The Morristown gazette. [volume] (Morristown, Tenn.) 1867-1920, 1876-08-16

tificially created by panic or by spec.
ulation. 1t also has to provide for
the payment in coin of such frac-
tional currency as may be presented
for redemption, and such inconsider-
able portions Of legal tenders as in
6ividuals may from time to time de-
sire to convert for special use, or in
order to lay by in coin their little
stores of money. To make the coin
now in the Treasury available for rob-
jects of this reserve, to gradually
strengthen and enlarge that reserve.
and to provide for such other excep-
tional demands for coin as may arise,
does not seem to me work of diff
Guilty. IF wisely planned and die.
creetly pursued, it ought not to cost
any sacri.nnc r.nce to the business of the
country. 1t should tend, ON the con-
trary, to revival of hope and con-
fidenoe. The coin in the Treasury
on June 80, including what is held
against coin certificates amounted to
nearly seventy-four millions.
The Precious Metals. -a
The current Of precious metals
which has flowed out of our country
for the IL years, from July 1, 1865,
to June 80. 1876, averaging nearly
| $76,00O,O00 a year, was 932 millions
in the whole period, of which $617,.
100000 were the product of our own
mines To amass the requisite guam
tity by intercepting from the current
flowing out of the country and by
| acquiring fFem stocks which exist
abroad without disturbing the equili-
brium of foreign money markets, is
a result to be easy worked out by
practical knowledge and judgment.
The Surplus of Legal Tenders.
With respect to whatever surplus
of legal tenders the marts of bust
ness may fail to keep in use, and
which in order to save interest will
be returned for redemption, they
can either be paid or they oan be
funded. Whether they continue as
currency, or be absorbed into vol
ume of securities held as invest
ments, ls merely question of fhe .,e
rate of interest th.eey draw. Even if
LEY were to remain in their present
form. and the Government were to
agree to pay on them rate of inter-
est, making them desirable as in.
vestments, they would cease to cir.
culate and take their place with the
Government, State, municipal and
other corporation and private de-
mands, of which thousands of mil.
lions exist among us. In the per-
feet ease with which they can be
changed from currency into invest
ments lies the only danger to be
guarded against by the adoption of
general measures intended to remove
clearly ascertained surplus, that is
the withdrawal of any which are not
a permanent excess beyond the
wants of business. Even more mis-.
chievous would be any measure
which affects the public imagination
with the fear Of an apprehended
scarcity in community where credit
is so much used. Fluctuations of
values and vicissitudes in business
are largely caused by temporary be-
! liefs of men even before those be-
liefs can conform to ascertain reaIi-
ties.
The Volume of Currncy.
The amount of necessary currency
at a given time cannot be deter
mined arbitrarily, and should not be
assumed on conjecture. That amount
is subject to both permanent and
temporary changes. An enlargement
of it. which seemed to be durable,
happened at the beginning of the
civil war by a substituted use of cur
rency in the place Of individual cred
! It's. 1t rises with certain states of
| business. 1t fuctuates with consid-
erable regularity at different seasons
of the year. In autumn. for instance.
when buyers of grain and other ag-
ricultural products begin their ope-
rations, they usually need to borrow
capital or circulating credits by
which to make their purchases and
want these funds in currency capa-
BILE of being distributed in small
sums among numerous sellers. The
additional mood OF currency at such
times is 5 or more per cent of the
whole volume. and if surplus be-
yond what is required for ordinary
use does not happen to have been on
| hand at money centres a scarcity of
currency ensues and also stringen
cy in the loan market. It was in
reference TO such experiences that in
a discussion on this subject in my
annual message TO the New York
Legislature OF Jan. B, 1875, the sug-
session was made that the Federal
Government is bound TO redeem
every portion of it's issues which the
public do not wish to use having
assumed to monopolize the supply of
currency and enacted exclusions
against everybody else, it is bound
to furnish all which the wants of bus
mess require. The system should
positively allow the volume of circu-
lating credits to ebb and flow ac-
cording to the ever changing wants
of business. It should initiate as
closely as possible the natural laws
| of trade, which it has superseded by
artificial contrivances- In similar
discussion in my message Of Jan. A,
1876, it was said that resumption
should be effected by such measures
as would keep the aggregate amount
of currency self-adjusting during all
the process, without creating at any
time an artificial scarcity, and with
out exciting the public imagination
with alarms which impair confidence
and distract largely the whole ma
chinery of credit. and disturb the
natural operations or business. Pub
lie economies, official retrenchments