The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1876-08-10

] "
or be absorbed into u vast mass OF secu-
rites held as investments, is merely a
question of the rate Of interest they draw.
! Even ifthey were to remain in theirpres-
ent form, and the Government were to
agree to pay on them rate of interest
making them desirable as investments,
thew would cease to circulate, and take
their place with the Governments, State,
municipal and other corporate and prl'
vate bonds, of which thousands OF MIL
lions exist among us. In the perfect
ease with which they can be changed
from currency into investment lies only
the danger to be guarded against in the
adoption of general measures intended
to remove clearly ascertained surplus
that is withdrawn Of any which are not a
permanent excess beyond the wants OF
business. Even more mischievous would
be the measure which affects public im'
agination with the fear of an apprehend-
ed scarcity. In a community where
credit is SO much used, fluctuations OF
valuations and visissitudes in business
are largely caused by temporary beliefs
of men even before those beliefs can con-
form to ascertain realities,
The amount Of necessary currency at
a given time cannot be determined arbi-
rarily and should not he 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 the civil war by a substituted use of
currency in place Of individual credits,
1t Auctuates with considerable regularity
at different seasons Of the year, In au-
tumn, for instance, when 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 FIVE or more
per cent of the whole volume, and II a
surplus beyond what is required for ordi-
nary use does not happen to be on hand
at the money centers, scarcity OF cur
rency ensues, and also stlingenCy in the
loan market. 1t was in reference to
such experiences, that, in discussion of
this subject in my annual message to the
New York Legislature Of January 5,
1875, a suggestion was made that the
Federal Government is bound to redeem
every portion of its issues Having as
sumed to monopolize the supply of cur
rency and enacted exclusions against
else, it is bound to furnish all
which the wants of business require.
The system should passably allow the
volume of circulating credits to ebb and |
flow according to the ever changing
wants of business. 1t should initiate as
clearly as possible the natural laws of
trade which it has superseded by artiti-
cial contrivances, and in a similar dis
,ussion in my message of January IA,
1876 it was said that resumption should |
be effected by such measures as would |
keep the aggregate amount of currency
3elf-adjusting during all process without
creating at any time an artificial scarcity, !
and without exciting public Imagination
with alarms which impair confidence,
contract the whole large machinery of
credit, and disturb natural operations of
business.
BEST METHOD OF BRINGING ABOUT RE.
SUMPTION.
Public economi, S, official retrench-
ments and wise finance are the means
which the st. Louis Convention indicates
as a provision for reserves and redemp'
tions. The best resource is reduction
of expenses of the Government below
its income, for that imposes no new
charge on the people. If however, the
and waste which have con-
ducted us to a period of falling revenues,
oblige us to supplement the results OF
economies and retrenchmehts by some
resort to loans, we should not hesitate.
The Government ought not to speculate
on its own dishonor in order to save in
terest on its broken promises, which 1t
still compels private dealers to accept at
a fictitious par. The highest national
honor is not only right, but would prove
profitable. OF the public debt, $685.
100000 bear interest at 6 per cent. in
gold, and $7l2,OOOOO0, at per cent in
gold. The average interest is 5,5S per
cent. A financial policy which should
secure the highest credit, wisely availed
of, ought gradually to obtain reduction
of one per cent. in interest on most of
the loans. A saving of one per cent. on
the average would be $l70OO,OOO a year
in gold. That saving, regularly invested
at four and half per cent. would, in less
than thirty-eight years extinguish the
The whole $l,7O0,0OO,0OO of
the funded debt might be paid by this
saving alone, without cost to the peo-
Pile.
. TIE PROPER TIME FOR RESUMPTION
Is the time when wise preparations
shall have ripened into perfect ability
to accomplish the object with certainty
and ease that will inspire confidence and
the reviving of business. The
earliest time in which such result can
be brought about is best, even when
shall have been matured.
The exact date would have to be chosen
with reference to the then existing state
of trade and credit operations in our own
country, and the course of foreign COM
merce and the condition of exchanges
with other nations.