New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-01-19
IkELdTION.

There are four courses still open to tho Ma
tional Government III the present condition OF
it's finances, and of these four the Govern
mcnt is pursuing the only one which is utterly
indeiensible: I. The revenue OF the Govern
ment might be sufficiently increased by taxa
ton to provide for the current deficiency and
make the annual contribution to the Sinking
Fund which the law as well as good faith and
sound policy requires. 2. Further imitation OF
the currency might be avoided by negotiating
a loan of S50000,000, or some such sum. For
this the condition Of the money markets at
home and abroad is not uniavOrable. 3. As
a choice between evils the Secretary of the
Treasury might sell a portion of the surplus
gold in the Treasury, now reported at $4,000
900, sufficient to make good the deficiency Ill
the currency receipts, as compared with the
currency disbursements. The last course is
the ruinOuS one which has been adopted. 1t
is perfectly consistent with the gigantic effort
with which it is accOmpanied-tO bring silver
into circulation by paying out thirty dollars
day in token coinage to the creditors of the
Treasury.
The policy of imitation has now been per-
sisted In for four months 1t is time to con-
slider what effects have followed and what con-
sequences may reasonably be expected to fol-
low in the immediate future. If healthy
man cuts hs finger experience teaches that
the wound will heal. it is not essential to the
cure that the wound be wrapped in green
backs. A plain cotton rag will do just as well.
Yet as long as there are quacks and fools the
former will be able to persuade the latter that
the greenback is marvellous specific for olt
all lodi in tO sprih
however, we should advise the sufferer to be
careful in future about handling edged tools.
Not SO think the in1atiOnists, who continue
prescribing more greenbacks for the wounds
OF the panic.
Since the middle of September the total adj
dition to the paper money circulating in the
country has been about forty million dollars
The effect of that addition has been in our
opinion almost confined to Wall Street There
has been, since the panic, we admit. an I'M
prOyemeDt in the condition of things through
out the country, but the healthy part of il, at
all events, is the effect of natural causes. We
mean to say that the recovery, such as it has
been, would equally have taken place had the
currency not been expanded by single dol
lar. A panic is always followed by accumu
lations of money at the financial. centers and
lower rates Of interest. The period of twelve
or eighteen months, or longer, following a
panic is the time of all times when no adj
ditions to the currency are needed TO Illus
trate this point we give some of the figures OF
the NewYork banks at dates before and
after the panic of 1857;
Specie Circu.don Loan. Deposits
s. Da - 81 100000 $500 900 10000 600
Jsp 10 IS 80 OOOO 900 6300OOO 9s5OOOOO sl,oOOOOO
Now contrast the above figures with those
for the corresponding dates before and after
the panic of 1873:
specie. Legs. tender. LO,n- Deposits
SEP. D.'s 20 500 900 s4soo 900 les 900
Jan t. II "a 100000 5fioOOOO 2Go3Ooooo -jIZooooo
And also with the figures for the correspond
ing dates one year ago:
Specie L,s.lt.rde, LO.n. p'Eot
sept a. 70 19Aooooo 445OoOoo $50 100000 ?ol 100 600
Jso Is. 75.2lOOOOO0 4+,iOOOOO 2'o2Ooooo ZI-oooVoo
There is this in common between 1858 and
1874: Sixteen years ago the cash reserve IN
creased from less than fifteen per cent OF the
circulation and deposits before the panic to
about thirty-four per cent in the third week
of the following January. Nov the legal
tender reserve has increased only from seven
teen per cent of the deposits to about twenty
four per cent. Then there was no creation of
money, but on the contrary q destruction of
it, by reason of the contraction and failures
among the banks. Now We have all the money
we had four months ago and forty millions
additional. How can we account for the fact
that the banks have gained less. comparatively.
after forty millions imitation, than they did