Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1876-03-17

These figures exhibit enormous expan.
sion of loans, and at the same time de-
creasihg amount of IDLE legal.tenders held
in eEyc. In 1865 the legal tender re.
ssSNere out Of all proportion too large,
for at that time the bank-note circulation
was actually less than the amount of
greenbacks in their vaults. 1t is perfectly
preposterous for KelRy to say that the
figures exhibit contraction OF money;
on the contrary, there was too much
loaned and too much expansion all round
The figures prove that the panic was not
the'result of contraction Of money, but
of an expansion of bank credit. Nor is
there the shadow of foundation for his
assumption that the expansion of bank
credits was due to d contraction of the
volume of currency. AS we showed in
previous article, there was in 1860 cir
culating currency, including bank-notes,
OF 1865, 900 900, with purchasing power
of $3Si, i,200,G0) in gold, and in 1878 of
$72l 900, 600, with purchasing power
of $620,0U0, 900 in gold. The facts
are that we have had expansion
-expansion of the currency expansion
of crcdits-expansion of business--and
last and worst, expansion of Mr.. Kplleys
financial theories. The bank loans anil
discounts wtre $497 900, 600 in 1866
these were bank credits redeemable in
money, and with greenbanks at sixty
eight had purchasing power in gold of
about 1881. 900, They rose by sue
cessive gradalions till in 1873 they were
$044 ,000,0 coo, with q purchasing power in
gold of about eighty.siX. cents, and in the
aggregate $S12, 900, 900. The capital and
the loans-a proof OF the tendency of bust
ness TO overdo itself. The individual de-
posts increased from $540 100000 in
1865 to 1923 900, 900 in 1878, or, express-
ing them in terms of purchasing power
from $313, 800, 600 to $535, $50, ,000-an in
crease relatively considerably less than
that in the loans and discounts. All these
facts point to the true cause of the panic,
which was, in word, over lending and
over-speculation. The banks, us they al.
ways do, yielded to the influences OF the
period and extended their business as
every one else was doing. Railroads
were being extended in every direction,
and commercial and financial specula-
tions were rife. Debts were piled up far
beyond any possibility of paying them.
The community was awaked to this state
of affairs by the failure OF Jay
Cooke IL Co., in September, 1873.
The panic, and the thousands of CONNER
Vial iullulSS lndI navy lOIlOhCN III Ot'Ni
succeeding year, are the results. How
prepOstcrOus the assertion is that the con
traction of the currency was the cause OF
this speculation and its collapse job
would have broken down il his patience
had been put to the Test OF answering
such folly. In the first place there was
no contraction of the currency; in the
second place, if there had been, it would
have checked over-trading and over-spec
ulation, and the elements of panic would
not have existed Mr.. Kelley's disre-
gard of the facts Of the currency question
would be sublime if it did not go step
beyond, ana into the ridiculous. Like
the cOlored gentleman who applied foI
admission into one of the folds of Zion
and pleaded, when charged with havings
few hours before plundered a neighbor's
hen roost, that he didn't propose TO LEI
one poor hen stand between him and his
Lord" Kelley never lets any little iacts
stand between him and his argument
He treats facts with the liberality of his
master, Henry G. Carey, in one OF whose
volumes John Stuart Mill is said to have
discovered 500 misstatements of fact. We
have exposed Mr.. Kelley's misstatement>
with regard to the contraction of the
currency, and must apply to him the ia.
miliar principle False in one, false in all
-Chtcago Tribune.