Northern Ohio journal. [volume] (Painesville, Ohio) 1872-1896, 1873-12-06

Lesson, and provide by wise and well
considered legislation, so far as it lies in
your power, against its recurrence. and
to take advantage OF all benefits that
NAV have accrued. NV own judgment
is that, however much individuals may
have suffered, one long step has been
taken towards specie payments; that we
can never have permanent prosperity
until a specie basis is reched, and that
specie basis cannot be reached and MAIN
tanned until our exports, exclusive of
gold, to pay. for our imports, interest
due abroad and other specie obligations
are so heavy as to leave an appreclable
accumulation of the precious metals in
the country from the products of our
mines.
SPECIE AND CURRENCY.
The development of mines of precious
metals during the past year, and the
prospective development; If them for
years to come, are gratifying in their
results. Could but one-haif of II gold
extracted from the mines be retained at
home, our advance toward specie pay
ment would be rapid. To increase our
exports, sufficient currency is required
to keep all the industries of the country
employed. Without this, national as
well as individual bankruptcy must en-
sue. Undue imitation, on the other
hand, while it might give temporary re-
lief, would only lead to imitation of
prices, the impossibility of competing i'll
our own markets for the products of
home skill and labor, and repeated re-
| newals of the present experiences.
Elasticity to our circulating medium.
therefore, and just enough of it to
transact the legitimate business of the
country, and to keep all our industries
employed, is what is most desired. The
exact medium is specie, the recognized
medium of exchange the world over.
That obtained, we shall have curren-
cy of an exact degree of elasticity. IL
there be too much of it for the legiti-
mate PURPOSES of trade and commerce. it
will flow out of the country; if too little
of it, the reverse will result. TO hold
what we have, and to appreciate our
currency to that standard. is a problem
deserving Of the most serious considera-
ton of Congress.
THE CURRENCY SOUND.
The experience of the present panic
has proved that the currency of the
country, based as it is upon the credit of
the country, is the best that has ever
been devised. Usually, in times of such
trials, currency has become worthless,
or so much deprecated in value as to in
| fiate all the necessaries of life, as COM
pared with the currency. Every one
holding it has been anxious TO dispose of
it ON any terms. Now we witness the
reverse. Holders of currency hoard it
as they did gold in former experiences
of like nature.
| FINANCIAL NEEDS OF THE COUNTRY.
1 1t is patent to the most casual Obser-
yer that much more currency or money
is required to transact the legitimate
trade of the country during the fall and
winter months, when the vast crops are
being removed, than during the balance
of the year. Under the present system
the amount in the country remains the
same throughout the entire year, result
ing in all accumulation of all the sur
plus capital of the country in few CEN
ters, when not employed in the moving
of crops, tempted there by offers of in
terest on call loans. Interest being
paid, this surplus capital must earn this
interest paid with profit. Being SUBJ
ject to call, it can be loaned only in part,
at best, to the merchant or manufacthr-
er, for fixed term, hence no matter
how much currency there might be in
the country, it would be absorbed, pri-
ces keeping pace with the volume, and
panics, stringency and disasters would
ever be recurring with the autumn.
| AN ELASTIC CURRENCY NECESSARY.
Elasticity in oar money system, there
fore, is the object to be obtained first,
and next to that, as far as possible, a
prevention of the use of other princi-
pals money in stock and other species
of speculation. To prevent the latter,
it seems to me that one great step would
be taken by prohibiting the National
Banks from paying Interest on deposits,
!. by requiring them to hold their reserves
, in their own vaults, and by forcing
them into resumption, though it would
: be only in legal tender notes.
RECOMMENDATIONS FOR RELIEF.
For this purpose l would suggest fol
your consideration the establishment ol
/. clearing houses. To secure the former
{ many plans have been suggested, most
l if not all, of which look to me like in.
! flation, on the one hand, or compelling
l the government, on the other, to pay in
: terest without corresponding benefits
e upon the surplus funds of the country
D during the seasons when otherwise un
: employed. submit for your consider
D alton, whether this difficulty might no
l be overcome by authorizing the Secreta
: rv of the Treasury to issue at any tim,
: to nominal banks of issue, any amoun
: of their notes below fixed percentage
? of their issue, say forty per cent. upol
: banks depositing with the Treasurer o
= the United States an amount of Govern
: ment bonds equal to the amount of rate
o demanded, banks to forfeit to the gov
= ernment, say four per cent. on the inter
e est accruing ON the bonds SO pledget
# during the time they remain with TIN
n Treasury as security for the increase o
It circulation, the bonds so pledged to b
i redeemable by the banks at their pleas
d ure, either in whole or in part by return
e ing their own bills for cancellation to al
( amount equal to the face of the bond
e withdrawn. l would further sugges
e for your consideration the propriety 0
l. authorizing national banks to diminis
II their standing issue at pleasure by re
h turning for cancellation their own bill
l. and Withdrawing SO many United State
l. bonds as are pledged for the bills re
l. turned. In view OF the great actual con
re traction that has taken place IN the cul
IN rency and the comparative cOntractio
ID constantly going on, due to the inerea s
S. of population, increase of manufacture
Or and all the industries, do not believ
re that there is too much of it now for tn
g. dullest period of the year. Indeed,
E. clearing houses should be established
n thus forcing resumption, it is a questio
O. for consideration, whether bankin
~ ilOb UC tuduC 4ACC, dil et
le safeguards now required to secure bill
I'd holders ii any modification Of tt
to present laws regulating national banl
Mt and a further step toward paying for T.
lg sumption of specie payment, invi
e, vour attention to a consideration of tt
propriety Of exacting from them the +
tention as Il part of their reserve, eithe
IN the whole or a part of the gold intere
ra accrniug upon the bonds pledged as 8
~ curity for their issue. l have not r.
an tiected enough OH the bearing this mig
If have in producing q scarcity of col
at with which to pay duties on imports
or give 1t my positive recommendation, b
;s your attention is invited to the subject.
th During the last four years the curren'
.ss rhas been contracted directly by the wit
no drawal of three per cent. certificate
20. compound interest notes and 7-30 bon
10. outstanding on the 4th of March, 1Se
.y- all Of which took the place of the leg
he tenders in the bank reserves to the e
ost tent of $63, ,OO0, 900. During the sar
period there has been a much larg
comparative contraction of currency
The population of the country has larg
", " increased, more than $4,000 miles
. il railroad having been built, requiring