The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1875-10-14

Icldbcu ny tHt dUl6st OI living ecOQOIIllStS,
II. c. Carey, in bis letters to Secretary Bris-
tow in 1874, PIP. 5, 6, and 8: The cur
rency, however, was then during the war;,
as we are now constantly assured, greatly
deprecated, gold having commanded heavy
premiums, as certainly had been the case.
How little, nevertheless, had been the con-
nection between the supply of
CIRCULATING NOTES AND THOSE PREMIUMS
1t is proposed now to show, as follows: At
the close of 1862 the government circulation
amounted to little less than $500, 900 900. AS
yet the state bank circulation remained I'M
disturbed, and to obtain the actual quantity
of circulating notes it is needed now to add
to the above the sum of $3.50, 00O, OO0 giving
q total of $3.50, 000, 900. We heve here pro-
digious and most rapid increase, and yet the
gold premium had scarcely passed beyond
80. Two months later, in February, 1868, il
stood at II, with scarcely any perceptible
increase in the circulating medium. In
July the greenbacks had largely increased,
their amount having reached S400,0O0,000,
the premium meanwhile falling TO "a.
At the close of that year the legal tenders
in circulation had reached $500, DOC, 900,
exhibiting an increase of $500, 600,
attended with decline of premium to the
extent of 20 per cent; the February pre-
MUM of IL having been replaced by the
December one of 81. The following year,
1854 exhibits in June an emission of COM
with rise in the price of gold from 100 in
May TO 257 in August, and decline to Us in
Decsmbe Five months later, in May, the
premium had fallen TO %, and this without
even the slightest reduction in ths quantity
of circulating notes in use. In the following
October, although the quantity of notes on
hand, and therefore out of circulation, had
become, as then stated by the comptroller of
the currency, very large, the premium had
risen to 46. In view of all these facts there
is, as 1 conceive, no possibility of exhibiting
any necessary connection between
THE PRICE OF GOLD AND THE CIRCULATING
NOTE.
As difficult would it be to exhibit any such
connection with the prices of commodities
of home production, all changes in these
latter having resulted from circumstances
wholly apart from the supply of notes.
Cotton and wooden goods were high for the
reason that cotton and wool famine had
been brought about. Labor was high be-
cause of the rapid extension of manufac-
lures consequent upon the adoption of pro-
tective policy, and upon the demands of the
government for service in the field. Meat
OF every kind was higher because of the vast
demand caused by millions OF men in arms.
Horses were higher because of army de-
mands, and so was IL with hundreds OF other
commodities that could be named Real
estate, however, remained unaffected, land
| in Pennsylvania and houses in Philadelphia
| having been purchased as cheaply as could
have been the case before the greenback
| idea bad first been started. From that day
| (1S65) to the present there has been an inces-
SAINT war upon the money of the many, the
circulating note, leaving wholly out of view
the action of money known by the name OF
| deposits" by means of which the few are
enabled to profit at the expense of the many
who need to live by exercise of their physi-
| cal and mental powers. Fierce as has been
| the war, so slight has been its effect that at
the date OF the crisis in September of last year
| the circulating notes in use, with gold at 1l5
were greater in amount than they had been
in 1864, with gold at 80, the total having
been $3.50, 600, 900. Making from this deduc
| tons similar TO those made by the comp.
| troiler in 1866, the net amount may
be taken at 5000, 000,000, or about
S13 per head, being but 81 81 in ex
cess Of that OF 1862, when paralysis reigned
throughout the land; when almost al
BUSINESS WAS TRANSACTED ON LONG REDITs
and when that vast West, which has since
been occupied, remained almost as complete
a terra incognite as is now the heart o
Africa. John Stuart Mill in his "Politica
Economy" says: 81 spprehend that banl
notes, bills or checks, as such do not &C
on prices at all. What does act on prices i
credit, in whatever shape given, and whethe
it gives rise to any transferable instrument
capable of passing into circulation or not
Up. 3l7). BOnamy Price Gays Of this las
extract from p. 3l7: This is fundamental
truth, of immense i'm portance in currency
it kills Off at once multitude OF empt,
theories about mutations OF bank notes
which expand circulation and swell
prices, and engender crises and smit
the commercial world with desc
acknowledgements of Currency, T
p. 1851 Bonamy Price is professor of polit
zeal economy ct oxford, and the empty the
cries he speaks Of make up the bulk Of MI
Schurz's speech. The third point of Mr.
Schurz is: "There never was state ever 81
we'll administered; there never was peopl
ever so frugal; there never was govern
ment ever so careful, which did not, by tn
emission oflsrge quantities OF irredeemabl
paper money, run in the vortex of profit
gacy and corruption. IL has never been,
will never be, otherwise" Did Mr.. Schur
never hear OF country called Great Britain
which used iTredeem2ble paper money from
1897 till 1921? And all that time she va
neither so weak, poor, pfofiigate nor cor
Tupt but thai Bowen, bullion professor il
Harvard College, allows that without IRE
deemable paper monev England could no
have conquered Napoleon; that
PAPER NOTES FOUGHT THE BATTLE OF WAT
ERLoo,
kept her w0rkingmen employed, CAV
them ease under almost incredible taxes
and secured to trade unexampled prosper
, ity. Our late war tells the same story. Ye
there are those who seem never able to lear
the lesson. Did Mr.. Senator Schurz neYe
hear of a country called France, which sur
vived the German war by means of we'll
regulated irreGsemable paper money, has in
creased his exports since from 5000 zoe 900 t,
$500, 900 600, is prosperous, everyone EN-
, ployed, her paper, though enormous il
amount, at par with gold, and that she i
able TO return to the old specie system
whenever she pleases? While at the sam
time specie-bssis Germany. having just re
ceived $1,000. 100000 in coin from this sam
France, is herself in deep water, tens o
thousands unemployed men in her streets
no money to be had TO start her mills, tsxe
increased, and one of her Berlin written
complaining: 1--WE are in as great distress ~
if we had to pay thousands of millions in
stead of having as much to receive" WbeI