, 1874-02-03
MI, TOHDEB ON THE CURRENCY.


Interested In commerce and railroads, has, at
tho request Of tho House Committee on Bank
Ing aud Currency, given his views on the subject
Of tho currency. h1r, Forbes thinks that tho
panic wna caused by locking up capital in promh-
turo Enterprises chiefly railroads, and that it
was groatly aggravated by tho " vicious systom :"
OF loaning the reserves Of country banks to tho
New York banks, which reloaned them at once
to Bpoculasors. The panic might have boon
avortod had Congress- carried into effect meas
uros Of resumption which they merely talked
about. For at Tho root Of tho trouble lay
tho redundancy Of currency. II tho coun-
try had not had too much paper, so much
of It would not have goue into rail-
road-building. Aud again, II the paper had not
boon redundant that Is, lad boon on q par with
gold, ,-tle news OF the panic would havo brought
us at once from Europe gold enough to supply
the demand. Currenoy peculiar to country can
bo locked up and kept locked up for days, but
tho worlds currency obbB and flows accord1ng to
the demand for it. country that uaos gold
and has been suddenly drained Of 1t will bo
flooded with 1t as soon as steam can bring 1t.
h1r. Forbes di8misses tho idea that
the way to extricate ourselves from our
presoat predicament is to issue moro
currency, by saying that the samo cauHes
would produce tho sano effects. Given, a
rlcthora Of currency, re know that wo shall
havo momsntary ease, speculation, Btringenoy,
smash. Helays down bis remedy as follows !:
First, Withdraw and destroy the so-callcd re-
serve of $44,ot0,000. II the money cannot we'll
bo raised by ta1,tion, get 1t by selling bouds.
Second, tako substantial aud irreuoca1le steps
to resume apecio payments. Tho procosa may
be slow, may bo ono Of several, but it Ia impora-
tive that It should be suro. The plan suggested
by tho Hon. H. L. Piosco seems to Mr. r. the
bost one. It provides that Government shall
exchange tho existing groonbacks for new
ones, payable in gold two years from
,lato Of issue. Either s3,000,000 Or
$4,000, 600 Of the new noten shall be
Issued every month. II tho 100000 rate ia
chosen, $500, ,ooo, 600 Of the present greonbacka
would bc paid OF in eight yoars. It ia thought
that thoromaindcr would then be atpar. 1t not,
the process can 60 on till the final remainder
is equal in value to gold. This systom is re-
garded as both gradual and suro.
Tho principal Victims Of auotuating ctr.
rency are, among classes. tho lsborer; and. among
SECTIONS, tho South aud Wost. Tho laborer Is the
" residuary lcgatee OF all tho blundors Of oul
gambling system" His class is the larges.
creditor, and is therefore exposed to most loss By
depreciation in the currency. Ho cannoi
speculate. 'sPrices fall for him 1ates
while thoy rise soonest" And Mr. Forbet
might have added that wages fall for him soon
est, while thoY rise latest. The stoadier IN in
duntry is, the moro it suffers from an unstead.
currency. Agriculture is tho feature Of th'
West and South. It's products arc sold on a golt
bnsis for the price at Liverpool regulates th'
prico at New York. The articles tho South ant
West got in exchange are paid for in prices basel
on papor, which are from 20 to 80 per cont high
or than tho paper equivalent OF a gold price
This is tho substance OF what Mr. Forbes has tt
say. The reports Of tho Banking ind Currenc,
Committee indicate that some Of his views car
ried conviction With them.