New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-01-06
by tho usiTc of the country viii continue to fall
for IonO neriah

d.
the public temper new issue of currency would
not cause rise of prices unless it were 80 excessive
"a to occasion speculative Depreciation or dstrnst
of ultimate redemption. Ii could not reanlina.e In9
dead corpse Of exhausted speculation. perion on
quiescence must ordinarily precede renewal Oh tne
spirit of adventurous enterprise.
DISTRESS FROM FALLING VALUES AND LACKING
The distress now felt is incident to the continued
fall of values, which is the descending part OF the
Cycle through which they must pass after being
forced up to an unnatural elevation. The want felt
is want of capital which the party does not own
and has not the credit TO borrow. not lack OF cur
rency. 1t ia caused by investments in enterprises
which have turned out TO be wholly or partially bad,
or which give slower returns than was anticiPaeeto
by too much conversion of circulating capital INTO
fixed capital-by excessive undertakings or engage
ments, induced by reliance ON credit that was
transient. In period of falling prices good properly
comes less convertible. 1t loses its ciTcuatory
4Iality 1t almost ceases to DO resource 10 OBTAIN
money. liza ...... -. .... r
Tbese inconveniences would not be removed il
the Government should put out legal tenders and
take in corresponding amount of bonds. or II
bank should deposit bonds, and receive notes In ex-
change Still tho individual distressed for the want
of capital would have no additional means to buy or
borrow these new issues which then owner wouid
obtain only by paying for them. diminution OK
the Government bonds outstanding Is condition Oh
the increase of legal tenders or bank notes. III an
embarrassed person could obtain the Government
bonds surrendered deposited he would be as much
relieved by his power to dispose OF them as he Would
by power to dispose of the legal tenders or bank
notes. His difficulty is that he is equally unable 10
obtain either. He has not the means to buy or the
credit to borrow them. What he wants is something
to make his bad investments gOod-his slow invest
ments current: something to make his property con-
yertible-tO impart to 1T CIRCULATING quaIlty, as
thara alriSa Of ali a
Iative excitement and everybody Is disposed to buy,
and everything finds ready market.
INCREASE OF CURRENCY CANNOT CURE DISTRESS.
He wants something to create in others DISPOSE
ton to buy in order that he may be able to sell.
This is what in the present state of things, an in
crease of the currency will not do. 1t would not act
mechanically on prices. 1t does not operate by
physical means. 1t simply influences the minds OF
men. 1t induces them to buy, and, in the effort to
do so they bid up prices 1t is only when the minds
of men are disposed to receive an impulse toward
buying that such an effect is produced. When spec
ulators into the market to influence Others to BUY,
in order that they may SELL the conference usually
ends in fall. Even when spectators go into the
market to sell event expected to cause rlse,
the result is commonly fall. Everybody cannot
get out at once, at the expense Of Others.
CHANGING FORMS AND VARYING VOLUME OF CIRCU-
LATORY CREDITS.
The amount of currency required by the needs Of
business is not to be decided by former experience
There Is no doubt that. the first issue of legal
tenders, they were largely substituted for other
forms of credit. A single case will illustrate The
sudden rise in prices enabled the farmer to become
the owner of the floating capital on which his next
years dealings with the country merchant were to
be carried on. The habits of business change to
adapt themselves to now conditions 1t Is possible
that the Government might cautiously follow the
rlu
tanned surplus without doing any harm. But
withdrawal of any considerable portion of the
amount required at tho season of the year which
creates the largest demand would produce sericis
and unnecessary distress The adoption of system
which should threaten such result would be very
mischievous. The Federal Government Is bound TO
redeem every portion of its issues which the public
do not wish to USE Having assumed TO monopollze te
supply of currency and enacted exclusions against
everybody else, it is bound to furnish all which the
wants of business require. The case IS as II the
Government should undertake TO monOpollze the
supply of lake prOpellors or canal boats TO DrlnR
grain to market. If it should not furnish enough:
the deran cement of business and the distress of
producers and consumers would be intolerabe.
While securing redemption, the Government should
organize a system which passlvely allows the
volume of circulating credits toebD and how accord
ing TO the ever-changing wants OF business 1t
should initiate. as closely as possible, the natural
laws of trade which it has superseded by artificial
contrivances.
The ability of the Federal Government to resume
specie payments is thus simply question of its COM
mand of resources to pay such portions of the cir
cuatng credits it has issued. IS the public not wish
ing to use, may return upon it for redemption The
amount to be paid cannot be considered large, in
comparison with its financial operations 1t has the
taxing power and by reducing its expenditure could
accumulate an adequate surplus. 1t has the borrow
ing power and good credit 1t can make permaneHt
loans and pay the treasury notes which are re-
turned for redemption. 1t can convert them
or fund them into Understanding securi-
ties. In that case they would cease to be
currency, and would take their place among in
vestments like national, State, municipal. railroad,
or other corporate bonds, or any of the numerous
forms of moneyed securities, of which many thou
sand millions are held in our country The circula
tory quality IN securities Of equal general credit is
chiefly question OF the rate of interest they bear.
The amount of coin necessary for resumption IL,
first, an adequate reserve to meet the demand Tor
exportation for which the treasury would become
the universal reservoir, and second surplus sutt
cent fully to assure the people that the treasury
supply would not be exhausted. The power To COM
mand cOn the owner of foreign bills of exchange,
OF in other FORMS would, to large extent, be
equivalent to possessing CON- Beyond such an
amount of con the question IS simply question OF
capital.
the specific measures, the discreet preparations
these business questions to be dealt WITH in view
of tho state of trade and of credit operations in
own country, the course of foreign commerce. and
the condition Of the exchanges with other nations,
the currents of the precious metals. and the stocks
from which a supply would flow without undue dis
turbance of the markets of other countries. These
are matters of detail TO be studied Oh the facts
and figures They belong TO tho domain Of practical
administrative craftsmanship,
RESUMPTION LESS COSTLY THAN PRESENT INPOiIcY.
1t is quite clear that the problem ought to be
worked.out, without costing the country anything