, 1874-11-14
THE CURRENCY PROBLEM.
y-iovy Of al Alncrfcnn In jEurope

GuetHcss 1HeFoaaoa, Lhe previous Volumo ot tto
CURRENCY becomes inadequate to effect tho III
oroasca transfcra. Money Ia Tight" interest
high, and gold aud silver nro nttrautud to that
particular country from othora whera thoy a1a
moro abundant. This In tic
ONLY NATURAL AND HEALTHY " ELASTICITY"
In currouoy. Whore tho currency Of a country
is pnpor one. dcprcclntod In value, the
ncceaBItics Of an increased busiucss cannos fNs-
sibly be supplied In this natural md hos-.Aav
way. papor-mouey Ia good only in tho country
whero It ia issuol, md cannot flow out Of 1t
when 1t is plonty. nor can gold md Rlvcr flow In
10 supplement 1t whom It Ia Hcarco. An III
croaBod supply Of gold and atvor would In no
way remedy tho difficulty; thoy cannot circulate
siuc by edo with doprooiatcd paper. mid, II
supplied, would range tlo1naClvos GU tho ado
Of commodities to bo transferred, Instead OF
that Of currency, which ss a!roady too small,
aud needs 10 DO supplemented to onnblo It
10 transfor tho o1isttng amount Of commodities.
Our own prcsout experience, tho preaout expe-
rionoo Of Italy, and the paat oxporionco OF every
country which t3as Ind dGprnniated papor-cur-
rency, chow TINT ouch currency cannot ciro,,-
lato Bdo by side with gold. That this muut ho
the fact, may DO aceu from tho following reAson-
fnga
i debt, NO will suppose la to 10 paid whom
money IL Rcarce, and tho debtor haa gold In his
possession. Paper IL the standard OF yaluc, and,
II the dobIor pay In gold, he must other louo
its premium, or ngrce with his creditor on tho
rate Mt Which 1t slall ho acceptcd The difficulty
Of coming to MI ugrcement as to tho premium
may scam slight, bua Is roally considerable, and,
except whore monoy is 80 acnrce as to produce
all actual panic, 1t is oasier 10 tlrst sell the gold
for papor, aud pay with TINT. 1t might socm
rtr
niah tho necessary data for an agroemont This
proyog, IL practice,
AN UNSATISFACTORY STANDARD
TOR a1l tho mercantile transactions Of groat
country. The quotations do not como instantly
to every corner Of the land, nor to every cass Of
dcllorH. The creditor 10 i'll Iio way bonnd to ac-
copt tho debtors stntemeut as to what is the
actual value Of gold III tho tuarkct, nor even to
sbido ~ BY the tho quotation IT. tho newspaper
ls compelled to. accept Tho creditors
statement and may bo forced to terms still moro
unfavorab!o to !n,l than the actual quotation.
Tho creditor may say ~ You r1.ust rny 10 many
rato' and i tue debtor does not choose to accopt
The tarms, hiB only redress ID to soll tho gold for
paper, aud pay with shat,-a process which, aH
We havo seen, tranpfers tho gold from tho eldo
by currency it still further Loads MI already
llce even III Italy, where gold Ia casicr to oltnin,
that tho dcbtor chooses to employ this method in
tho first instance. and avoid all discussion.
Under such circumstances, gold is, unl must 10,
not money,
nUT NEacuA.p1BE.
Moroovor tho Wal-Btreet quotations themselves
depend on tho fact of goid having boun aotually
again be- ~ and e copatantly is sold tat IL, that hat
gold is constantly used IN largo lunntitoa rs
commodity to be moved by currency: The first
effect OF raising paper to par would lie to stop
ployed. During The lato panic, tho scarcity OF
currency auch that gold could not bo 60 Noll
uold. Operations wero checked Tor It time,
and, hko othor commodities, 1t failed to
es"s ods ID m1gh9prss Write Down Ths rp prs@sm I'm
psnio Probably, at this timo, it was oven
used to H0n,p extent, like currency, in the pay
mcnt Of debtH, tho nntural obstacles to itB bcilg
30 used giving why under tho trenen dous pres
H., Balances dug in Euro1o wore paid in Becuri-
Itf,o7 o7b}e tl!oBe due America were pail in gold.
tity cnm into oott tho county, md large quau-
Except under ie sSet6 t6''sis:
sanccs geld is not and oal!lanSet oifou
medium ~ Amoytca, unuer our pross'as 'arisias.
tion. 1t B merchandise; it Ia bought, Bold, 10,
exported, like other merchandise. When It
flows out Of tic country, the balance OF trade"
ta not against us; money is not leaving the coun-
TT, though very rleaaant aud useful co1nmod-
Nv - aoi4e 3d. taPef oaly is money, hH our
taWs stand; and that stayA with us, since it ls
ywanted no WHARF else. Wore tho treasures Of
the Bank Of England to 10 scattered over our
country, we're eTe1y coal-miuo ln Pennsylvania
to yield gold, 1t
WOULD NOT INSURE RETuRx OF srEc1E-rAr-
It ia, aud can hc, only merchandise wo uHo what
wo can OF 1t, aud Whit wo do not want We soad
away IN exchange for something wo do. Tho |
last possibility OF gold aud papoz circulating to-
EOti1GF FADHllFH tho nf tbn I
:fender act Gold WAS fairly licked out Of tloors
by that enactment. Had gold remained tho
standard Of value, tho quantity Of IL in the cou-
Try belnR inaaoquato TO tue nood, dtbts would
and creditor would hale beon compelled to ug,ao,
aud mcasurca would luyo beon taken to lessen
tho obataccY to their dong 80,
~TAe amount OF bIBness remaining tho same.
an increase iu the volume Of tho circulating me.
dium must he followed by q riBo in prlces. A
Brontcr volume of tho circulating medium must
bo employed III transferring the Same amount of
ne1chandiso tho extra auailtlty distributes it.
k9f equally oVor tho whole 1iGil OF luorcautilo |
individual pieco OF melcAau. |
disc transferred
EMPLOYING MORE MONEY THAI, nErong,-
tnat is. selling for higher price. Tho Hntldon I
after tho conquest OF Moxsco und Peru, caused |
tiso in prices uyer the whole world. Taoiuuteuss
Ia the volume of tho currency III Anorica |
during tho War. by tho ISSUE OF papor-nonoy, |
uuu tQD eQEle cuGct III America. 1uo CURRENCY |
was suddenly increased III volume; gold aud |
tilrcr, which could migrate, Disappeared III all |
haste, but paper could not 10 sent away; ils |
Folumo vas Still greatly In excess Of wlnt tho |
busincns Of the country required, and great in
crease Of piccs waH tho necessary result. |
Papor-monoy, being confined to An,elica. wnu
worth less relatively to merchandise, whereas 1
gold, circulating freely from land to land, pro-
served its value relatively to merchandise. D.!
eowiloro was given amount Of busiuoss COM
PEELED to absorb mich greatcr amount of gold, |
snd, houce, prices III gold did not materially rso.
NO popular lnlBtaao could be greater tilan to |
atss6use tho depreciation Of papor-money dur |
!hs the War primarily to tho state Of tho national
Ffedt. 1t was caused, III tho trdt inBtance, by
;, s1MpLE nCDUSDANcY;
!ts To'ume was moro thnu busl1lcss roquirel,
Ahu greater quantity OF It must be employed in
avery sraus!er Ut merchandise. The depreciation
!! t!'uh canacd must hayc oxcrtod an influence on
tno leellng 10 Europoan financial circles, toudlng
to dcp5eclate our bonds, nnd exortlng thus rt-
llex in11ueneo Oh tho national credit itself, il,-
|'arlng IT mora than would have necessarily
been tha cnao.
Wo sLould always judge loniontly those who
'nms q our Ifeastry during sLo War; rcmem-.
oorlns tho ssralts III which thoy wero PLACED.