Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1875-09-16

One of the most popular fallacies of the
day is that the stagnation in business is
owing to a lack of sufficie currency.
Every man who finds it difficult to borrow
money for speculative purposes without
security; every retail dealer who observes
a tendency among his customers to buy
sparingly and cheaply; every real estate
holder who cannot sell property to-day at
an advance over the price he gave for it
before the panic-each and every one of
these Immediately jumps at the conclusion
that there isn't money enough IN circula-
ton, and traces all his woes to that cause.
In spite of repeated demonstration it is
the most difficult thing, apparently, for
people to comprehend that imitation leads
to commercial panIcs and panlcs to the
stringency which is felt for years after.
Yet this has been demonstrated within the
last three wears in three different cOun-
tries-Engiand. Germany and the United
States In the United States the panic OF
1878 came from the initiation Of a paper
currency with corresponding imitation IN
prices and speculation. In Germany there
was an initiation of specie, resulting from
the enormous war fine paid by France,
and it brought financial disturbance with
it. In England there has been an intia-
ton of capital which betrayed the people
into improbable investments, and panic
was recently averted mainly by the solid
Ity and limitation of the currency. If an
initiation of real money may produce
financial disturbance and commercial dis
aster, how much more the imitation of
worthless imitation money!
One of the cleareSt and most intelligi-
bic answers to the assertion that there is
not sufficient currency in this country to
transact its business is the fact that the
actual circulation per capita is much
larger than in Great Britain, where the
actual capital, wealth and production are
perhaps three times as great. Mr.. George
Walker, of Massachusetts, made an esti-
mate of the comparative circulation in
France, Great Britain and America in
1868, which is the latest trustworthy data
we have on the subject There has been
a considerable initiation in France since
that time growing out of the war with
Germany, but not in Great Britain. The
circulation of the United States in bank
notes, legal-tenders and fractional cur
rency is, according to the last Treasury
statement, as follows:
Legal-tender notes. ............-.....S ,SA9S5
fractional notes OBSERVATION-DISCLOSURES. 4l,l43.3s3
National Bank notes Observation-Disclosures. 34S9 ,939
Total Observation-Disclosures. S764 90S,3 17
This is paper circulation on a popula-
ton of 10000, 600 of 1912 per capita.
The total note circulation of Great Britain,
according to Mr.. Walkers estimate, is
S196, 170620, or 1854 per capita, and that
of France in 1868 was $251, 49,, $50, or
5000 per capita. Thus it will be
seen that the paper circulation of the
United States is three times larger than
the standard paper circulation of Great
Britain or France If we add in the cir
culating coin of Great Britain, which is
estimated at $500, 100000, 1t gives a total
circulation of $3.50 per capita in that
country. Adding the coin in the United
States, which is about $3.50, 900, 000 it
gives total circulation in this country of
$24O5 per CAPITA or about One-third more
than the circulation per capita in Great
Britain, Notwithstanding the latter has
more than double the capital and business,
and should, according to the popular SUI
perstition, have more than double the cir
cuIatiOn for the transaction of It's bust
ness.
The difference between the circulating
medium of France and the United States is
not so great, but the reason Of this is readily
explained. France has a total coin and
paper circulation, after deduCting the
amount of speciein bank vaults, Of 1854
per capita, and including the specie per-
manently locked up and kept in banks as
security of $500, or about the same as
ours But one reason why France has
and requires so large proportion of cir
culating money is on account Of the ma
tional tendency Of the French people to
hoard money. The French people have
not yet attained the high business civiliza-
ton of savings banks. Every dollar de-
posted in bank virtually increases the
circulating medium Of the country. Thus
we showed by recent table, which we re-
produce below, that though the total cir
culating medium of this country is less
than $500, 900, there are really about
So, 462, 1874, III in practical circulation
through the medium of bank loans. We
have estimated these as follows:
No. OF Money
lenders. A7DOU7tt Of loan
1857 2e5 depositors in savings banks 81 100000 600
100 900 stockholders in savings banks 100000 900
100000 depositOrs in State and pri-
waite banks. ............... 150000OO0
$4,000 stockholders in State and
private banks. ........... 50.OOO.OOO
$4,000 depositors in National Banks 500, 068, 1896
250000 stockholders in National
Banks. asa, 765, 121