National Republican. (Washington City (D.C.)) 1872-1888, 1874-05-23
TINKERING THE CURRENCY.

It's pretty well ascertained that the peo-
pie of the country, by large majority, are
perfectly satisfied with the present charac-
ter of the currency. One portion demands
that the Treasury notes shall be appreciated
by coin redemption at an early day. An
other insists upon q more equal distribution
of the present volume of national bank notes.
or the repeal of the limit to the issue of such
notes; in other words, that national bank
ing. under the present law, shall be made
free.
1t is obvious that free banking should be
accompanied by system of redemption
that will maintain the confidence of the
public in the reliability of the currency.
In no other way can its universalavailability
be assured As national bank notes are
now redcemable in Treasury notes, it only
remains to appreciate the latter by providing
for their redemption in coin, to raise the
valuesOf all our paper currency to par in
gold. Unless this is done we shall be con-
tinually subject to recurrence of panIcs
similar TO the one of last September.
The bill before the House will not effect
either of these objects. 1t does not touch
the vital point of difficulty. 1t proposes
nothing tending toward appreciation of the
value Of greenbacks. On the contrary, it
travels in the opposite direction. 1t pro-
poses an immediate contraction at the
money centres by the removal Of the de-
post reserves from thence within ninety
days, and requiring to be locked up in the
vaults of the country banks, and there re-
tanned, greater than would be caused by the
retention ofsuf1cIent gold in the Treasury to
redeem the greenbacks in coin. To CON-
pensate for this contraction of fifty to sew
enty millions it proposes to permit free
banking. But it must be remembered that
for every hundred millions of national bank
currency added to the volume of circula-
ton one hundred and twenty-five millions
of money would first be required to pay for
the bonds, and forty millions of greenbacks
retired, making together an additional con-
traction Of sixty millions. Under this
method we should have first deposit con-
traction of say sec, On the first
$500, 900, 900 of national bank currency
$3.50. 900, 900, being a total contrac-
ton of 800, 900 IN order to re-
duce- the volume of greenbacks to
the minimum of $500, 600, 900 provided for
in the bill, and no progress made toward
coin redemption, except by the exchange
of eighty millions of greenbacks retired,
and the locking up of the reserves of fifty
to seventy millions, more or less. Mean
while the addition to the volume of ma
tional bank notes would be $500, 900, 900.
The retiracy would be $50, 900, 0OO.. The
money put up for bonds would re-enter
circulation as rapidly as the Government
should need to pay it out for expenses, or,
if the bonds were purchased in open
market, the funds would be available for
circulation again st once After this POINT
is reached, greenbacks reduced to $780,,
100000. the process of imitation will be as
rapid as the exigencies or speculations of
the country may demand. There is no
further hindrance to the increase of paper
money than Is presented by the ability to
raise the money to buy the bonds required
under the law to he deposited for the pro-
lection of the note holders.
But can such point be attained? Will
not the radical removal of the deposit re-
serves cause such a stringency as to render
it impossible TO spare the money for the
purchase of the bonds required to start the
free banksP Will not the subtraction Of
those reserves so raise the rates Of interest
as to paralyze business operations and bank