Connecticut western news., 1873-12-12

owing to the imposslbiliGy of competition ID li, 9rr own markets for the products, of home. Skill ana labor and repeated renewals Of pres ent experences, elasticity to our circulating medium, therefore, and just enough of it to transact the legitimate business of the country, ana to keep all industries employed, IS what IS most to De desIred.
 The exact medium Is specie. the recognized medium of exchange the world over. That obtained. we shall have currency of an ex- act degree Of elasticity. If there be too much of It for the legitimate purpose of trade and commerce 1t will flow out Of the country IT too little the reverse will result To hold what we have, and to appreciate our currency to that standard. IS problem deserving Of the most serl us cOpsideration of Congress.
 The experience of the present panic has proven that the currency of the country based as 1t IS upon the credit of the country, IS the best that has ever been devised. Usually, Tn times of such trlals the currency has become worthless, or so muon depreclated ln value os to lnflate the values of all the necessarles of life as ompared with the cuIreucy. Every one holding It has been anxious to dispose of It on any terms. Now we witness the reverse. Holders Of currency hoard if as they dId gold It ls patent to the most casual observer that mncn 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. With our present system. the amount in the country remains the same throughout tine entire year, resulting in on accumulation of all the surplus capital of the country ln few centres when not employed
 
 offers Of interest on call loans, interest bclug paid, this surplus capital must earn this Inter est paid with profit. Beng subject to call !" It cannot be loaned only in part at best to the merchant or manufacturer for a fixed term i; hence no matter how much currency there mlght be in the country it would be absorbed, pan1cs, stringency and disasters would eveI be recurring with the autumn.
 Elasticity in our monetary system therefore IS the object to be attalned first, and next to that, as far as possible, a prevention of the use ot other peoples 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 10 hold their reserves in their own vaults and by forcing them into resum ption, though 1t would be only in legal-tender notes.
 For this purpose would suggest the estab' ation. To secure the former many plans nave been suggested, most if not all of whlch look to me more like 1nf1aGiOn on the one hand, or compelling government on the other to pay 1n- terest without corresponding banefits upon the surplus funds of the country during the seasons when otherwise unemployed.
 submit for your consideration whether this difficulty might not be overcome by authorlz Ing the Secretary of the Treasury to issue at any time to the Rational banks of issue any amount of their notes below a fixed percent age ot their issue, say forty per cent. upon the banks depositing with the Treasurer of The United States an amount of government bonds equal to the amount of notes demand ed ; the banks to forfeit to the government say four Der cent. of tue interest accruug. or the bonds so pledged during the time they re- main with the Ti easury security for the h. creased clrculaClon. The bonds SO pied ged to either in whole or ID part. by returning their own bills for cancellation to an amount equal to the face of the bonds withdrawn.
 I would further suggest for your consldera- ton the pioprlety of authorizing national banks 10 diminish their standing issue at plea sure by returning for cancellation the1r own bonds as ase pledged for the biiis returned.
 In vIew Of tne great actual con nIractlon that has taken place in the currency aud the com parative contra ction continuously gong on, |, due to the increase of population, increase of manufactures and all the industries, do not believe that there IS too much of It now for the dullest perlod of the year.
 THE BANKS
 Indeed If clearing houses should be estab- iished, thus furcE 2 redemption It IS question tor your consideration whether banking should poJ be made free, retaining all safegual us HOW required to secure blllholders. In any modlfi- eaton of the present laws regulating naJlonal banks as further step towards preparing for resump ptlOu of specie pay ments, invite your attention to 8 consideration of the proprlety Of exact1ng from them the retention as a part of their reserve either the whole or a part of the gold interest accruing upon the bonds pledged as security for theIr issue. have not have In producing scarcity of coin with which to pay duties on Imports, to give 1t my positive recommendation, but your attention IS invited to the subject.
 THE CONTRACTION OF THE CURRENCY.
 During the last four years the currency has been contracted drecty Sy une wlIndra ~aa or notes and 7.30 bonds outstanding on the 4In or March, 1869, all of which LOOK the place or le- gaLtendcrs in the bank reserves to tne extent of stxIv.tbree million of dollars. During the same period there has been much larger com paratve contraction Of the currency. Ihe population of the country has largely iocreas- ed, More than twenty-five thousand mlles ot railroad have been built. requiring tne acElve use of capital to operate tnen. Mi!!ions o' acres of land have been opeped 10 cuitlVatlon. recurring capital to move the products. Man. ufactor1es have multiplied beyond all pfece dent in the same period Of tlme.req uitlng cap ital weekly for the payment or wages ana Tor the purchase of material; ana propaDiy tle largest of all com paratlve contraenons arises from the oraniZinR of free laOor III o'ie 10, soutno
 Now every idborer there receives ms wages. and for want of savlngs banks tne gfeaIer part of such wages is carried Ill Lne pocRet, or boarded until required for use. amese susges on without any recommeDdatlon tnaI they shall be adopted literally, but hoping that the pest an elasticity of the currency .s will keep employed all the industries Of tDe country and prevent such au lnflation as Will put OH indefinitely tue resumption of specie pay ments, an objeot so devoutIy to be wished for by all, and by none more earnestly shan Dy the class of people most interested, those who earn their bread by the sweat or tnelr brow.
 The decisions of Congress on th,s subject will have the hearty support Of the Execu' tive.
 sHIP-BULDING.
 Tn previous messages have called attention to the decline ln American shlo-bullding, aud recommended such legislation as would secure Stimulated by high rates and abundance of freight, the progress for the last in shudng Sa. has nsen been crease of about three per cent. ID the amount transported in Amerlcan vessels over the amount of last year. With the reduced cost of material winch has taken place, 1t may rea- scnably be hoped that thls progress will be maintained and even increased. However, as we pay about eighty million dollars per annum to foreign vessels for the transportation of our surplus products to market, thus increasing the balance of trade against us to thls amount, the subject is one worthy of your serious con- slderdtlon.
 CHEAP TRANSPORTATION.
 "Cheap transportation is a subject that has attracted the attention of both producers and consumers for the past few years and has contributed to, If It has not been the direct cause of tte recent panlc and striDgency. As Congress at it's last session apDoInteda special committee 10 investigate this whole subject duting Inc vacation and report at this sesslon, I have nothing to recommend until thelr re. port Is read.
 THE CANALS.
 
 chatacter. In which the greater portion of the East and the West, the North and the South, are equally interested, to which I will in vite your attention. The State of New York has a canal connecting Lake Ere with the tide- water on the Hudson River. The State of Illinois has a similar work connecting Lake Michigan with navigahle water on the Illinois River. t0us making water communica tion in. land between the East and the West and South. These great artificial water courses are the property of the States through which they pass, and pay toll to those States, Would It not be w1se statemanshlp to pledge the these States that ii they will open these canals government will look after and keep in nayl- gable condition the great public highways with which they connect, to wit, the over slaugh on the Hudson, the Saint Clare flats and the Illinois and Mlssissippl rivers. This would be paJlOnal work, one of great value to the producers of the west and south in giving them cneap transportation for thelr produce to the seaboard and market, and to the consumers in the east in glvlDg them cheaper food. particularly Of those articles of tood which 0O not find d tOIeIgn market, and