The New York herald., 1875-02-13
GOLD AND PAPER.
David A. Wells on the True Solution
Of the Financial Problem.
More Hard Experience Necessary to Pre-
pare Us for Resumption.
OUR EXCESS OF CURRENCY.
A Cremation Theory Of Open and
Direct Contraction.
Twenty-SiX Millions Of Gresnbacks Should Be
Burned Annually.
A MONEY FAMINE NOT TO BE DREADED.
Labor the Basis of the Worlds
Commercial Media.
The Law Of Supply and Demand
in Finance.
SPECIE BOARDING NOT DESIRABLE
A Coin Circulation a Military
Necessity.
A MONEY FAMINE NOT TO BE DREADED.
Labor the Basis of the Worlds
Commercial Media.
The Law Of Supply and Demand
in Finance.
SPECIE BOARDING NOT DESIRABLE.
A Coin Circulation a Military
Necessity.
no TEE EDITOR OF THE HERALD

Necessity.
10 rH1 EDITOR OF THE HERALD:-
In answer to your request to communicate my
views in reference to what ought to be the nnan-
cal policy Of the country In respect OF resump-
tion, would say, that have hitherto refrained
from expressing any opinions publicly on this
subject, not rom any lack OF interest," but because
believe that 1t Is necessary for the country to 20
through with certain further amount Of hare
experience before 1t Is willing to even attempt to
agree on any definite policy for re ,uming specie
payments; and that pending the arrival OF this
period the opinions Of no one individual, however
well considered, are likely to receive much serious
consideration from the public. Or in other words,
Horace Greeley was exactly right when he de-
cared that 'rhe way to resume was to resume"
lf he thereby meant that serious intent on the
part OF the people to make q beginning was the
essential prerequisite to resumption, and with
lhis existing there would be practically no other
dif1cuties. do not believe that this time, or this
barnest conviction OF the necessity Of specie re-
sumption, on the part Of the majority OF the
American people has yet come, but nevertheless,
Is you have expressed wish for my opinions,
rive them cheerlully.
WHAT WE KNOW AND WHAT WE DO NOT KNOW RE-
sPECrING THE VOLUME OF CURRENCY NEEDED.
In the first place do not believe that any man
ran aflrm how much currency country wants or
will so long as that currency Is restricted 10
m exclusively local circulation. three cent
piece, II 1t could be divided into sufficient num-
Der Of pieces with each piece capable OF being
handled. would undoubtedly sut1ce for doing all
the business Of the country IN the way OF facill-
tating exchanges II no other better instrumen.
tality was available; and on the other hand, II
our present volume OF irredeemable paper cur
~ In ha In q a
Issue of French "assignats" is said to have once
been-$9 000, 0o0, ,000 or 45,o0o, ,000 0oof.-we may
teel certain that the increase would, In no long
time, all be used, and that prices would adjust
themselves accordingly, as they did in France at
the period referred TO- whom 5000 lvres was the
fare lor ride in an ordinary hackney coach. But
We cannot af1rm specifically upon either OF
these points we can af1rm with certainty that, II
We are going to do business on the basis oi the
worlds currency and measure the value OF our
exchanges according to the standards most free
from nuctuations-viz., gold and silver-our pres
ent volume Of currency Is excessive. The evi-
nence OF this Is the existing premium on gold as
compared with currency.
TIE CREMATION THEORY OF RESUMPTION.
To restore now this standard, to mako our cur
rency on a par with the worlds currency we
must retrace the steps by which the standard was
departed from, or, In other words, having depre-
cated the value OF our currency by Issuing during
The war more than would sufice to effect the ex-
changes OF the country on a gold and silver basis
We must, IN some way, get rid OF this excess. Up
to this point great majority OF all who are SIN
cerely desrous Of the restoration OF the specie
standard are agreed; but in respect to the exact
method IN which the excess Is TO be retired wide
divergence Of opinion is encountered. Ny own
opinion on this point Is, that the simple, straight
forward way Is the best, and l, therefore, regard
with no lavor any OF the numerous indirect
methods that have been proposed Tor accomplish
ing the desired Obect-such as the interchange
ability Of notes and bonds, the accumulation OF
specie In the Treasury by borrowing or boarding;
the substitution OF national bank notes tor
greenbacks the immed ate abrogaton OF
the legal tender quality OF the currency;
the substitution or compound interest notes
for greenoacks and the like. All OF these plans.
80 lar as they have in them any thing or effective
ness. mean contraction. All OF them are attempts
to sugar the pill which the doctors proposing are
agreed has IN some way to be got down the
throat OF the patient. But the American people
are not going to allow themselves to be deceived
In this business. II a scheme has got contraction
In 1t they Will see 1t, no matter how carefully the
same may be disguised by machinery and circum-
locuron; and they Will act contrary to their
nature II. when they become really in earnest for
10 90 to II by the direct, unmistaka5le road than
travel, If we may so express II, "all round Robin
Hooo's barn" to get to the same destination. And
II they are unwilling to consent to contraction,
then, In my opinion, they can't have specie pay
ments. Discarding then all indirect methods,
would adopt what may be called shc cremation"
process, or would nave 1t enoined on the Secre-
tary OF the Treasury to destroy Dy burning on
given day OF every week. commencing AT the
earliest practicable moment. q certain amount OF
the legal tender notes, liking the minimum at
not less than 100000 per week or at the
rate OF s26,000,000 per annum THIS process
once entered upon and continued, the gradual
appreciation OF the greenoack TO par with gold,
and the ultimate equalization OF the two would
not he question OF lact, but SIMPLY OF time.
What specific amount OF contraction OF the legal
tender would PC necessary no one can tell with
certainty. But speaking generally, we can afiirm
with absolute certainty that to just the extent TO
which our present volume Of currency, supps.' ne
1t TO be exclusively com, would, by the laws OF
trade, be diminished by exportation TO just that
same extent the volume OF our existing paper cur
rency needs to be contracted to cqualze It's value
with coin. Ii the present average premium on
gold represents and measures the excess OF cur
rency, and we assume the amount OF currency In
active circulation at S750, ,000 then contrac-
ton oi from $50 000 900 to S90 000 900 and period
o. less thau iuur years would suice TO restore our
CURRENCY 10 specie basts. But II, on the otner
manu. INC excess oil currency over ana above wnat
II required 10 40 the business oI the cUuutry on
pod DaaS u greater than ~ indicated by the pres
ent average golh premium 10 point concerning
which opinions diner) taen longer period would