The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1874-02-20

ness wants of this country? Mr.. Cal
houn, who always spoke after exhaustive |
research and reflection, in one Of his great
speeches on the sub-treasury, in 1887,
said: 0f
'sThe currency of country is to the |
community what blood is to the human |
system. 1t constitutes small part, but it |
circuates through every portion, and is in.
dispensable to all the functions of life.
What that proportion is, has not
been. and perhaps cannot be, accurately
ascertained, as it is probably subject to
considerable variations 1t is, however,
probably between twenty-five and thirty
live to one of the aggregate capital of the
community. | shall assume it to be thirty
to one. Vol. Ill of works, p No."
If thirty to one be the approximate ratio
between a country's aggregate property
and its circulation. then 5000, 600 is
not an inflated amount Of currency for the
: United States. The census of 1870 gives
the property of the Union ct thirty thou
sand millions of dollars, $3.50, O6s, 5l8, SOD.
This was nearly double what it had been
in 1860. So that we may safely esti-
mate the value of all property for
! 1874 at thirty-six thousand millions.
= At the rate of thirty to one, this would
! call for circulation Of twelve hundred
millions of dollars for the United
states. If we include bank deposits in
: what is termed currency, which are about
! six hundred millions, we have twelve hum
9 dred millions of currency in condition of
7 things demanding twelve hundred millions.
And if we leave fourth Of the bank de-
o posts out of account, as representing only
!. credit entries, and not substitutes for cur
~ rency, in the form of checks and drafts,
: there is shown a deficiency in the vol
i ume of the currency of the Union
g of more than one hundred millions
= of dollars. In view of these data, and of
= the long continued prevalence of as high a
rate of interest as one per cent. a month,
: on the best commercial paper, it cannot
nationally be contended that the currency
7, is inflated.
lie II initiation be not s2
"a WHAT is THE DISEASE OF THE CUR
IL RENCY?
% May it not arise from the manner in
which the currency has been issued, and in
u which it has been maintained in circulation
There are two modes of issuing paper
Y, money: First, that of the banks in the way
n of loans to be returned after time; Sc.
to cond, that which was practiced by the gov
of eminent, in paying dloay paper. of its owr
ne make for services rendered, purchases
al made, and debts variouslY due.
ID THE ENGLISH METHOD OF ISSUING
n CURRENCY.
i The currency of England which circu
90 lated throughout the long period of suspen
~ sion from 1897 to 1919 was issued ant
90 maintained in circulation in the first Of thes
~ modes, through the agency Of the Banl
W. of England, and some other banking in
~ situations. There was some depreciation Q
~, ~ paper money and some initiation of prices
' os but when we contemplate in the light Q
y. our own recent experience the smallness {
y, that depreciation compared with that whic
~, ~ has characterized our own currency TO
''i ten years, it Is impossible not to conclud
:, that there was something in the manner c
w issuing and maintaining the English circu
IN latlon which prevented its depreciation
~ ~ The principle on which it was issued an
~ kept outstanding was that of maintainin
por an equilibrium between the outgo and tn
Ia IA return of the money between the etflu
,oj and refluX Of the currency.
Inv THE AMERICAN METHOD OF ISSUING II
IN This principle lis wholly lost sight {
ex- when government undertakes to supply
'nt currency to the country by paying it ava
not in discharge of demands upon its treasury
mo Every dollar thus issued tends pro tanto t
are imitation. Under the first of these mode
not of issue, injurious imitation is as difficult q
Try under the other it is facile. Under tn
first mode, the amount put in circulatio
Sc is regulated by the business wants of tn
community, and represents actual bushes
NO transactions. 1t is sure to be in deman
' us to the amount put forth, for repayment {
iao the loans ON which it was borrowed
~ " There may be over-trading and over-bank
~ ing, with attendant evil consequences
-, but there is no initiation of the currency Q
ISL IL such, a demand being provided for
' " equal to the whole volume in circulation
- capable of preventing any injurious depr'
,,",' citation.
the EVILS OF THE VICIOUS SYSTEM Q
Ia CIRCULATION. =
en-, Very different is the condition of pap,
ICY currency, arbitrarily issued by government
by, Such circulation does not represent Il
len business transactions of business mer
ind There is no refux demand provided in th
act of issuing it. If there be no prospe'
ma of q cessation of issue, it soon falls int
the ruinous depreciation. The Confederat
1913 government speedily ruined its finances b
EN- this method of issuing the currency. Tia
ar the war lasted year or two longer, II
mp same catastrophe would have overtake
the the national finances.
he A PROPERLY ISSUED CURRENCY al
~, JUSTS ITSELF TO THE PRACTICA
'he WANTS OF THE COUNTRY.
ce,
of 1t is scarcely possible for currency i
be- sued in this way last described to be sour
and stable. Its amount is determined, not b
far the wants or conveniences of business, bl
gle by the arbitrary will and judgment, ofte
Use by the necessities, of government. Trad
re- isa better gauge of the proper volume
ge- the currency than the discretion of an
government, however wise, just or abb
nd. The wants of the great public, measure
of by actual transactions of business, an
red regulated by the habitual caution of exp
on perienced bankers, are apt to affix SAT-
la limit to the amount of paper money tina
in the most studious discretion of financ
or minister.
red THE EXPERIENCE OF ENGLAND o
all THIS SUBJECT.
W. Mr.. Fullerton, in his work on the Reg
lnn lation of Cu1Tencies, has the following b
lon Elections on the subject: @
stTha caca which I ho Va cunnocad 10 ~,