The Fremont weekly journal. [volume] (Fremont, Sandusky County, Ohio) 1867-1877, 1874-04-03

FREE BANKING
Repeal the Clause in the National
Bank Act Limiting Circulation
A Self-regulating Currency,

"A Seu-IegulaL1nS currency.
DETROIT, Mich, Mar. 16, 1874
! To the Editor of the Inter Ocean.
| SIR.-Dec. Is, 1869, I wrote and
published in the Port Huron Press
a letter, the first sentences of which
were the following '1t is unneees-
sary to prove there is a scarcity OF
money in our country to-day, and in
consequence thereof there is much
trouble in financial affairs. The
whole business of the country suf-
fers, great enterprises are cramPed,
many manufacturing establishments
are stopped, throwing large numbers
out Of employment. Men in all the
departments Of commerce are pre-
pairing for q storm, and retrenchment
is everywhere the order of the day.
True, retrenchment is always a vir-
tue to be prscticed, but the extent
to which the leading commercial
men in all our great money centers
are carrying it betokens an unhealthy
condition of affairs. In q word, we,
as people, al terribly hard pressed
for money. All men are naturally
interested in seeking the causefor it. +"
With singular unanimity, singu-
lar if they were wrong, the people
assigned for the trouble then exist
ing lack of current money, a lack
of the means with which to do the
business of the country ; they de
manded, as a remedy, a large sddi-
ton to the volume of the currency.
Congress needed the demand, reluct
antly then as now, and passed the
ect Of July u, 1870, permitting an
addition of fifty-four millions of dol
lars to the national bank circulation.
This amount went into circulation.
But the country experienced no
shock. Indeed, 50 inadequate, even
then, was that meager amount to
meet the wants of the business inte-
rests of the country, that we scarcely
felt the change, and very much
doubt that unless a man knew of the
passage of the act he would not be
able to tell from the condition of
the country If there had been any
increase of the currency. Since July
II, 1870, the financial interest Of the
country have been tightening up
from day to day. This was newt
able considering the marvellous
growth of the country growth
substantial, permanent, necessary,
that is unparalleled in this or any
other country. With the amount Of
money thus fixed, and with such 81
growth, the financial reYulsion of
1878 was inevitable, was a natural
and logical sequence. The act of
July II, 1875, only postponed this
revulsion, it did not remove its
causes. In a speech at Greenfield,
during the last Presidential cam
paign, 1 openly advocated a reissue
of the $44, 100000 retired legal ten
ders, and the repeal of the 22nd., sec
ton of the national banking law as
the only means Of enabling the coun-
try to pass through the ordeal with
out a financial crisis. Had Congress
one year ago have done this, frm-1
ly believe the financial revulsion of
1873 land which is not over yeti
would never have been. Money,
like everything else, is governed by
the law of supply and demand. In
terest is the price paid for money,
and the rate of interest or the
amount paid for the use Of money is
determined by the quantity Of
money in the country. In support
of my views on the subject, 1 cite
and adopt as my own, the language
of Blackstone in his commentaries,
marginal page 456, second book.
We see that the exhorbitance or
of interest for money
lent depends upon two circumstances
the Inconvenience of parting with |
it for the present, and the hazard of
losing it entirely. The inconveni- |
enee to individual lenders can never
be estimated by law the rate there
fore, Of general interest must depend
upon the usual or general inconve-
nienee. This results entirely from
the quantity of specie OF current
money in the kingdom for thet
more specie there is circulating in
any section, the greater superhuity
there will be beyond what is neces-
sary to carry on the business Of the
exchange and the common concerns
of life. In every nation or cOmmu-
nifty there is certain quantity of
thus necessary, which per
son well skilled in political arithme-
tic cmightperhaps calculate as exactly
as private banker can the demand |
for running cash in his own shop Il
all above this necessary quantity |
may be spared or lent, without much |
inconvenience to the respective |
lenders, and the greater this national
is, the more numerous
will be the lenders, and the lower |
ought the rate ofthe national interest
to be but where there is not enough !
circulating cash, or barely enough,
TO answer the ordinary uses of the
public, interest will be proportion
ably light. for lenders will be but
few, as few can submit to the incon-
venience of lending"
After speaking further of this sin
and hazard" Blackstone
adds: of the quantity of specie
n a nation be such that the general
inconvenience of lending for a year
S computed to amount to three per
,ent., man that has money by him
sill perhaps lend it upon a good per-
Jonal security at five per cent, al
owing two for the hazard run; he !
viii lend it upon landed security or
mortgage at 4 per cent, the hazard
,eing proportionately less; but he
will lend it to the State, on the
of which all his proper
y depends, at 8 per cent, the hazard
,eing none at all"
VIII it be said, in the light of our
present condition, that we have now :
n this nation "this necessary guam )
ity of money, current money, to an
iwer the ordinary uses of the pub !
icF" Have we such an amount of !,
.urrent money as that it is "beyond :
What is necessary to carry on the
business of exchange and the com
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