The Richmond palladium. [volume] (Richmond, Ind.) 1855-1875, 1873-10-11

ference DetWecu THIS anu 0A OtuOi |
monetary revulsions in this country, I
in the circumstance that the currency
can not break nor fly the country, nor
cause any run for redemption, nor any
necessity to contract the issue; and
that the whole volume Of currency re-
mains unimpaired, and will be the
medium of payments and the measure
of values as before There is no run
on the banks for the redemption Of
their notes. There is no return Of
Treasury notes to the Treasury for
redemption. There is no loss Of con-
6dence in the currency. 1t pays every
debt the same as before. There is no
rejection Of currency payment by credi
tors, and demand for specie. The
money is all in existence, and will full
fill all it's functions, if holders will
only keep it moving
To give some idea Of the Wilderness
of this difference, we refer to some
facts of former panics. In those the
first loss Of confidence was in the
ability of the banks to continue specie
redemption. This compelled them to
suspend. The most imperative ne
cessity Of the banks was then to pre-
pare to resume specie payment. This
made them keep their own notes, as
fast as they came home in payment of
loans, and this made contraction Of
currency. The first effect of suspen-
sion was not SO severe as that from
the subsequent contraction by the
banks to make specie resumption pos
sible. And SO they made both con-
traction of loans and contraction Of
currency, which doubled the conse-
quences Of the revulsion.
In the suspension Of 1887, which !
came upon great bank note imitation,
part Of which was Of banks bottomed
on real estate or on nothing, more
than half Of the currency was extin
guished by total failure. The rest !
was SO distrusted that the right to de- |
nand specie for debts was widely put |,
in practice. In 1886 the circulation.
according to Treasury statistics. was |
$149, 100000. We have not the figures
| of each years circulation, but in 1S43,
after the country had had six years to
recover. it was but So millions. More !
than half of the paper currency was
! finally extinguished.
/ All the other effects of suspension
of payments of deposits and cont-ac-
ton of bank loans were in addition to
this. The loans and discounts in 1886
were 457 millions. These were sub
ject to the consequences Of the de-
I, struction Of more than half the bank
capital and currency.
That was the greatest crash this or
any country ever had Values had to
go down to the hard pan of specie.
And at that time the means of trans
portation in the interior were small,
and the great foreign demand for the
agricultural products Of the North
had not yet begun. Cotton was about
all that foreigners wanted Of us.
| The panic Of 1857 was but small
affair in comparison: yet it caused a
sharp contraction Of the currency, as
we'll as OF bank loans. The bank cir
culation Of that year was $214, 1882
In 1888 it had been contracted to
1855, 3O8, 344. 1t was a contraction Of
more than 69s millions in one year,
being near % per cent. of the paper
currency. Bank currency contraction
g forces the contraction of bank loans
and discounts. The contraction of
these in that year was from 1854, 456, :
900 to 1868, 1855 600, being quick cur
tailment of $l3l POI 900.
3 This radical difference has an i'm
portant bearing on the bank policy in
D the present suspension, and in giving
: ground for general confidence and
speedy resumption. Banks are exempt
! from the specie struggle. Values are
= secure against breakage or contrac-
.. ton Of the currency. The whole vol.
! ume Of money will be the measure Of
values, and the markets Of the great
products are SO fixed on a foreign de-
: mand that there can be no permanent
u decline. The banking business which
y is extended in the regular trade is or
y perfectly sound basis. There is no,
the slightest fear for the solvency o.
! such banks. The great products viii
hold their value, therefore there car
i be no falling out OF the bottom. AL
4 the facilities the banks extend now Il
Il ease the market will strengthen theil
own resources for resumption. There
fore in this revulsion the preventive
g or the remedy, is not the contraction
II Of currency, nor Of loans to real trade
70 but a judicious expansion of them
i and the recovery is much nearer a
= hand than it could ever have been il
suspensions upon a mixed currency o
q notes payable in coin on demand
- This essential difference is subiec
: to be thought of by bankers and til,
- whole business community.
I'll Credit is always expanded. Nv,
have before shown that the cash OIL
hand in Lombard street is but TIL
fraction OF II 3 per cent of the amour
y Of deposits due on call. That is on
e coin basis Yet multitude Of PEG
l. ple-including the Chicago preacher
/ ARE talking as If because credit i
% expanded everything is rotten an,
must collapse The volume of none
. is the measure Of expansion Of creai,
m The expansion in New York was no
a greater in proportion to the volume G
u money, before the panic, than it was
a year ago. The prices Of stocks wer
I not higher in proportion. On tn
~ other hand. general trade was NOR
healthy. Our exports Of produce wer
much increased. The future deman
Of for our breadstuffs promised to b
ID doubled. Our imports had decrease,
D. Tho balance was growing better
re There was no cause for collapse. Tn
nc money market could have carrie
IN along the real consequences Of tn
failure OF Jay Cooke u Co. The col
Of lapse was caused by an unreasonin
a panic in New York in which bank
v capitalists, dealers, and people went I
as locking up money Everybody at ono
ca distrusted everybody and everythin
r. but money.-CinciDnati Gazette. r