New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-11-08
LETTERS FROM THE PEOPLE.
OBSTACLES TO RESUMPTION BY TIE GROWING
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OBSTACLES TO RESUMPTION BY TIE GROWING
| .r..ll rnis 0I 80 UP PROCESS" UHu.l 4tti
| 70 tie Editor OF The Tribune. csr,s
SIR The notion that we have grown up
TO the amount Of the currency has found
from no less an authority than me London Eeono"'
and has been adopted with considerable conndeoco W
some among ourselves In spite OF the weien' ~ o.
tbority In favor Of this opinion. am Distinctly u
opinion that 1t 10 incorrect believe that INC
has been misled by the strangeness OF tine
and has allowed itself to pronounce )poS~on ~ ~,
case with less than Its ordinary prudence oe"e,o
that such high financial authority "ou," =. 80 ,a,.
ate the differences hastily drawn here tna'' 'no
81 thing. were "A supposed the transition to oonvoi
ble currency would be smooth ana simp'e. ." ~ -
the interest attaching TO the subleot, Deg ''A'
certain suggestions which seem to me 10 DO pel."o
The question Of the value Of the currency Is tne CUES
zion NJ ts amount This TO be measured py inc rca"
ans of the country and these will DO shown ny the
Genera, rate OF prces not that OF gold only Inc most
conclusive proof that hayonot grown up 10 tne VOL
ume OF the currency tho fact OF the innsep PRICES
The amount OF the currency has been liked since 1901 ~
The actual circulation in 1850 was less than
s,oo 600 ooo gold and notes together II leave out In
eacn case tho amount which lay quiescen In bank ro
serves ScJ Now IL Is quite conceivable that while the
credit expansion and enhanced prices quickly swellod
I'D TO the $3.50 OF paper the Legitimate growth OF
the country In wealth and population should bring up
also the Of specie necessities By slower ad
vance, How far this latter movement has proceeded
is impossible estimate. IN general and in the
rough While the growth OF wealth and population would
tend to Increase the requirements OF circulating me-
dunn other influences have tended to check it. The eI
tension OF railroads has quckened tho circulation The
extension OF banking machinery the growing habit OF
using deposits and checks. the extension OF methods
analogous that Of the clearing house, have Gil tended
TO economic the OF These influences have
acted on both demands for money; on the credit
hat iaCit afa eIteei
ment which conceive to DO operating all the time
within and under the expanded paper. How far now
these opposing Influences affected normal re-
uuirement and at what figures IL now stands no ono cdn
tell. The only Investigation which could throw any
light upon would be investigation or prices tho
most delicate inquiry on which the economist can ven
ture. Generally speaking. slow and steady decline
since 1870 seems to bear that the credit expan
sion having reached the limit OF 5oooo)o In 1862 the
expansion OF the normal amount df begin 10 press
upon It. Tho report OF the gross amount OF ahnuai
clearngs published In The Financial Chronicle Tor Oct
49, bears witness TO such elimination OF the credit ex
pansion at that time.
IL this theory OF tho occult movements which have
been IN operation correct then would Indeed follow
that by waiting long enough. might come to point
at which the legitimate demand for currency would
equa the actual amount OF paper but what siae oi
things would immediately precede that perl0df III Is
evident that should have long aud slow contrac-
ton tending long time, Issuing at oVery pefou
of unusual demand for currency In crisis and panic
succeeded by ease followed soonas industry revived
ly new sringency. checking production, ana Slowly
reducng the business the country to stagnaton as
we found ourselves continually met and checked by inns
myserious counter Influence. Whether this movement
would not the growth OF the country ana hold the
normal demand for money permanently at point
within and below the paper limit Ia an interesting spec
uatioD.
IT, however, we assume that the proposed growth OF
the legitimate demand for currency up to the paper
limit Is possibility. and that it could on In such
way IA TO produce a smooth and easy transition Of
spece such movement must be marked by certain clear
phenomena As we approach tho limit. prices must
steadily fall to gold basis At the point OF transition
they must stand tnat basis Further expansion OF
the demand must bring specie into circulation and keep
Il there. importation OF gold must remain IN the
country. Even then however, Specie payments could
not be resumed Ii would be necessary to wait until tho
actual demand for circulation had Increased TO
5000 100000 1000 more al To provide Tor
sn lent specle 10 change the paper from an in
convertible into a convertible currency. -
The popular IN regard To this last point are es
pecialy noticeable IL paper and gold were on level
in purchasing power that Is IL all prices mot gold only)
we're on a specie bass II sufficient amount OF gold
could I've procured 70 provide redemption lot the paper
only ono OF two thins could DO done with H. 1t could
lie deposited 10 the Treasury as guarantee or the
circulation. In which the paper would have only
the character of assgHats or could DC Onereu ror tne
redemption and conversion OF notes on demand In ths
latter case IL would be added TO the Circulation woulu
depreciae the entire circulation wonld enhance prices
aud the gold would be exported again. W.
Nslc Hdrtn, Der. -, 1873.