Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1873-12-10

heed the lesson ard provide by wise and well
considered legislation, as far as it lies in your
power, against its recurrence, and to take adj
vantage of all of the benefits that may have
occurred. NY own Judgment is that however
much individuals may have suffered, one long
step has been taken ward specie payments !;
that We cannot have permanent prosperity I'M
til an entire new basis is reached, and specie
basis connot be reached and maintained I'M
til our exports, exclusive of gold, pay for
our imports and interest due abroad and
other speculations so heavy as to leave an &C
cumulaiions of those metals in our country
from the products OF our mines. The
development of mines of precious metals dur
in the past year, ana the prospective develop
ment OF them for the year to come, are graft
flying IN the extreme. Ii but half the gold ex-
tn acted from the mines should be retained at
home our advance towards specie payments
would be rapid. To increase exports sufficient
currency IS required to keep all the industries
of the country employed; without this, ma
tional IS well as individual bankruptcy must
ensue. Imitation, on the other hand, while
it might give temporary relief, would only lead
to an imitation OF prices. The impossibility of
competing in our market for produce, some
still labor and repeated renewals Of exper-
fences elasticity to our circulating medium ;
therefore enough OF it to transact the legiti-
mate business eff the country and to keep all
industrious employed, is what is now desired.
THE EXACT MEDIUM.
Specie is the recognized medium of ex
change the world over that obliges that we
shall have currency of an exact
degree of elasticity; If there be too much OF
it for the legitimate purposes of trade and
commerce, it will flow out of the country if
too little of 1T, the reverse will be the result.
To hold what we have and appreciate our
currency to that standard is deserving of the
of,cfr Of Ts,a
experience of the present panic has proven
that the currency OF the country, based rs 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 80 much de-
preciated in value as to initiate the value OF
all the necessaries of life as compared with
currency; everyone holding it has been anx-
ious to dispose of it on any terms, and now
witness the reverse-the holders of cur
rency hoard it as they did gold on former ex-
perence of like nature. 1t is patent to, the
most casual observer 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. With the
present system, the amount in the country re-
mains the same throughout the year, result.
ing in an accumulation of the surplus capital
moving of crops. Tempted then by offers of
interest being paid, the holders of this capital
loan it out. This surplus capital must
earn this interest and pay a profit.
Being subject to call, it cannot
be loaned, only in part at best
to merchants or manufacturers for a fixed
term ; honce, no matter how much currency
there might be in the country, it would be
absorbed, the prices keeping pace with the
volume ; or panlcs, Stringency and disasters
would ever be recurring each year, owing to
the elasticity IN our money system. There is
this object to be attained first, and next, as
far as possible, a prevention OF the use of
money in stock and other species of
speculation. To prevent the latter it seems
to me one great step should be taken by pro-
hibiting national banks from paying interests
on deposits, by requiring them to hold their
reserve ID their own vaults, and by forcing
them into resumption, though it would be
only in legal tender notes for this purpose
would suggest the establishment of a clearing
house for your consideration. To secure the
former, many plans have been sug-
gested, most OF which look to me
like an imitation on the one hand,
or compelling the Government on the other
hand to pay interest without corresponding
benefits UPON the surplus funds of the coun-
try during the seasons when otherwise unem-
ployed. [ submit for your consideration
whether this difficulty might not be overcome
by authorizing the Secretary of the Treasury to
issue at any time to nominal banks OF issue any
amount of their notes, below fixed per cent,
of new issue, say 40 per cent, upon the banks
depositlng with the Treasurer of the United
States an amount o. government bonds equal
to the amount of notes demanded ; the banks
to forfeit to the Government say 4 per cent.
on interest accruing on the bonds so pledged,
during the time they remain with the Secreta-
~ OF the Treasury as security for the increase
of CIR Aft la6o
to be redeemable by the banks at their
pleasure either in whole or in part By return
ing their own bills for cancellation to an
amount equal to the face of
the bonds withdrawn. would
further sugges'i for your, consideration
returning for cancellation their own bills and
Withdrawing so many U. S. bonds for the
bills returned. In view of the great actual con-
traction that has taken place in the currency
and the comparative contraction constantly
going on, due to the increase of population,
the increase of manufactures and all the in
dustries, I do not believe that there is too
much of it now for the dullest period Of the
year. Indeed, if clearing houses should be
established, thus forcing redemption, 1t Is a
question for consideration whether bank
ing should not be made free, retaining
all safeguards now required to secure bill
holders. In any modification of the present
laWS regulating udblO0dl DdllhS, anu Il IuTtueT
step towards preparing for resumption OF spe-
Gle payment, l invite your attention to con-
sideration OF the propriety of exacting from
them the retention, as part OF their reserve.
either the whole or part of the gold
interest aecruing upon the bonds
pledged as security for their issue.
| have not reflected enough on the bearing
this might have IN producing a scarcity Of
coin with which to pay the duties on imports,
to give it my positive recommendation, but
your attention is invited to the subject. Dur
ing the last few years the currency has been
contracted directly by the withdrawal Of three
per cent. certificates, composed of interest,
notes and 7-30 bonds outstanding on the 4th
of March, 1869. all Of which took the place of
legal tenders in the bank reserves to the eX-
tent of $63, 000, 900. During the same
period there has been much
larger comparative contraction of the cur
rency: the population of the country has
largely increased more than 5000 miles of
railroad have been built, requiring the active
use of capital to operate them : millions OF
acres OF land have been opened to cultivation,
requiring capital TO remove the products
manufactures have multiplied beyond all pre-
cedent in the same period of time, requiring
capital weekly for the payment of wages and
for the purchase OF material, and probably
the largest Of all comparative contraction
arising from the organizing of free labor in
the South. Now every laborer there receives
his wages, and for the want Of savings banks,
the greater part OF such wages is carried in
the pocket, or boarded for future use. These
suggestions are thrown out for your consid-
GRAFTON without any recommendation that
they shall be adopted literally, but hoping that
method may be arrived at to secure such
q elasticity of the rurrepcy will Eoon am