Saint Mary's beacon. [volume] (Leonard Town, Md.) 1867-1983, 1876-08-10

SuAu aucquase 10 the oulustmeut Oh t0e
temporary fluctuations Of international
balances, and q q guaranty agains,
| transient drains artiiicially created BY
ponic or by speculation. II has also to
provide for the PAYMENT in coin of such
f5octional currency Is may be presented
fof redemption, and such inconsiderssle
portions Of the legal tenders as individ.
uals may from time to time desire to
convert for special use, or in order to
lay by in coin their little stores of money.
To make the coin now in the treasury
available for the object Of this reserve,
to gradually. strengthen and enlarge that
reserve, and TO provide for such other
exceptional demands for coin as may
arse, does not seem to me q work, OF
difficulty. If wisely planned and dis
creetiy pursued it ought not to cost any
sacrifice to the business Of the country.
Il should tend, on the contrary, to a re-
vival Of hope and confidence. The coin
in the treasury on the 3Oth of June, in
GLIDING what is held against coin GER
tifcates, amounted to nearly seventy
four millions. The current of precious
metals which has flowed out OF our
country for the eleven years from July
1, 1865, to June 80, 1876, averaging
nearly seventy-six millions . year, was
eight hundred and .hirty-two millions
in the whole period, of which six hun
dez and seventeen million. were the
80 4Aakofour own mines. (
To amass 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 a result to be cas-
lily 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 Sc
curities held as investments, is merely
question of the rate of interest they
draw. Even if they were to remain in
their present form, and the government
were to agree to pay on them rate of
interest, making them desirable as in
vestments they would cease to circu-
late and.take their place with govern
ment, 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
nv~n,, Ia a. - ~l.Jn ~ u
ton Of general measures intended 10 remove n
clearly ascertaned surplus, that is the withdraw
al Of any which are not permanent excess be-
yond the wants of business. Even more mis-
chievous would be any measure which affects the
public Imagination with the fear of an apprehen-
ded scarcity. In a community where credit is
so much used fluctuations in values and vicissi-
tudes in business are largely caused BY the tenn
porary beliefs Of men even before these beliefs can
conform to ascertained realities.
The amount Of the necessary currency at a Civ
en- time cannot be determined arbitrarily, and
should not be assumed in conjecture That
amount is subject to both permanent and tempo
rary changes. An enlargement Of it which
seemed to be durable happened at the beginning
OF the civil war by a substituted use Of currency
in place of individual credits. Ii varies with
certain states Of business. II fiuctuates with con-
siderable regularity at different seasons of the
year. In the autumn, for instance when buyers
Of grain and other agricultural products begin
their operations they usually need TO borrow cap
ital or circulating credit by which to make their
purchases, and want these funds in currency ca
pable Of being distributed in small sums among
numerous sellers.
The additional need Of currency at such times
is FIVE or more per cent. Of the whole volume,
and if q surplus beyond what is required for or
binary use does not happen to have been on hand
at the money centres, a scarcity Of currency en-
sues and also q stringency in the loan market
II was in reference to such experiences that, in
discussion of this subject in my annual message
TO the New York Legislature of January 5, 1878,
the suggestion was made that the federal govern
ment is bound to redeem every portion Of its is
sues which the public do not wish to use. Hav-
ing assumed to monopolize the supply Of curren-
cy and enacted exclusions against every BODY
else, it is bound to furnish all which the wants
Of business require. The system should passive
iy allow the volume Of circulating credits 10 ebb
and flow according to the ever changing wants
of business. II should initiate as closely as pos
sibe the natural laws Of trade which il has super
seeded by artificial contrivances; and in a similar
discussion in my message of January 4, 1876, it
was said that resumption should be effected by
such measures as would keep the aggregate amount
Of the currency sel-adjusting during all the pro-
cess without creating At any time an artificial
scarcity, and without exciting the public imagi-
nation 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 re-
trenchments and wise finance are the means
which the st. Louis convention indicates as pro-
vision for reserves and redemption.
The best resource Is a reduction of the expen-
ses Of the government below its income, for that
imposes no new charge on the people. If how
ever, the improvidence and waste which have
conducted US TO q period of falling revenues,
oblige 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 its own dishonor in order to save
interest on its broken promises, which still COM
pels private dealers to accept at fictitious par.
The highest national honor is not only right but
would prove profitable. Of the public debt $es5,
0O0, 600 bear interest at per cent. in gold, and
STA, 0Oo, 900 At 5 per cent. in gold. The aver
age interest Is SIS per cent.
A financial policy which should secure the
highest credit wisely awaited Of ought gradually
to obtain reduction Of one per cent. in the in
terest on most Of the ether loans. A saving OF
one per cent on the average would be seventeen
millions year in gold. That saving regularly
invested at fur and half per cent. would in less
than thirty-eight years extinguish the principal
The whole 81, zoe, 600, 600 Of funded debt nigh,
be paid by this saving alone, withou; cost to the
people.
The proper time for resumption Is the time
when wise preparation shall have ripened into a
perfect ability to accomplish the object with a
certainly and esse that will inspire confidence and
encourage the reviving Of business. The earli-
e.. time in which such a result can be brought
about il the best. Even when the preparations
shall have been inatured the exact date would
have to be chosen with reference TO The then ex-
is.ing state Of trade credit operations in our own
county, the course Of foreign commerce, and the
condition Of the exchanges with other nations
The specific measures and the actual date mat
ters Of detail having reference 20 ever-changing