Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1876-02-04
How the Currency Was Contracted. .


A rEw singular persons met in Blooming
ton this week and resolved very modestly
that they represented the farmers Of Illinois.
They next proceeded to instruct Congress
in the mystery OF currency, finance, interest,
discounts, banking, bonds, taxes and other
cognate subjects. A gentleman now residing
In Virginia, formerly well known In this city
and in Wisconsin, who happened - be pres
cnt, was called on for a speech. The report
says in regard TO his remarks:
Mr.. Daniels OF Virginia addressed the Conyen-
tion, showing conclusively that the business de-
adoption OF the system OF contraction OF the cur
fency Of the country. The speaker demanded that
II the Government loan money to banks upon the
security OF the $50 bonds Il should make loans to
private citizens whenever they present the same
security as the National Treasury, thus placing all
on equal terms. MIR. Daniels Is convincing
speaker
Whether these remarks were intended as
ironical or facetious is not clear. They can
hardly have been offered seriously. Col.
Daniels knows very well that when the fnan-
cial panic burst upon the country in the aus
tumn of 1873 the currency of the United
States was inflated beyond precedent. We
collate tho following figures from official
sources, showing the amount Of currency in
circulation ut three periods, viz. six months
after the collapse bf the rebellion, Just be.
fore the panic, and at the close Of 1875, viz.
In October, 1865, six months aftef the
RS follows:
U. s. notes and fractional currency SI5I 91s. .OSs
National Bank notes. 1s5LO0000
State Bank notes. s..''''''i'....'.'''.... 60OOOOOO
Total Ct eulation STo4 21s OBS
In September, 1873, before the panic the
circulation, according to Senator Sherman,
was:
United States notes. SS56 1000 900
fractional currency. .............. 45OOOOO0
National Bank notes ..........,,...... S39O0O,O00
t74OOOO,OOO
Add from the reserve Of $45 100000
issued by Secretary RichHdson...... 260OO,0OO
Total circulation ................-. $766 900 900
In December, 1875, the circulation, as ofl
cially reported, stood thus:
United States notes. 1873 ~, $50
tractiona! currency cy.....'............ 81 l45 5J3
Total circulation n..,.....,.!.....$T $T6S, ,7S5, ,9Si
The summer after the war ended the coun-
try was flooded with currency which amount
ed in the aggregate to fraction over seven
hundred millions; and gold ranged between
145 and l49 from the time OF the downfall of
the Confedcracy until the end Of that year,
and its gold value or purchasing power was
sc to 6S per cent. of specie.
In the summer before the panic the cur
rency had been inflated thir!y-six millions
over the volume of 1865, and 1t was quoted
at ia to ll9, which gave it purchasing
power of eighty five to lightweight cents in
coin. 1t was thus doubly expanded-trst,
by t36,0O0,0O0 in quantity, and second,
twenty cents in gold value of every dollar.
After the panic the Secretary of the Treas
ury, Richardson, issued S26,00O,0O0 of the
retired grcenbacks in the vain hope of restor-
ing public confidence and arrcsting the col
lapse. In the fall of 1873, and throughout
1874, the currency stood at an average of
$766, 600 coo, and its value at eighty-eight to
ninety-thrcc per cent. which added largely to
its purchasing power. A couple of months
ago the currency amounted to nearly S770,-
100000, and its value is now lightweight to
eighty-nine per cent. on the dollar.
In view of these stubborn facts, what war
rant had Col. Daniels, of Virginia, for as
sertng that 80 the business depression of the
country commenced with the adoption of the
system of contructiontn The fact is, no
system of contraction had been adopted;
but, on the contrary, the currency had been
steadily inflated until the pressure Of gas
blew the head out Of the boiler, and inflated
credits, inflated prices and inflated specula-
tion exploded together in one tremendous
crash.
Col Daniels demanded that If the Gov
eminent loan money to the banks upon the
security of $50 bonds, 1t should make loans
to private citizens whenever they presented
the same security ut the National Treasury,
thus placing all on equal terms"
The Colonel appears to have overlooked
the fact that the last Congress passed Free
Banking act, whereby all citizens may obtain
notes on the security of bonds-90 of notes
for 100 of bonds, and by complying with
some other provisions in regard to rcdemp-
tion, deposits, loans, taxes, stamps and
sworn returns Of conditions.
Now, If Col. Daniels has any friends who
want the Government to lend them notes"
here is chance. II any Changers want to
profit at the same time, the Free Banking
law opens the way for them to help Danish
contraction and make their everlasting for
tunes at the same time.-Ch 'cdqo Tribune.
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