Alpena weekly argus. [volume] (Alpena, Mich.) 1871-1893, 1876-08-16

tender notes, or a little more thai
fifty per cent. of their amount
But they also held on deposit il
the Federal Treasury as security
for these notes bonds of the Unitet
States worth in gold about $500,
100000 available and current in al
foreign money markets. In re
suming, the banks, even if it wer,
possible for all their notes to b,
presented for payment, we woulC
have $500,000,000 of specie fund:
to pay 100000 of notes, with.
out contracting their loans to theil
customers or calling on any private
debtor for payment. Suspended
banks undertaking to resume have
usually been obliged to collect from
needy borrowers the means TO re-
deem the excessive issues and to
provide reserves. A vague idea of
distress is, therefore often associat-
ed with the process of consumption.
But the conditions which caused
distress in those former instances
do not now exist. The government
has only to make good its own prom
ises and the banks can take care
of themselves without distressing
anybody. The government is,
therefore, the sole delinquent. The
amount of legal tender notes of the
United States now outstanding is
less than 100000 besides S34,-
100000 of fractional currency
How shall the government make
these notes at all times as good as
specie? 1t has to provide in ref
erence to the mass which would he
kept in use by the wants of bust
ness a central reservoir of coin
adequate to the adjustment of the
temporary fluctuations of interna-
tional balances, and rs guaranty
against transient drains artificially
created by panic or by speculation.
1t has also to provide for the pay
ment in coin of such fractional cur
rency as may be presented for re-
demption and such inconsidcrablc
portions Of the legal tenders rs in
dividnals may from time to time
desire to convert for special usc,
or in order to lay by in coin their
little stores or money. TO make
tho coin now in tho treasury avail
able for the objects of this reserve,
to gradually strengthen and enlarge
that reserve and to provide for snch
other exceptional demands for coin
rs may arise does not seem to me n
work of difficulty. Ii wisely plan
ned and discreetly pursuedit onght
not to cost any sacrifice to the bus
mess of the country. 1t should
tend on the contrary to n revival
Of hope and confidence. The coin |
in the treasury on the 30th of June,
what was held against
coin certificates. amounted to near
ly S74,000,000. The current of
precious metals which has flowed
out of our country for the eleven
years from July I, 1865, to June 80,
1876, averaging nearly S76,000,000
n year, was 1882, 100000 in tho
whole period, of which $6l7 900,
200 were the product of our mines.
To amass requisite quantity by i'm
torrupting the former current ilow-
Dg out of the country and by ac-
Iuiring from stocks which exist
sbroad without disturbing the equi-
ibrium Of foreign money markets
= q result to he easily worked ont by
PRACTICAL knowledge and Judgment.
With respect to whatever surplus
If legal tenders tho wants Of bust
lcss may fail to keep in nse, and
which in order to save interest will
'e returned for redemption, they
AN either be paid or they can be .
unded. 9
Whether they continue as curren-
v or be absorbed into tho vast mass '
4 securities held rs Investments is q
ncrely question Of the rate of
ntorest they draw. Even il they {
ycre to remain in their present |
)rm, and the government were tn I
gree to pay on them rate of in {
crest making them desirable rs an I
lvcstment they would cease and q
,Eo their place with government, u
tate, municipal and other corpor- a
to and private bonds, Of which t
housands of millions exist among g
8. In the perfect ease with which &
ley can be changed from currency Il
ITO investments lies the only dan
er to be guarded against in the $
lloption of general measures in 7
,nded to remove clearly asccr- q
lined suplus--that is, the with q
rawal of any which are not n per- f
lament excess beyond the want Of il
usiness. Even more iuischievous q
ould bc any measure which at "
cts The public imagination with n
ar Of an apprehended scarcity. In G
community whore credit is SO much a
sell, fluctuations of values and r
in business are largely O
.used by temporary beliefs Of Fl
en, even before those beliefs can n
inform to ascertained realities. n
he amount of necessary currency a
n given time cannot be deter ]
lined arbitrarily and should not Il