, 1874-07-04

renoy AZ roft ~ spoofc. aneo In times Of panic
both disappear, or exist only in insufficient quan-
titles. The results Of Apanlo ARC that everybody
clutches ut tho means Of payment, and It makes
no difference whether tho means Of payment arc
gold and silver oofns OF logal-tondor notoe,
thcro will not bo enough to 90 around. Agrcator
volume Of logal-tonlor notes viii mol help tho
mattor, ainco such greater volume will merely
intlato prices, causlbg everybody, whom the panic
comes, to owe two, throo, or four do1lars whoro
ho now owes one. Ills dobsa belng correspond
ingly increased. tho increase Of ourronoy will
avail nothing to provont d panic or to ward on
its effects. A suspension Of currency payments
will enBuo, proclaoly a. suspension Of spcolo
payments enaued IN 1857.
But there are sono manifest advautages in
spoclo ovor paper currency in times Of panic,
afnoe nc can always obtain srocla In any desired
quantity, up to tho limit Of our exportab1o prop
orty, from foreign nations. without causing an
undue influence Of prices-prtces Of oomnaodt-
tics bo!ng moasurod by the whole amount Of
coln-monoy In tho world, and not by tho amount
in any particular country. Thoro Is no auoh req
orvoir available to moot the oxigonoies Of panic.
whom tho business Of tho country IL on cur
rency basis. We do not overlook the fact thu.
in the September panic last yehr tho aoyor1,-
msnt did lsaue some $15,ooo,oo0 Of currency
that is, It bought In its own bonds to TINT
amount. Tho act Is now admitted to have boon
An unlawful ono, and to have been productive Of
NO good whateyor. Tho holders OF United statos
bonds were not tho parties roally in
poounlAry dietreAs at that timo. Tho
bonds, for which tho Govcrnmont ahovoa
out its groonbacks, wore the property
Of tho New York savings hanka. Thoro was no
run on these institutionB, but they sold thoir
bonds apprshendlpg run. Thoy 1ocltod up
their greonbaoka In the same cavorns from
which they lad takon their bonds, md the effect
Of tho operation On tho pauto, In tho aggregate,
Was nil. How would 1t hayo boon It gold, In
tho panic begau7 Merely this, that the boldora
Of the bonds would have sold them to private
persons for gold, instead OF selling them to tho
Government for paper. 1t might havo takon
fow days longer to sell them,-in Canada, En-
gland. or aermany,-but the result would hare
boon in no wiso different.
But, really the question our correspondent
puta to Us ia this Since q shors suspension Of
specie payments OCCURS about ouco In twenty
ycars, Is It not best to havs perpetual suspon-
when suspension OCCURS, 1t simply puts
US in tho aame plight we arc NOW In; orratler It
does not put In so bad one, sinse tho currency
seldom deprecIates moro than Or 8 per cent
under commercial panlo whereas 1t is now,
and has boon Tor long tlme deprecated moro
than 10 per cont. In 1867 tho currency dopro-
oiated, after the suspension Of specie payments.
about as much as bank cheoks sud clearing
house certificates depreotated in 1878 after the
suspension Of curronoy payments. The real
question being whether It is not wiser to have a
perpetual suspension Of specie payments than
temporary suspension onceln oyory twenty yours,
wa answer that, In our Judgment, II ia not.
It is wefl.knoWn fact that tie Scotch banks
have novor suspended spcclo payments. During
all tho suspensions Of the Bank Of England
the only prolonged ono having been caused by
tho aovornment aud enforced by act OF Par1ia-
ment-t1o banks Of Scotland continued to pay coin.
Tha shows that tl.ore ii no absolute necessity OF
= suspension Of specie payments inherent in tho
banking busincss-that q specie basis docs not
necessarily carry with It the constituents spocio
suspension. Il 1t asked why the Scotch banks
mover suspendod7 Because they are good bank
era. They do not carry large amount OF gold
coin in proportion to thoir liabilities, but they
understand thoir business bettor than other
bankers. Thoy watch tho courHo Of trade tho
aolyency Of their customers, tho state Of the
crops and the markots, aud thoy know thorough
II the habits Of their people. They know that
whom Scotland ia producing more tAan she con-
sumoa and Ia not incurring liabilities beyond hor
present means, q panio Is impossible. When
thoy find a contrary state Of things existing or
threatened, they curtal tholr own liabilities aud
apply tho brakes which 1t is always possible for
tho banks Of u country to apply II they begin In
eoaHon. TLoro aro some banks In New York
which did not suspend apecio payments in 1867
and would not have suspended in 1869 ii tho
Governments had not compelled thom to do 30 bJ
making deprecated currency legal tcnder.
We trust the timo is not far distant9when tho
various phantaams and hobgoblinB regarding q
spoclo basis shall be dispelod By An actual trial
Of it's merits It will bo found, when that time
comes, that thoro are no evils connected with
specIe payments Which arc not equally Inherent
In currency payments, while there are great ad-
vnntagos appertaining TO tho former which are
wanting in the lattor. among which may ho mon
tIoned stability, honesty, and justioe-threo
elemonts, without which any circulating medium
Is caricature and a juggle.
~--@--=
MUNICIPAL BONDS.
It has boon decided by tho Supreme Court Of
tho United States In the recent case Of Rees Us.
The City Of 1Yaterto,on that, whore tho officers
Of mupieipa! corporation oyado willfully tho OK
ecution Of Judgment against it, tue United
Courts haye no authority to levy tax to pay tho
indu,nent that although Court Of tho I1nited