The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1873-11-17
rHE CURRENCY QUESTION.

question of currency and the present strin.
gency in the money market, ia which
much that he says is true, and not little
entirely erroneous, if not absurd. In the
article now before us, he seems to think
that the way to avoid further CON
traction and stringencv in the money mar
ket is for the government to contract and
make it even more stringent than it
already is. This is TO remedy the
evil on the homeopathic principle that like
cures like, giving the medicine in allopath:c
doses. But the writer mistakes the homeo-
phatic principle. 1T is like that cures like
Simitia sinaihbus-an not the same that
cures the same. Administering greenbacks
in homeopathic doses Won cure plethora
of greenbacks, any more than the with
drawal of them in any quantity, however
nfntessimal, will remedy their stringency.
The bite is cured by the hair Of the dog,
ard not by another bite. In other words,
stringency in the money market is not
remeded by any additional stringency,
as the writer supposes, but by some similar
system of credit, like convertible bonds,
with power Of substitution, as the cond-
ton of the suffering patient may require.
The writer also mistakes the functions
Of paper money, SO called. The office of a
bank ct circulation land the government
treasury is acting as such bank at the
present tine) is simply to lend its credit.
Its paper is not substitute for money. but
simply substitution in use of it. 1t is
neither subordinate nor subsidiary
species Of currency; for it wants the
essential elements of permanency, dura-
bility, uniformity, etc., which the COM
modify fixed upon by law as the standard
of value must invariably have in order to
measure or represent all other values. lit is
only substitution IN use, not substitu-
ton in fact, and amounts to nothing more
than paper note payable on demand or at
some future time, and merely represents
the credt of the institution or the govern
lnent which issues it. Like any other note,
or check, or bill of exchange, or other
devise for economizing the use of money, it
has its value only in what it represents-in
the credit Of the state, or the individual or
corporate parties, issuing it as substitu-
ton IN use of money.
The first and most indispensable requi-
site of bank paper or greenbacks is its
conpertibtAty--not into itself, (Which is an
impossibility,) but into that which it repre-
sents, or which, upon its face, it promises
to do. There is obviously no such condi-
ton attaching to gold or silver as the es-
tablished currency of the country. One
dollar in gold is not convertible into anoth-
erof the same metal, nor one sovereign
into another sovereign. They bear no re-
latlon to each other, but have, or should
lave, fixed or nearly immutable relation
to everything elsa which is susceptible of
exchange. Their Office is to represent or
express all equivalent values in exchange
able products and, hence, they constitute
in their office the true medium of exchange
With this distinction between bank
paper. or greenbacks, and gold and silver,
as the established currency of the country,
it will not be difficult to see the precise
office Of each, nor will the reader fail to
comprehend how the greenback accumu-
lations in the vaults of the banks, in the
shape of bank reserves so called, as well
as the forty-four millions of government
reserves, can be made the basis fuse, in |
the event of great monetary stringency,
such as is now experienced in the financial
and trading world. To put out these ac-
examinations and reserves, both of which |
are thoroughly guarded by govern
ment securities, is the only way to coun-
teract the effect of hoarding-the first
thing that always occurs, whatever NAV |
be the circulating medium, the moment
there is financial panic, such as fell upon
Wall-street after the failure of Jay Cook
Il Co., and other speculative operators in
the paper obligations of the government
and of the national banks.
The true financial condition of the coun-
try at the present time is substantially this
We are all up in paper balloon, and
pretty good way out at sea. We have thus
lar dritted along so pleasantly with the
.rade winds that we have become quito
OF our balloon, imagining it
he most economical if not the safest
node of monetary conveyance. All at
'nce, however, we discover the peaks of
lenerif looming up before us, with the
certainty of our being violently dashed
gainst them, unless we initiate our balloon
to carry US safely over. and
axe our chances of touching terra frmo
somewhere beyond. We have the means
y additional initiation at hand, and can
EASILY use it, but the commander of the
inanclal craft says, "No; additional ipfla-
ION Is not what is wanted.o And so VIC s
ontiact the dimensions of our balloon !
trusting to change in the at !;
aospheric currents to save US. Tn the :
1panfipa tpad drift