystery and de-
lusion. The man who has Hooded his COM
munity with duc.bills payable at conve
nlence can only maintain that circulation by
fixed system Of redemption. His cxtray-
agancc can be corrected only by rigid econ
omy.
On the question Of finance II is indisputa- |
bic that the President Is pursuing in spirit |
of honest, earnest, inquiry the right direc-
ton. He would avoid rulnous commercial |
rcvulslons by gradual approaches to the
specie basis. II his efforts and example are |
seconded by Congress in q like spirit the re-
suit win be to develop our system OF national
banking into the fullest scnse Of freedom
compatible with the safety of the material
interests of the country.