Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1876-08-11

debtor for payment.
Suspended banks undertaking to resume
have usually been obliged TO collect from
needy borrowers the means TO redeem OK
cessive issues and TO provide reserves. A
vague idea of distress Is therefore often as
socated with the process OF resumption
but the conditions which caused distress in
those former instances 10 not now exist
Tue Government has only 10 make good its
own promises, and the banks can take caro-
of themselves without distressing anybody.
The Government Is therefore the sole delin-
quent.
The amount of the legal tender notes Of
the United States now outstanding is less
than $3.50, O0O, 600, besides S34, 600, 600 of lrac-
tional currency. How shall tho Govern
mcnt make these notes at all times as good
MS specie2 1t has to provide in reference
To the mass which would be kept in use by
the wants of business, central reservoir
of coin adequate TO tho adjustment OF the
temporary fluctuations of international
balances, and as guaranty against tram
silent drains arlilicially created by panic or
speculation. 1t has also to provide for the
payment, in coin, of such fractional cur
rency rs may he presented for redemption,
and such incOnsiderable portions of the le-
gal tenders as individuals may from time
TO time, desire TO convert for SPECIAL use, or
in order 10 lay vim coin their little stores Of
money.
TO make the coin now in the treasury
available for the objects Of this reserve, to
gradually strengthen and enlarge that re-
serve, and to provide for such other eNcep-
tional demands for coin as may arise, does
not seem 10 me work Of difficulty. II
wisely planned aud discreotly purs ued II
ought not TO cost any sacrifice TO TIT bust
ness OF the country. 1t should tend, on the
contrary, to revival OF hope and conii-
dcncc. The coin in the treasury on the
30lh Of June, including what is held against
| coin certificates, amounted TO nearly S14,
100000. The current Of precious metals
| which has flowed out of our country for the
eleven years from July l, 1865, TO June 30,
| 1876, averaging nearly $4,000 coo n year,
was SS32, 100000 in the whole period of
| which SGl7 ,000,0 COO were the product OF our
| own mines. To amass the requisite guam
| tty by inlcrccpting from the current How
| ing out of the country, and by acquiring
| from the stocks which exist abroad with
| out disturbing the equilibrium Of foreign
money markets, is a result Ia be easily
worked ont y practical knowledge and
| judgment.
with respect 10 whatever surplus of legal
| tenders the wants vi business may fail TO
keep in use, and which, IN order TO save
| interest will he returned for redemption,
they can either lie paid or they can he alb.
surbcd into the vast mass of securities held
as Investments, is merely question OF the
rate of interest they draw, even If they
were to remain in their present form, and
| Inc Government were 10 hElcc 10 pay WI
| them rate OF interest making them deslr-
able as myestmen >, they would cease 10
circulate and take their place with Govern
meni, State, Municipal aud other corporate
and private bonds OF which thousands OF
millions exist among us.
In tue perfect ease with witch they can
he changed from currency into investments
lies the only danger 10 he guarded against
in the adoption OF general measure III
tended 10 remove clearly asceiialned sur
plus, that is, the wi,hdrawal 81 any when
are not q permanent excess beyond Tue
wants OF business. Even now mischioVous
would be any measure which would affect
the public imagination with the fear OF APP
| preLeuded scarcity Ia Il community where
credit is 50 much used. Fluctuations and
vlcissitudes in business ale largely caused
by the Temporary beliefs OF mcl even be-
fore those be'ieis eau conform 10 asceIlaln-
ed realities.
The amount of necessary currency ut Il
given time cannot be determined aibiirarl-
~, aud should not be assumed on connect
urp. That amount is subject To both per
maucnt and temporary changes. An en-
laroement OF it, which seemed 10 be durl'
BILE happened at the beg inning OF the civl
war bv substituted USE OF currency III
Mace Of individual credits. Ii varies with
certain states of business; 1t lucluate'
with considerable regularity nj different
seasons OF the year. In autumn, Tor in
stance. when buvcIs OF grain and other az
ricuituial products begin their operations
thew usually need to borrow capital or cir
culating credits, by which To make theil
purchases, and want the sc FUNDS ~ curren
cy, capable of being distributed III SINAI
sums among the numerous sellers. The
additional need of currency at such time'
is five or more per cent. of the whole vol
ume, and il a surplus beyond what IS re
duired for ordinary use does not happier
TO have been ON hand al the money centres
a scarcity of currency ensueS auu also ;
! stringeucy in the loan market.
Ii was in reference To such experience
that in a discussion OF this subject in ny
annual message to the New York Legisla
: ture Of January J, 1875, the suggestion wa
: made that the Federal Government i
bound to redeem every portion of its issue
which the public do not wish to use. Hav
ing assumed to monopolize the supply o
currency, and enacted exclusions agains
every body else, it is bound to furnish al
which the wants of business require.
= The system should positively ALLOW
the volume of circulating credits to eb'
= | and flow according to the ever changing
wants Of business. 1t should Initiate a
closely as pOSsil L. the natural laws OF trade
i which it has superseded by artificial con
trivances and in similar discussion, II
my message Of January 1, 1876, il was sat
&, that resumption should be effected by sucl
U measures as would keep the aggregat
> amount of The currency selfadiusting, dur
: ing all the process without creating, at an.
J time, an artificial scarcity, and without ex
= citing the public Imagination win alarms
u which Impair confidence, contract III
) whole large machinery Of credit and els
: turb the natural operations OF business.
Il Means of resumption, public economies
= official retrenchment aud wise finance ar
! the means which the st. l. uis Conveniio
!, indicates. As provision Tor reserves an
. redemptions, the best resource.i is redut
y ton of the expense OF the Government he
n low its income, for that imposes no ne'
II charge on the people. II, however, III
q improvidence and waste which have cor
IL Quoted us to a period Of falling revenue
y oblige us to supplement the results of ecor
;, omies and retrenchments by some resort
q loans, we should not hesitate. The Gov
y eminent ought not TO speculate on lis ow
i dishonor in order to save Interest on II
~ broken promises, which il still compe
Y. private dealers to accept at fictitious pa
IT Tho highest National honor is not Onl
E right, but would prove profitable.
q" OF the public debt $685., OOO, 900 bear int
l. est at 6 per cent. in gold and S7l2, 100000
"a 5 per cent. in gold. The average inleres,
NJ S. per cent. A financial policy whiC
ls should secure the highest credit availed
AZ ought gradually to obtain reduction
~ one Der cent in the interest on most of Il
+ loans. 4 saving of one per cent. on Il
~, average would be Sl7 200, 900 year in gol
% The saving regularly invested at Al pr
II cent would in less than IS years, extii
a. guish The principal. The whole seventee
"a hundred millions of the funded debt mig
If be paid by this saving alone, without co
10 to the people.
i ~ The proper time for resumption is Il
time when wise preparations shall ha'
IN ripened into perfect ability TO accompli'
~ the object, with a certainly and ease th
q. will inspire confidence and encourage Il
ar revving of business. The earliest time
al which such a result can be brought abo
al ia the hest Even when the DrepI ratio