Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1876-03-10
Kelley on Garrenoy, Credit and Cor.
traction.


The Hon. William ID, Kelley has been
making another speech on the currency
He states that the volume of legal tender
was, June 30, 1865, $GGS, ,01O 800. To
show how not at all these figures appcr
tain TO q comparative. discussion of cur.
rency, il need only' be said that Mr.. Kel
ley includes $l91, 721 ,470 of six pcr cent.
compound interest notes; IS, ,467 $40 of
one-year five per cent notes of 1868; $7,.
7l5,950 OF two year five per cent. notes OF
1868; $34,441, $50 of two.yelr coupon
notes of 1868. This aggregate of above
$244, 900, 900 of interest bearing Govern.
mcnt securities has no more right to a
place in an enumeration of currency than
Mr Kelley to seat among the immor.
tails. Nh. Kelley cannot produce bank
er TO testify that any of these securities
circulated as money three months after
their issue. In comparing the volume
OF currency in 1858 with that 10 1873 Mr..
Kelley, with the artful carelessness of
Skimpole in pecuniary matters, skips
over the circulation Of the National
Banks, which was only 500 800, ,339 in
1860, but had risen to S31g 621 202 in
1873 lie utterly ignores the essential
point on which the wi ole currency oues.
tion turns, viz /; the purchasing value of
the currency. IT is not the number of
pieces of pictured paper that determine
Its worth, but their purchasing pow
cr. If it were the former, the Con.
federacy would have been so far ahead
OF the Union in the sinews of war
as to have beaten lis out of sight. The
lawful money of the country had an
actual purchasing power in the markets
of the world of about sixty.eigh cents in
May, 1865 in September, 1873, of about
eighty-six cents. Admitting this sup.
pressed but all-important iact into the
calculation, how docs Mr.. Kelley come
outy Taking Mr.. Kelley's figures, for
the joke of the thing nobody would take
MIR. kelleY's figures in earnesU, and al
lowing him in 1865, $609, 600, 900 of claw.
tul money" including the non-circulating
compound notes, and adding thereto
SllO,OOO,O00 of National Bank currency,
whlch ne omtts; and turning then TO
1873, when there was Sd00 900, 600 of
lawful money" and $320, ,O00, 900 OF Ma.
tiOnal Bank notes, let us sec When the
country had the most currency: that is,
the most purchasing power for currency
is useful only to buy things with. In
1863 $500 100000 of paper, worth 6S per
cent, had purchasing power equal to
$500, 100, 600 OF gold. In 1873 $722, ,0OO,-
600 of paper worth Sc per cent, would
buy $62l 600 900 Of gold value II this is
contraction, we will admit that contrac.
tion caused the panic. But it was an act.
ual expansion Of $71 900, 600 OF gold value
Of the currency, and that, too, after in.
cluding more than 1914, 900, 0OO of inter.
cst-bearing paper that never circulated
from hand to hand as money.
SO much for Mr.. keleys figures; the
facts tell much worse against him. The
actual circulating medium OF currency of
the country in 1865, was counting green.
backs, fractionals and bank notes, only
5000, 900 900, with a purchasing power
equal 10 @Jot, 500, ,o0n of gold. In lS73 il
was $72I,000 900, with a plrct,n,;no
power Of 1920, c00,0O0. Was this increase
of both quantity and value contraction ,
Or must we admit the unpleasant fact that
the only contraction Mr.. Kelley has
proved to exist is that of his own yeraeity
and Intellectual facultiesg
MT. Kelley certainly does not under
stand the arithmetic of the currency ques-
ton. Ills logic, however, is as romantic
us ms ngures. lie says that the contrac-
uon-as illustrated above.-c caused an IN.
due expansion of credit, and hence the
collapse of 1873. He says: "That moth.
ing is taught with more constant reitera.
ton by The experience of England and
the United States than that \ Drotracted
contraction of the money of country is
the sure precursor of wild imitation of pri
vate credit y Here the will of the Wisp
chases itself to its own destruction. The
animal that disappeared in its own stom.
ach loses all interest beside the man who
shows that the panic was caused by a col.
lapse OF credit caused by con raction of
currency that caused an imitation of credit.
You contract the currency and extend
credit; you contract the currency and
credit collapses --Chicag0 Tribune.