The Republican journal., 1876-08-10

OF precious metals which has flowed out of our
country for the eleven years from July 1st,
1860, TO June 30th, 1876. averaging nearly $s76,-
100000 year, was 1882. 100000 in the whole
PERIOD of which $617 100000 was the product
of our own mines. TO amass the requisite
quantity, by intercepting from the current flow
ing out of the country, and by acquiring from
the stocks which exists abroad, without dis
turbing the equilibrium of foreign money mar
kets. is result to be easily worked out
by PRACTICAL KNOWLEDGE AND JUDGMENT.
With respect to whatever 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 either
be paid or they can be funded. Whether they
continue as currency or be absorbed into the
vast mass of securities held as investments is
merely question of the rate of interest they
draw. Even if they We're to remain in their
present form. and the Government We're to
agree to pay on them rate of interest making
them desirable as Investments, they would
cease to circulate and take their place with
Government, State, municipal and other cor
| porate 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 a general
measure intended to remove a clearly ascer-
| tanned surplus, that is, the withdrawal of any
which ae not a permanent excess beyond the
wants of business. Even now, mlschleVOus
| would be any measure which affects the public
| imagination with the fear of an apprchendcd
| scarcity in community where credit IS so
much used Fluctuations of values and vicis-
STUDIES in business are largely caused by the
! temporary beliefs of men, even before those be-
| iefs can conform to ascertained realities
AMOUNT OF NECESSARY CURRENCY.
The amount of necessary currency, at q given
time. cannot be determined arbitrarily, and
should not be assumed on conjecture. That
1 1
| porary changes. An enlargement of it, which
| seemed to be durable, happened at the begin
| ming of the civil war by substituted use of
currency in place of individual credits. 1t va
rieS with certain states of business; it 1luctuates
| with considerable regularity at different seasons
| OF the year. In autumn, for instance, when
| buvcrs of grain and other AGRICULTURAL products
| begin their operations, they usually need to
borrow capital or circulating credits by which
| TO make their purchases, and want these funds
| in currency, capable of being distributed in
small sums among the numerous sellers. The
| additional need of currency at such times is five
| or more per cent. of the whole volume and il
| a surplus beyond what is required for ordinary
use does not happen to be on hand at the money
! centres a ,carcity of currency ensucs. and also
Il stringc ncy in the loan market. 1t was in ref
erencc to such experiences that in a discussion
| of this subject in my annual message to the
| New York Legislature of Jan. 5, 1870, the sug-
| gcstiOn was made that the Federal Government
/
which the public did 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 business require. The sys-
tem should passivcly allow the volume of cir
| cuatn@ credits to ebb and tlow according to
| the ever changing wants of business. 1t should
| initiate as closely as possible the natural laws
| of trades, which it has superseded by artificial
| pnn riy and in q similar ,lisruSSiop in,
| my message of Jan. I, 1876 it was said that re-
! sumption should be effected by such measures
as would keep the aggregate amount of the cur
rcncv self adjusting during all the process
without creating at any time an artificial scar
city and without exciting the public imagina-
ton with alarms. which impair confidence, con-
| tract the whole large machinery of credit and
! disturb the natural operations Of business.
MEANS OF RESUMPTION.
| Public economies, official retrenchmcnt and
| wise finance are the means which the st. Louis
| Convention indicates. As Il provision for rcve-
nues and redemptions the best resource is re-
duction of the expense of the Government be-
| low its income, for that imposes no new charge
on the people. If, however, the ilnproviuence
and waste which have conducted us to Il period
| of falling revenues obge us to supplement the
| results of economies and retrenchments by some
| resort to loans. we should not hesitate. The
| Government
| OUGHT not TO SPECULATE ON IT'S OWN DIS
HONOR
| in order to save interests on its broken prom
| lSes. which it still compels private dealers to
| accept at fictitious par. Tie highest Nation
| al honor is not only right but would prove
profitable. OF the public debt S!,S5 900 900
| bear interest at & per cent. in gold, and S712,-
| 100000 at . per cent. i'll gold. The average in
| terest is 5.5S per cent. A financial rolicy.
which should secure the highest credit availed
| Of ought gradually to obtain a reduction of one
| per cent. in the interest on most of the loans
| A saving of one per cent. on the average would
| be $1,000, 900 year in gold. That saving, reg
uarly invested at ID per cent, would, in less
| that thirty-eight years. eXtinguish the princ-
| pal. The whole seventeen hundred millions of
| the funded debt might he paid by this saving
| alone, without cost to the people
PROPER TINE FOR RESUMPTION.
The proper time for resumption is the time
when wise preparation snail have ripend into a
| perfect ability to accomplish the object with u
/ certainty and ease that will inspire confidence
and encourage the reylving Of business The
! earliest time in which such Il result can be
| brought about is the best. Even when the pre-
parations shall have been matured, the exact
| time would have to be chosen with reference
| to the then existing state of trade and credit
operations in our own country, the course of
| foreign commerce and the condition of the eX-
| changes with other nations. The specific meas
ures and the actual date are matters of detail,
| having reference to ever-changing conditions.
| They belong to the domain of
PRACTICAL ADMINISTRATIVE STATESMAN
| The captain of steamer about starting from
| New York to Liverpool does not assemble a
council over his ocean chart and fix an angle by
| which to lash the rudder for the whole voyage.
| A human intelligence must be at the helm to
discern the shifting forces of the water and the
winds. y human hand must be on the helm to
| feel the elements, day by day, and guide to Il
| mastery over them.
| PREPARATIONS FOR RESUMPTION.
| Such preparations are everything; without
| them legislative command fixing Il day, an
| official promise fixing a day, are shams. They
| are worse; they are a snare and Il delusion to
all who trust them. They destroy all confidence
among thoughtful men, whose judgment will at
last sway public opinion. An attempt to act on
such command or such IL promise without
preparation would end in new suspension.
| 1t would be 4 fresh calamity, prolific of confu-
| sion, distrust and distress.
| TIE ACT OF JANUARY 14TH, 1S15
| The act of Congress of the 14th of january,
1919, enacted that on and after the 1st of Janll-
| AIRY, 1879, the Secretary of the Treasury shall
! redeem in coin the legal-tender notes Of the
United States on presentation at the office of the
| Assistant Treasurer in the city of New York
| 1t authorized the Secretary to prepare and pro-
| vide for such resumption Of specie payments by
| the use of any surplus revenues not otherwise
| appropriated, and by issuing in his discretion,
certain classes of bonds. More than one and II
| half of the four years have passed, and Con-
gress and the President have continued ever
| since to unite in acts which have legislated out
| of existence every possible surplus applicable
to this purpose. The coin in the Treasury,
| claimed to belong to the Government. had, on
the 30th of June, fallen to less than S45, ,OOO, 900
as against So O00,0 900 on the lst of January 1873,
and the availability of part of that sum is said
to be questionable. The revenues are falling