Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1876-08-12

object demanded by the convention
a resumption of the specie payment {
the legal tender notes of the Unite
States. That would not only restor
the public credit and maintain the ma
tional honor, but it would establish
sound currency for the people. TIL
methods by which this object is to b
pursued and the means by which it i
to be attained are disclosed By wha
the convention demanded for tn,
future and what what it deEounced il
the past. The resumption of specie
payment by the Government of th,
United States on its legal-tender note
would establish specie payment by al
the banks on all their notes. Th,
official statement made on the 18th O
May shows that the amount of bank
notes was $500, 900, 900, less $40, ,000, ,00(
held by themselves. Against the $3.50,
O00, 900 of notes the banks held $141 !,
| 100000 legal-tender notes, or little
more than 80 per cent. of their amount
but they also held ON deposit in the
Federal treasury as security for these
notes the bonds of the United States
worth in gold about $3.50, ,00C, 900, avail
able and current in all the foreign
money markets. In resrming, the
banks, even if it were possible for all
| their notes to be presented for pay
ment, would have $500, 600, 900 of specie
funds to pay $3.50, ,OOO,0 of notes, with
out contracting their loans to their Gus
toners or calling on any private debtor
for payment. Suspended banks under
taking to resume have usually been OBJ
liged to collect from needy borrowers
the means to redeem excessive issues
and to provide reserves. A. vague idea
of distress is therefore often associated
with the process of resumption. But
the conditions which could distress in
those former instances do not now ex-
ist. The Government has only to
make good its own promises and the
banks can take care of themselves
without distressing anybody. The
Government is, therefore, the sole de-
linquent. The amount oflegal-tender
notes of the United States now out
standing is less than three hundred
and seventy millions of dollars, be-
sides thirty-four millions of dollars of
fractional currency. How shall the
Government make these notes at all
times, in reference to the mass which
would be kept in use by the wants of
business, central reservoir of coin
adequate to the adjustment of tempo
rary fluctuations of international bal
ances, and as guarntee against transi-
ent drains artifcially created by panic
or by speculation. 1t also has to pro-
vide for the payment In coin of such
fractional currency as may be present
ed for redemtlon, and such inconsider-
able portion of the legal tenders as in
dividuals may from time to time desire
to convert for special use, or in order
to lay by in coin their little store Of
money. To make the coin now in the
treasury available for the objects of
this reserve, to gradually strengthen
and enlarge that reserve, and to pro-
videefor such other exceptional de-
ma1ds for coin as may arise, does not
seem to me wor K of difficulty. If
wisely planed and discreetly pursued,
it ought not to cost any sacrifice to the
business of the country. 1t should
tend on the contrary to a revival of
hope and confidence. The coin in the
treasury on the Both of June, includ-
ing what is held against the coin GER
tifeates, amounted to nearly seventy
four millions of dollars. The current
of precious metals which has flowed
out of our country for the eleven years
from July /, 1866, to june so, 1876,
averaving nearly $76,000,00 a year,
was 1892, 2,000,000in the whole period,
of which $617 ,000,000 were the pro-
duct of our own mines. To amass the
requisite quantity by interceptipg from
the current flowing cat of the coun
try, and by acquiring from the stocks
which exist abroad, without disturb
ing the equilibrium Of the foreign
money market, is a result to be easily
worked out by practical knowledge
and judgment. With respect to what
ever surplus of legal-tenders the wants
of business may fail to keep in use, and
which in order to save interest will be
returned for redemption, they can be
paid for funded. Whether they contln-
ue as currency, or be absorbed into the
vast mass of securies held as invest
ments is merely question of the rate
of interest they draw. Even if they
were to remain in their present form,
and the Government we're to agree to
pay on them a rate of interest making
them desirable as investments, they
would cease to circulate aud take their
place with the Government, State, mu-
nicipal and other corporate and private
bonds, of which thousands of millions
exist among us. In the perfect ease
with which they can be changed from
currency into investments. lies the
only danger to be guarded against in
the adoption of general measures in
tended to remove a clearly ascertained
surplus, that is, the withdrawal of any
which are not permanent excess be-
yond the wants of business. Even
more mischievous would be any meas
ure which affects the public immagin-
alton with the fear of an apprehended
In a community where cred |
it is so much used, fluctuations of val
ues and vicissitudes in business are
largely caused by the temporary beliefs |
of men, even before those beliefs can
conform to ascertained realities.
The amount of necessary currency
at given time can not be determined
and should not be assumed
on conjecture. That amount is sub
jected to both permanent and tempo
rary changes. An enlargement of it,
which seemed to be desirable, hap
pened at the beginning of the civil
war, by a substituted use of currency
in place of individual credits. 1t va
ries with certain states of business. 1t
huctuates with considerable regularity
at different seasons of the year. In
autumn, for instance, when buyers of
grain aud other agricultural products
begin their operations, they usually
used to borrow capital or circulating
credits with which to make their pur-
chases, and want these funds in cur
rency capable of being distributed in
small sums among numerous sellers.
The additional need of currency at
such times is 5 or more per cent. of
the whole volume f; and if surplus
beyond what is required for ordinary
use does not happen to have been on
hand at mouey centers, scarcity OF
currency ensues, and also a stringency
in the loan market. 1t was in refer
ence to such experiences that, in
discussion of this subject In my annu-
al message to the New York Legisla-
ture, of January 5, 1875, the sugges-
ton was made that the Federal Gov
ernment is bound to redeem every
portion of its issues which the public
does notwish to use. Havingassumed
to monopolize the supply of currency,
and enacted exclusions against every
body else. it is bound to furnish all
which the wants of business require.
The system should passively allow the
volume of circulating credits to ebb