The Columbian. [volume] (Bloomsburg, Pa.) 1866-1910, 1876-08-11
ty for these notes Sb9nIlst Ir thSIIpissa state1
worth in gold oepii $tSo, ,OO0DoO, Ndilapb

tud current III AZ thpNfbrpigh nlObey tndt-
kets ~ rcsUnug, the banks. even IL u
Wrte Ir'--lblr iva Al their notes to- I've present
ID l"I payment. would have 500,0OO,00o of
specie funds tu pay S2S1O0O,0OO ot Notes,
without contra ting their looms u their Gus
toners ur calling oh ANY private debtor Tor
payment. Suspended banks undertake ing to
resllme have usually been obliged 10 collect
from needy borrowers the means to re-
deem excessive isstics and to provide re-
serves. A vague idea of distress is there.
fare often associated with the process of re.
sumption, but the conditions which caused
distress in this former instance do not now
exist The government has only to make
good its own promises aipl the banks can
take care of themselves without distressing
anybody. The government Is therefore the
sole delinquent.
LEGAL.TENDER RESUMPTION.
The amount of the legaltender notes OF
the United States now outstanding IL less
than $4,000 900, .bt'sides S34,000,0 900 OF
fractional currency. How shall the govern.
ment make these notes at all times ia good
~ specie? II has u provide 10 reference to
the mass which would be kept in use by the
wants of business, u central reservoir OF coin
adequate to the adjustment of the Temporal
ry fluctuations of International balances, and
as n guaranty against transient drains artifi-
oitlly created by pahic or by speculation. II
has also to provide for the payment IN coin
al such fractional currency as may be pre-
scented for redemption, and such inconsidera
BILE portions OF the legal tenders rs individu.
ais may from time to time desire to convert
tor special use or in order to lay by in coin
their little stores of money.
RESUMPTION NOT DIFFICULT.
To make the coin now in the Treasury
available for the objects of this reserve, tU
gradually strengthen and enlarge that re-
serve aud to provide for such other excep.
tional demands for coin as may arise. does
not seem to Inc work Of difficulty. If wise
ly planned, and discreetly pursued it ought
not to cost any sacrifice to the business OF
the country. 1t should tend, on the contra.
ry, to II revival of hope and confidence. The
coin in the Treasury on the 30th of June
including what is held against coin certiii-
Gates, amounted to S74,0O0,000 The cur
rent of precious metals which has flowed on,
of he country for these eleven years from, ,July
!, 1867, to June 30, 1877, averaging nearly
$4,000, 900 year, was S3S2,OOO,OOO in the
whole period, of which $6l7,000,00O were
the product OF our own mines. To anas'
the requisite quantity by intercepting from
the current flowing out of the country, and
by acquiring from the stocks which exist
abroad, without disturbing the equilibrium
OF foreign money markets, is result to be
and Judgment With respect to whatever
surplus of legal tenders the wants of busi-
ness may fail tn keep in use, aud which, il
order to save interest, W Il bc returned fol
redemption, thev can either be paid or they
can be funded. Whether, they continue IL
currency or be absorbed into the vast mas,
of securities held as investments, is merely
question of the late of interest they draw
Even If they were to remain in their present
form, and the government to agree TO pay
on them n rate of interest, making them pa,
rs desirable investments, they would ceaS,
tn circulate, and take their place with gov
ernment, State, municipal an other cor
porate and private bonds, of which thou
sands of millions exist among us. In til,
perfect ease with which they can be chang
ed from currency into investments lies tn,
| only danger to be guarded against in til,
adoption of general measures intended t.
remove Il clearly y-ascertained surplus-tha
is, the withdrawal of any which are not
permanent excess beyond the wants of bust
| ness Even more mischievOus would b
any measure which affects the public i'm
| agnatOn with the fear of any apprehendet
| scarcity In a community where credit i
| so much used fluctuations of value an,
vicissitudes in business are largely ca,Ise'
by the temporary defence to the beliefs o
men, even before those beliefs can conform
to ascertaned realities.
AMoUNTOF NECESSARY CURRENCY.
| The amount of currency at give
| time cannot be determined arbitrarily, an
should not be assumed ON conjecture. Tha
amount is subject to both permanent an
temporary changes. An enlargement of
which seemed to be durable happened at til
beginning OF the civil war by a substitute
use of currency in place Of individual cred
its. 1t varies with certain states of busnes,
1t fnctuates with considerable regularity q
different seasons of the year. In the autumn
for instance, when buyers of grain and 9th
er agricultural products begin their opera
tions, they usually need to borrow capita
or circulating credits by which to max
their purchases and want these funds in Cur
rency capable of being distributed in smal
sums among numerous sellers The add
tional need of currency at such times is fiv
or more per cent, of the whole volume, an
if u surplus beyond what is required for OIL
dinary use does not happen to have been %
hand at the money centres; scarcity of cul
rency ensues and also a stringency in tn
loan market. 1t was in reference to sue
experience that, in discussion of this sui
ject, in my annual message to the New Yor
Legislature, of January 5, 1875, the sugge,
ton was made that "the Federal Govern
ment is bound to redeem every portion of il
issues which the public do not wish to us,
i Having assumed to monopOize the suppl
of currency and enacted exclusions again
everybody else, it is bound to furnish a
which the wants of business require. III
system should positively allow the voIun
of circulating credits to ebb and flow acco
ding to the ever changing wants of busines
1t should initiate as closely as possible til
natural laws of trade, which it has supe
seded by artificial contrivances. and in
similar discussion in my message OF Janus
ry 4, 1876, it was said that resumption shouI
be effected "by such,measures as would kee
the aggregate amount of currency self-a'
justing during all the process without cre
ting at any time All artificial scarcity, al
without exciting the public imaginatio
with alarm which impair confidence, col
tract the whole large machinery of credi
and disturb the natural operations of bus
ness.
MEANS OF RESUMPTION.
: Public economies, official retrenchmen
! and wise financiers are the means which h
St. Louis Convention indicate as provisiC
. for reserves and redemptions The best r
e source ID reduction OF the expenses of Il
government below its income, for that il
e poses no new charge on the people.
however, the imprudence aud waste whi'
= have conducted us to period Of falling re
: enues oblige Us 10 supplement the results
e economies and re.reuchments by some r
t sort to loans, we should not hesitate, r
!. government ought not to speculate on
u own dishonor in order to save interest ON
n broken promises, which it still cOmpels p
a vate dealers to accept at a fictitious pi
II The highest national honor is not on
r right, but would prove profitable. OF t
Ie public debt, S9S5, 900, 600 bear interest a
ct per cent, in gold, and Syl2,OO0, 900 at Fl
t, per cent, in gold the average interest 8
al per cent, a financial policy which shor
secure the highest credit wisely availed
ought gradually to obtain reduction of q
. per cent In the interest on mostpi the loa
" A saving of one per cent, ON the avers
I'd would he sl7 100000 year in gold h