The Republican journal. [volume] (Belfast, Me.) 1829-current, 1876-01-27

FALSE REMEDIES.
Il Is natural that such condition of mems
business affairs should be prolific of illusorv
and mischieyous schemes for relief A vague
notion is extensively entertained that a new
issue of legal tender notes would afford an eff.
1ecual remedy. This fallacy is largely due to
The false theory peryading nearly ali the litera-
ture OF political economy as to the agency
which the quantity of the currency even v hen
equivalent TO com, has in causing cycles of
high and low prices.
AS high prices and expanded currency and
low prices and contracted currency have been
usually found together the effect has been mis-
taken for the cause. 1t is often assumed that
me banks, even when redeeming their notes in
coin, can expand their issues in excess of the
needs of the community and thereny originate
and consummate a general and prolonged rise
of prices.
CAUSES OF PRESENT REACTION.
In our present case the most important
cause of reaction is the immense waste of orr
capital, which has gone on in all the modes de-
scrlbed, and especially by excessive govern
mental consumption. An accessory cause is
the fall in prices of many of our staples which
are now produced in excess of the capacity of
private consumption by an impoverished peo-
PIE. There are also moral causes acting on
1he public mind. A popular error existed that
prices would not fall so long as the volume of
legal tenders and bank notes continued undi-
mlnished Many made their business calcutta
lions on that theory, and are disappointed and
their confidence in their own opinions unsettled.
These special causes, in addition to the nat
ural exhaustion of fictitious excitement, broke
the public illusions which had been generated
by false systems and false theories. A great
change ensued in the opinion and feeling of the
people, in confidence and credit, in the yolun-
tary machinery of business, which expands and
contracts according to the fluctuating temper
ana purposes of individuals. A corresponding
fall OF prices resulted
IL would be only by large issue, or the
menace OF large or indefinite issue, that de-
clded efiect on prices could be produced. That
would create alarm of such an impendino de-
probation as to threaten creditors with con
tiscation of their debts and holders of currency
with its loss, and they would hasten to ey.
change it for property. ANY issue which
should act on the imagination, melting wild es-
Inmates or wild fears of the future, might in
duce speculative depreciation of the price Of
the currency and Initiation of the prices of prom
erty.
The evil even of moderate issue, when the
currency already exceeds the wants of business,
and the increase cannot be pretended to be for
any legitimate purpose, especially if the object
OF removing individual distress by creating fic-
tltlous prices be avowed, is that it strikes at
the root OF all confidence and all credit. If the
principle be once adopted everybody will in
qulre how often such an eXpedient may be re-
peated, how far it may be carried.
An attempted expansion of the petty volume
OF the currency. under circumstances which
cause real contraction of the whole vaster
volume of credit machinery, which fill all lend
ers with dismay, and which destroy public con-
hdence, hope and faith, that are the basis of
credit systems and credit operations, is self-de-