New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-07-20
TIE COMPROMISE CURRENCY 1CE


proved June 20, 1874, has now been in OPP
Grafton more than year The Obvious purpose
Of this law was to add to Che quantity OF
paper money in circulation. 1t relieved the
| National banks from the obligation to keep II
legal tender reserve against their cifcuatloib
established the five per cent Redemption fund
in the Treasury at Washington, increased The
lawful legal tender circulation 10 1852 100000,
and allowed the banks to Withdraw their CIR
culating notes by depositinS equal amounts OF
crccnbacks with the L. ). Treasurer. The
actual working of the law has been very dill
fcrent from what its supporters or, possibly,
any one else anticipated, for under the pro-
vision permitting the withdrawal of bank notes
no less tlan 500, 523,057 OF circulation had
been surrendered up to the close OF last month,
while only 81 ,G01 1892 of new circulation had
been taken ont in the same time This gives
net contraction of $13,9 ,165 in twelve
months.
Tbs, however, Is not all. The Sherman
Caucus Compromise Resumption-in-1S79 Act,
which went into operation Jan. l. /, 1879, pro-
vded for the issue of an unlimited amount OF
National bank notes on condition that for
every so issued $5 in grcenbacks should be
retired until the aggregate legal tender crcu-
lation should be reduced to $300.OOOOOO.
In accordance with this provision s6,22S, APO
of legal tender notes have been Withdrawn
since Jan. II, 1915, being so per cent of
$1,7Sj,J2j OF circulation issued TO banks
! since chat date. This makes Il total cOntiac-
ton Of grecnbdcks and bank notes during the
fiscal year of $40, $40, $50. 1t will be remem-
bcred that in the Fall and Winter of 1874,
cx-Secretary Richardson added %26,CO0,O0
70 the legal tender circulation, which had pre-
viously for d number of years remained fixed
mt sS35O, 100000. Taking the whole period
from Sept. /, 1873, to June 30, 1873, there
has been an increase of nearly six millions i'll
the aggregate of gIeenbacks and bank notes.
few words on another points there
really scarcity Of money in the country
! According 10 the proper meaning OF this phrase.
we do not hesitate to answer that there is not.
The panic of 1873 was not caused by scarcity
Of money. Had the banks of this city, and of
the " hole country, for that matter, been pos
sesscd of hidden supply of greenhacks equal
in amount to AL they had on hand just before
the panic, and had they paid them ont 80 their
depositors or lent them to their customers,
they could at most only have postponed the
catastrophe for a short period. The trouble
with Jay Cooke & Co. and the numer-
ous dcfaulting railroad corporations was
that they had wasted and destroye,.
the capital which had been placed ia
their hands. These hard times are the penalty
for waste Of capita for the misconduct OF
spectators, for misplaced confidence, and for
financial nlismanagcmcnt Of various kinds. OF
these abuses, or OF most OF them the original
canse was making the LEGAL tender money of
the country (Which should be sold and silver
and nothing clae) too abundant and too cheap.
| IN 1860 we had, in round numbers, 81 90, 900,
900 of true Constitutional legal tender cX-
elusive Of tie specie in bank vaults, and
5000, GOO, 900 Of bank notes, payable in specie
on demand. This was money enough for thirty
million people. Our population may now per-
! haps be fony-fve millions, but our so-called
legal tenders, bank notes, and fractional cur
rcncy are more than $750,0O0000. Thus,
! while cur population in 10 years has increased
80 per cent, our money has increased $50 per
cent, or three times faster than our popula-
ticn.
Even admitting that there was scarcity of
money in September and October, 1878, that
scarcity was in the vaults of the banks. The
National banks OF this city on the 18th of
October, 1873, held but $5,179,s00 in legal
tenders, and all tho banks in tho city probably
not more than &6,0OO,O0O. The other day the
same banks held $S73. $3.50, 100, or twelve times
as much, so that the scarcity OF money to-day
is at least a very different thing from the
scarcity which made so much disturbance in
September and October 1873 If those with
whom money is now scarce will look at their
case candidly, they will confess that they are
suffering from their own or from some one
clse's misconduct, aud not because there is too
little money in the country.
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| so GOOD!