The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1876-08-09

/ whatever their former condition., IN
Reform S necessary, declares the ct. Louis
convention, to establish sound currency, re-
store public credit and maintain the national
honor, and IL goes on TO dem nd judicious
system OF preparation, by public economies,
by official reirenchments and by wise finance,
whicn shall enable the ma ion soon 10 assure
the whole world of its perfect ability and Its
perfe-t READINGS to meet any of its promises
The Object demanded by the convention Is
resumption of specie payments of the legal
tender NOES OF the United States, that would
not only restore public confidence and main :
/ tain the national honor but IL would establish
sound Currency for the people. The meth i
DDS by which this object is to be pursued and
the means by which Ii is u be attained are
disclO ed by what the convention demanded
| for the future and by what IL denounced In
the resum ption Of specie payments oy the
government Of the United Stats CO its legal
tender notes would esta b ish specie paymeni S
by all the banks on all their notes The Of
n"ial statement made on the 18th OF May
shows that the amount OF BANK notes was
S3N, ,tOp,0OO, less $50 600 held by themselves,
against the $3.50, ,N, ,0O of notes held-jl4l co.,
200 of legal tender notes, or a little more than
| so per cent OF tn ir amount. But they also
be Id on deposit in the federal treasury as a Sc
enrity for these notes, bonds Ct the he United
ole and current in all foreign moaey mark cts.
La resuming, the banks, even If it were posi-
bic for all the notes to be presented for pay
TO pay S2ep 100 900 OF notes.
WITHOUT CONTRACTING THEIR LOANS
20 their customers or calling on any private
debtor fer payment, suspended banks under
taking to resume, have usually been obliged
TO collect from needy borrowers, means to re-
deem excessive issues and to provide reserves.
A vague fear of distress is therefore often as
sociated with the process OF ofresumption, but
in ne those Ho former 'f instances s" do 'HSs not
now exist The government has only TO make
good its own promises and the banEs can take
care of themselves without distressing any
body. The government is therefore he sole de-
hnQuent. The amount OF legal tender notes OF
the United States now on sanding is lie than
besides thirty -four millions of dollars of frac-
Iional currency. How shall the government
make these notes at all times with refer
ence to the mass which would be
kept in use by the wants OF business
a central reservoir OF coin adequate 10 the a.
national balances, snd as a guaranty against
transient drains artihclaliy created by panic
or by speculation 1t also has to provide fer
the payment in coin OF such fractional cur
rency as may be presenied for redemption
and such incOnsiderab'e y TtiOns of legal ten
ders as individuals may from time 10 time de-
lay by in coin their little store of money, and
so make the coin now in the treasury avail
able for obi 5cts Of this reserve.
TO GRADUALLY sTRENGTHEN AND ENLARGE
THAT RESERVE,
and to provide for such other exceptional de-
mands for coin as may arise, does not seem 10
me work OF difficulty If wisely planned and
discreetly pursued. 1t ought not to cost any
sacrifice TO the business OF the country. Ii
should tend on the contrary to a revival OF
hope and confidence. The coin in the treas
ury on the 3lsL of June, including what is held
seventy-four millions. Tee current OF pre-
cious metals which has flowed out OF our
country for the eleven yeaIs. from July
nearly S760OOOO q year, was 1892 OOO, { o. in the
whole period, OF which S6I7,O,OOO were the
product OF our own mines 10 amass requ
site quantity by intercepting fr m the current
flowing out OF the country and by acquiring
from the stocks which exist abroad without
disturbing the equilibrium Of foreign money
markets, is a result to be easily worked out Oy
practical knowledge and judgment. With re-
spect TO whatever surplus OF legal ten
ders the wants OF business may fall
to save interest, Will be returned
for redemption, they can either be paid or
they can be funded. whether they continue
as currency or be absorbed into the vast mass
OF securities, held as Investments are, is
merely question of the rate OF interest they
draw. Even II they were TO remain In their
present form and the government were 10
agree to pay on them rate ofinterest making
them desire BILE as Investments, they
take SReio their dgASe place with Government 1
state, mu mic pal and other corporate and prf-
vate bonds, of which thousands OF millions
exist among us. In the peri c. ease wi. VIII ch
they be changed from currency into in-
veStments lies the only danger TO be guarded
against, in the adoption in general OF meas
ures Intended to remove a clearly ascertained
surplus that is the withdrawal OF any " hich
are not a permanent excess beyond The wants
o. business.
EVEN MORE MIsCHIEvoUs WOULD BE ANY
MEASURE
which affects public imaginations with the
fear of an apprehended scarcity. In com.
munity where credit is so much used fiuctua-
. Of oil nd viz in huc
are largely caused by the tenn porary beliefs OF
men, even before those beliefs can conform to
ascertained realities. The amount of neces-
sary currency at a given time can not be de-
termined arbitrarily, an should not be as
sumed q col lecture. Tn e amount is subjected
to both permanent and tenn porary char ges. An
enlargement OF IL, which seemed 10 be dur
able. happened at the eginning Of the civil
war by subs ltuted use OF currency In place
OF individual credits. 1t varies with certain
states OF business. 1t Ithuctuates with consider
able regularity at diffeg ent SeasOnt of the year.
In autumn, for instance, when buyers o grain
and other agricultural produc begin their
operations they usually need TO borrow
capital or circulating credits by which to
mske their purchases, and may want these
tributed in small sums among nu5erous
sellers The additional need Of currency at
such times is five or more per cent. OF the
is required ordioary use does not happen
To have been on hand at the money cen,ers, a
scarcity OF currency ensues, and also strin-
gency in the loan market. 1t was in re ference
10 such experiences that, in a discussion OF
this subject in my annual message to the
New York Leg stature. January s, 1875, sug-
gestion was made that the iederaI govern.
ment is bound to redeem every portion of its
issues which the public does not wish to use.
Having assumed to monopolize the supply OF
currency and enacted excursions against
every body else, iG is bound to furnish ali
which the wants Of business require. The
system should passively allow the volume OF
circulating credits
THE EBB AND FLOW ACCORDING To EVERY
CHANGING WANT OF BUSINESS.
1t should initiate as closely as possible the
natural laws of trade which 1t has superseded
by artificial contrivances ;and In asimilar dis
cussion In my message of January 4th, 1876, 1t
was said that resumption should be effected
by sucn measures as would make the aggre-
gate amount OF currency self-adj djussing during