The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-03-23
FINANCIAL and COMMERCIAL
LET US HAVE A MEASURE OF VALUE.
Free Banking as Substitute for
Conflicting Theories.
WALL STREET,

SUNDAY, March p, 1s74.j
rhe week which closed yesterday was marked
rs one OF the dullest periods the street has been
ever called upon to endure. From causes II not
wholly, az least largely removable by Congress q
state OF almost paralysis IN all the depart
ments OF trade, and the business OF exchange was
interrupted by the absence OF any standard OF
value. so much has been said on tins subject and
90 little heed paid TO it by Congress that II is like
work OF sIpererogation TO recount the arguments
which demand action. IL has been illustrated by
the familiar figure OF the yardstick in it's relation
TO lineal measure, as in that of the peck bushel
rs measure OF bulk. The possible consequences
OF an indeterminate variation OF the compass have
been also adduced TO give point to the discussion.
But nothing has been done, and to-day
BUSINESS SIMPLY DRIFTS
with every changeful current II encounters,
afraid TO set sail or get up steam with the view OF
steering in any particular direction. lest with the
impetus of deliberate motion IL might come upon
rocks to its imminent destruction, which encoun-
tered else might prove less harmful instructions.
1t rs worth while in this connection to looK into
the position which this question holds IN Congress.
1t presents Itself there in the shape OF three dis
tinct propositions all of which, however neces-
sarily involve one thing that has been pointed out
here before, viz. The legaliZation OF Mr.. Richard
sons act OF drawing upon the $44 000, 900 socaled
reverse; or other words the declaration that the
currency Of the country was not reduced from the
limit OF $400, OoO 90 by any previous egis.
lation. This may ce questionable law, but 1t
is absolutely necessary unless Congress would
impeaeh the Secretary Of the Treasury. lie either
had or he had rot the right TO touch that
x44 oo0 and with the issue Of the first dollar he
added the entire amount to the permanent circu-
faton OF the country. Congress must recognize
that right or else mpeach Mr. Richardson, because
If he had not the right he committed an offence
that should be punishable by impeachment. 1t
may be safely assumed, then that
THE FIRST LEGISLATION OF CONGRESS
In respect to the currency will be to legalize the
issue oil the $44 900 600 reserve, not with the pur
pose Of resting the legal tender issue at s44 100000
but as permitting further legislation. the ques-
ton will then have to be considered whether it
were best to return to the old limit OF $356, 100000
or, stopping short at The present figure OF
$685., 0o0, 900, cancel beyond the chance of future
reissue all above that amount. The difficulty III
the way OF retiring the s26 600 600 OF quasi legality
arises from the present stagnation of business,
which lowers the ratio of internal revenue re-
cepts, and so does not leave the Secretary with
any surplus TO be applied to that purpose Be-
sdes, the same stagnation reduces the customs re-
ceipts and so leaves him without any considerable
amount OF gold to sell, whereby he might get back
currency to retire. Looked at in purely practi-
cal light, aside from any theory whatever on the
subject it would though Congress would
be compelled 10 accept the existing measure
$3.50, OO0, OOo-as the limit for this year at all
events the gradual appreciation or these notes to
gold and the means to be adopted to bring about
that contamination being left to more prosperous
days. In this connection 1t is remarkable how
little need has been given by Congress to
THE DEMAND THAT HAS CONE UP
from the various suffering Industrial and COM
merclal interests OF the country in favor
OF free banking. And yet Tree banking
offers the maximum relief OF anything that
has yet been proposed with the minimum
OF risk in respect TO the arrangement OF the
domestic exchanges. There have been bills pre-
sented for the redistribution OF the currency over
which Congress has agonzed for months, with as
little prospect of ultimate good resulting there
from as If they were 20 order Old Probabilities TO
rearrange the thermal condition OF the Amos
phere. You cannot legslate currency into dis
trlct. The currency must be the outgrowth OF the
trade necessities Of the district And 1t is just
here that tree banking furnishes common meeting
ground for both innationIsts and contractionists,
buionsts and anti-buionists. Properly guarded
IN respect to redemption, bank expansion would
supply the necessary quality OF elasticity to our
currency which would make 1t reflect trade neces-
sites. When there was too much of 1t out IL
wonld be presented for redemption; when 1t was
not so presented, Ii would be because 1t was all
finding employment. II would be local because it
would gravitate around It's own redemption
agency, losing value a. 1t receded there ROM
Legal tenders at fixed limit wond furnish the
redeeming token, which, by a gradual process OF
substitution in the reserves, could be replaced by
gold, and bring us more rapidly to specie payments
than any other plan proposed. For thus we would
SUBSTITUTE THE TRADE COUNTER
for the government counter, and as the trade
counter was only the reelection OF trade
wants, and had behind it the scarcity OF cur
rent profits OF trade, while the government counter
rested solely upon the government endorsement,
10 would our currency the more readily assimllate
itself 10 actual value as exchangeable
quality free OF the euphemstic declaration that it
represents the credit OF the country, which is in
itself alsehood, as in reality such currency rep
resents only portion OF the debt. Free banking
even experiment only, offers the largest solu-
tlon OF the pending financial problem that
has yet been submitted. 1t is not sur
prising to find the present monopoly OF the
national banks arrayed against it. II would
OF course, reduce their profits, just as all
competition has a cheapening tendency. Yet
these very same banks that now oppose free bank
ing were only too glad to fail back upon the prin-
cipe involved in it during the panic to save them
selves from universal crash. The issue OF bank
certificates as currency, to supply the place
OF that which was hid away IN stockings
safe deposit vaults nothing more
nor less than the application OF one OF
the best features Of lree banking system
viz, the creation OF currency TO meet the require
ments Of the exchanges, so that credits may pass.
And the fact that these certificates had their birth
In a panic, time or universal dlstrust and
although possibly rendering each bank that issued
them liable to the forfeiture Of its charter, demon
strates how much better
BUSINESS Is ABLE TO TAKE CARE OF ITSELF
than Congress TO take care OF business Besides,
the rapid redemption OF these certificates alter
the panic was over, and before Mr.. Richardson
changed the situation into proracted meeting,
where the prayers, however are turned upside
down and have the melancholy appearance OF