, 1874-12-14

TO make tho showing fair ono, it should
be stated TINT month prior to the last date
gold ses worth 122 7-8, and that during the
ycar 1863 it oscillated from tint figure to 1876.
But taking tho last five yeara absolutely wo
find that there Inns been variation Of 20
cents at times from tho par vnlue Of gold,
md tl1nt it Inns been constantly huctunting
from about los to about 120,-a difference Of
u cents. It has not been ut nil un-
usual to havo it change from 3
to I cents during month, and
ut tines us during tho period following the
panic Of 1870, thoro has been duct,ation Of
six or seven cents within few days, oqunl to
III entire year's interest on money. As We
pointed out in q recent article, such n fluctu-
ation not only nllects tho 938a, 100000 of
greenbncks outstanding, but tho en.iru none
tary mud credit system Of the country, in
volving thousands Of millions Of dollars.
"FuLToN challenges us to show any fivo
years within a period Of thirty yearH-from
1911 to 1s7i-when there has been 30 "lit-
tie" auctuation. Let us tnko the five years
from 1857 to 1861, inclusive. We maintain
TINT during TINT period there was not q
nnctuaton in tho solid currency of tho coun.
try issued by Statos under careful laws,
Of more than from 1-10 to 10 of / 1er
cont; md That, this being simply tho cost of
New York or Boston exchange, or tho ex-
pcnso Of converting tho currency into gold,
there was actually no Auctuation whatever
aud tho man who Ind n dollar of good money
in 1ST7 Or 1853 had exactly the same amount
in lsGl, when tho War broke out, if llo Ind
houdcd it. Under tllis estimate, we include
tho issues Of MI tho New England banks
under whnt was known as the "Sutiolk sys-
tenn, that is, the banlis which matlo tie Suf-
folk Bank Of Boston common clearing
house for tho redemption Of their currency.
This system included nearly all tho banks Of
Now England. 1Yo menn also tho bauk-
issues OF Now York, those of Ohio
Qinown rs "rodbacks y, those Of tho
Stnto banks of Indiana, Iowa, Pennsylvania,
louisiana. Virginia, New Jersey, aud
Maryland. In other words, tile balls-issucs
egr,aliug four-ffths of tho cntiro amount of
tho curroncy Of the country wero either at
par with gold Or at tile nominal discount Of
small fraction of n cent for exchange dur
ing the stated period of five years. We con-
not include tho Illinois bank- -iss,es simply
because the 1aws OF our State mud some other
Western States permitted wildcat banking.
Banks were authorized to be organized and
issue notes on tho security Of tho dopreciated
bonds Of Southern 6tntes. como of which
wero not worth 20 cents on tho dollar. Tho
old Illinois Bauking-1aw was crude, careless,
Il 1oE, ,nks II
course tho bank-notcs issued under it soon
fell into discount aud disreputo. But in all
tho States where tho bauk-issues wore hcdgcd
about by safeguards similar to those applied
to the National Banlt notes, instoad Of .cam-
pering backwards md forwards with an oscil-
lation Of from s to 20 per cent, remained
substantially Mt par with coin. Tho crisis Of
1856 did not even deprociato these notes.
Many Of tho banks closed their doors antl
suspended specie payment until tho storm
was passed., but then camo forward and TO-
deemed their Issues at par. But during the
period Of suspension tlloir notes still stood at
noarly pnr, SO strong was public confidence
In their solyenoy.
Tho National Banking system was con-
atructed after the models furnished by tho
Now York; Ohio, and Indiana State SYSTEMS
which were built up in the chronological Or
dor Of the Montion of tho na,nes. Chase
md McCullocl framed the National Banking
systom upon the sa.no plnn which had beon
found to work SO admirably IN these statos,
acHh one important exception. That OK
ooption explains why tho National o,,r-
renoy has oscillated 80 enormously.
Tho banA-issuos un,lor tho State laws
were bnsod upon redemption IN gold ;
the issues Of the National Danl1s aro based
upon redemption In logal.tondor notos, which
aco themselves s7yet7tomabb. uonoo tho duo