The Bolivar bulletin. [volume] (Bolivar, Hardeman County, Tenn.) 1865-1888, 1876-08-17

sI4I, 100000 legal tender notes, or a
little more than fifty per cent of their
amount; bat they also held on deposit in
the Federal Treasury, as security for
these notes, bonds of the United States
worth in gold about $500, 100000, avail
able aud current in all foreign money
markets. In resuming, the banks, even
if it were possible for all their notes to
be presented for payment would have
500,000,000 of specie funds to pay
$3.50, 100000 of notes, without contract
ing their loans to their customers or call
ing On any private debtor for payment
Suspended banks undertaking to resume
have usually been obliged te-collect from
needy borrO wers the means to redeem
exces siye issues, and to provide reserves.
A vague idea of distress Is, therefore,
often associated with the process of re
su mption, but the conditions which
caused the distress in those former IN
stances do not now exist The Govern
ment has only to make good It's own
promises, 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
OulbSu u OEdtSS uOW OUTSTANDING 10 lo5o
than S370 100000, besides S34, 100000 of
fractional currency. How shall the
Government make these notes at all
times az good as specie 1t has to pro-
vide in reference to the mass which
would be kept in use by the wants of
business, a central reservoir of coin ade-
quate to the adjustment of the temporary
fluctuations of international balances,
II
drains artifcially created by panic or
speculation. 1t has also to provide for
the payment in coin Of such fractional
currency as may be presented for re-
demption, and such ineonSiderable por-
tiOns of legal tenders as individuals may
fl ON time to time desiae to convert for
special use, or ia order to lay by in coin
their little stores of money. To make
the coin now in the Treasury available
for the objects of this reserve, to grad
ually strengthen and enlarge that re-
serve, and to provid for such other ex-
eeptional dem lnds for coin as may arise,
does not seem to me work OF difficulty.
If wisely planned, and aiscreetly plr-
sued, it ought not to cost any sacrifice to
the business of the country. 1t should
tend, on the con trary, to q revival of
hope and confidence.
The coin in the Treasury on the 30th
of June, including what was held against
coin certificates, amounted to nearly S74,
| 600, 600. The current of precious met
ais which has flowed out of our country
for the eleven years from July 1, 1865,
70 June 80, 1896, averaging nearly $76,-
600, 900 a year, was S. 2O00,0 900 in the
whole period, of which S6I7, 900, ,00U
were the product Of our own MINIS.
To amass the requisite quantity by in
tercepting from the current flowing out
of the country, and by acquiring from
stocks which exist abroad without dis
turbiDg the equilibrium Of foreign money
markets, is a result to be easily worked
out by practical knowledge and judg-
ment 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 con-
tiuue as currency or be absorbed into the
vast mass of securities held as invest
ments, is merely a 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 a rate of interest making
them desirable as investments, they
would cease to circulate, and take their
place with Government, State, munici :
pal 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 in
vestmeuts lies the only danger to be
| guarded against In the adoption of gen.
| eral measures intended to remove a
clearly ascertained surplus; that is, the
withdrawal of any which are not perm
auent excess beyond the wants of bust
| ness. Even more mischievous would be
| any measure which affects the public
| imagination with fear of an apprehended
| scarcity In a community where credit
! is so much used, fluctuations of values
and VicissItudes in business are largely
caused By temporary beliefs of men, even
| before those beliefs can conform to ascer-
tanned realities.
The amount of necessary currency at
! a given time can not be determined arbi-
trarily, and should not be assumed on
! conjecture. That amount is subject to
| both permanent and temporary changes
An enlargement of it, which seemed to be
| durable, happened at the beginning OF
rency in place of individual credits. 1t
varies with certain states of business
1t fuctuates with considerable regularity
at different seasons of the year In the
autumn, for instance, when the buyers
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
numerous sellers. The additional need
of currency at such times is one or m0re
per cent of the whole volume, and If
surplus beyond what Is required for or
dinary use does not happen to have been
on hand at the money centers, a scarcity
of currency ensues, and also a stringency
In the loan market
1t was IN reference to such experiences
that IN g discussion Of this subject in my
annual message to the New York Legis-
lature, of January 5, 1875, the suggestion
was made that the Federal GoVernmr ut is
bound to redeem every portion Of It's
issues which the public do not wish to
use Having assumed to monopolize the
supply of currency and enacted ezciu-
sions against everybody else, it is bound
to furnish all which the wants of business
require. The system should passiveIy
allow the volume of circulating credits tC
ebb and flow according to the ever chang
ing wants of business 1t should initiate
| SIS closely as possible natural laws oil
trade, which it has superseded By ar
! tifieial c1utrivancns And IN q sin. 10 .