The Hartford herald. [volume] (Hartford, Ky.) 1875-1926, 1876-08-23

rent flowing out of the country, and by
acquiring from the stocks which exist
abroad, without disturbing the cqui-
librium of the foreign money market, is
result to be easily worked out bv
practical knowledge and judgement.
With respect TO whatever surplus OF
lcgal-tcndcr the wants of business may
fail TO keep in use, and which in order
to save interest will be returned for re-
demption, they can either he 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 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 rate of interest
making them desirable as investments,
they would cease To circulate and take
their place with the Government, State,
municipal and other corporate and
private bonds, of which thousands of
millions exist among us. In the per-
feet ease with which they can he
changed from currency into invest
mcn:S, lies the only danger to be guard
cd against in the adoption of general
measures intended to remove 4 clearly
aScertaincd surplus, that IS the with
drawal of any which are not 4 2erma-
ncnt excess beyond the wants of bust
ness. Even more mischicvous would
be any measure which effects the public
imagination with the fear of an apprc-
hendcd scarcity. In community
where credit is 81 much used, huctua-
tions of values and viciSSitudcs in bust
ness are largely caused by the temporary
beliefs of men, even before those he
licfs can conform to a.certained reali-
ties.
The amount of necessary currency at
Il given time cannot he determined arbi-
trarily, and should not he consumed on
conjecture. That amount is subjected
To both permanent and Temporary
changes. An enlargement oft, which
seemed to be desirable, happened at the
beginning of the civil war, by substi-
tutcd use of currency in place of indi-
vidual credits 1t varies with certain
states of business. 1t huctuates with
considerable regularity at different sea-
SONS of the year. In autumn, for in
stance, when buyers of grain and other
agricultural products begin their oper-
ations, they usually used 10 borrow cap
ital or circulating credits with which to
make their purchases, and want these
funds in a currency capable of being
distributed in small sums amongnumer-
Gus sellers. The additional need of cur
rency ut such times is five or more per
cent. Of the whole and if surplus be-
yond what is required for ordinary use
does not happen to have been on hand
at money centers, scarcity of curren-
cy ensues, and also stingency in the
loan market. 1t was in reference TO
such experiences that, in a discussion
of this subject in my annual message
10 the Now York Legislature of JAN
uary >, 1919, the suggestion wos made
that the Federal Government is bound
to redeem every portion of its issues
which the public does not wish to use.
Having assumed to monopolize the sup
ply Of currency, and enacted exclusions
against everybody 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 and flow according to the ever
changing wants of business. 1t should
initiate as closely as possible the natur-
al laws of trade, which it has super
coded by artificial contrivances. And
in 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
amountOf currency Selfadjusted during
all the process, without creating at any
time an artificial scarcity-without ex-
citing the public Imagination with
alarm, which impair confidence and
distract the whole machinery of credit,
and disturb the natural operations of
business.
SINCE the General Conference of
the Methodist Episconal Church in