The Democratic press. [volume] (Ravenna, O. [Ohio]) 1868-1901, 1876-08-10


readiness TO meet any of its promises
at the call of the creditor entitled to
payment" The object demanded by
the convention is resumption of
specie payments on the legal tender
notes Of the United States. That
wonld not only restore the public
or, but it would establish a sound
for the people,. The meth
ods by which this object is to be pur-
sued, and the means by which it is to
be attained, are disclosed by what the
demanded for the future
and what it denounced in the past.
Resumption of specie payments by
the government of the United States
on its legal tender notes, would estab-
lish specie payments by all the banks
on all their notes. The official state
ment made on the 18th of May shows
that the amount of bank notes was
S3OO,OOO,O0O, less S20,OO0OO0 held by
themselves. Against these $780, O,OOO,-
600 legal tender notes, the banks held
SAL 100000 of legal-tender notes, or
a little more than fifty per cent. of
their amount but they also held on
deposit in the national treasury, as Sc
curity for these notes, bonds of the
United States worth in gold, about
$500 100000, available aud current in
all foreign money markets. In re-
cunning, the banks, evea if it were
possible for all their notes to be pre-
sented for payment, would have 500.
100000 of specie funds TO pay $780,
OOO,OOO of notes, without contracting
their loans TO their customers or call
ing OIL any private debtor for pay
memt. Suspended banks undertaking
to resume have usually been obliged
TO collect ffom needy borrowers
means 10 redeem excessive issues aud
provide reserves. A vague idea, OF
distress is therefore often associated
with the process Of resumption. But
the conditions which caused distress
illSthOse former instances do not now
exist. The government has only to
make good its own promises, and the
banks can take care OF themselves
without distressing any body. The
government is, therefore, the sole de.
linQuent. The amount of legal ten
der notes of the United States now
outstanding is less than $370,OOO, 600,
besides S34 ,OOO, 600 of fractional cur
rency. ..4....... .-...- 81. II"
now shall the government make
these notes at all times as good as spe-
Gle? 1t has TO provide, In reference
to the mass which would be kept In
use by the wants OF business, q central
reserve Of coin adequate to the I'D
justment OF temporary fluctuations OF
international balances, and as guar
antee against tranciemt drains artifi
cially created by panic or by specula-
ton. Ii has also to provide Tor The
ment in coin Of such fractional
currency as may be presented for re-
demptiOm, aud such uncomfortable
portions of legal tenders as indivldu.
ais from time to time desire to convert
for special use, or in order to lay by
in coin their little stores oi money.
TO make the coin now in the treas.
ury available for objects OF This re.
serve, TO gradually strengthen and ell
large that reserve, and to provide for
such other exceptional demands fol-
coin as may arise, does not seem ia
me work OF difficulty. Ii wisely
planned and discreetly pursued il
ought not to cost any sacrifice to the
business OF the country. 1t should
tend, on the contrary, 10 revival OF
hope and confidence.
The coin in the Treasury on the 30tl
ofJune, including what 10 held against
coin certificates, amounted to nearly
$73,OOO,OO0. The current Of precious
metals which has flowed cut of oui
country for the eleven years from
July lst, 1865 to June 3Oth, 1876, av.
eraging nearly SIG, 100000 year, waf
1892 100000 in the whole period, Oi
which $6l7 100000 were the product
of our own mines. To amass the req.
uisite quantity by intercepting iroul
the current flowing out of the country
and by acquiring from stocks which
exist abroad. without disturbing the
equilibrium of foreign money markets
is . result to be easily worked out by
practical knowledge and judgment.
With respect to whatever surplus oi
legal tenders the wants of business
may fail to keep in use and which, in
order 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, 10 merely question
OF the rate OF interest they draw.
Even if they werc to remain in their
present form, and tine government
agree to pay on them rate of inter
est making them desirable as invest.
ments, they would cease to circulate
aud take their place with the govern
lie and private bonds, OF which thou
sands Of millions exist among US. In
the perfect ease with which they can
be changed from currency into invest.
ments lies the only danger to be guard.
ed against in the adoption Of general
measures intended to remove clerrly
ascertained surplus that is, the with
drawal OF any which are not a per.
manent excess beyond the wants OF
business. Even more nlischievou,
would be any measure which affects
the public imagination with the fear
of an apprehepded scarcity. In a
community whore credit 10 so MUCH
used, the fluctuations in values and
vicissitudes in business are largely
caused by the temporary beliefs ol
men, even before those beliefs can
conform to ascertained realities.
The amount Of necessary currency
at IL given lime cannot be determined
arbitrarily, and should not be assum.
ed OH conjecture. That amount il
subject TO both permanent and tempo.
rhry changes. An enlargement of it,
which seemed 10 be durable, happen.
ed in the beginning of the civil war by
substituted use Ot currency in place
OF individual credits. IL varies with
certain states of business il ductuates
with considerable regularity at differ
ent seasOHs of the wear. In the au-
tumn, for instance, when the buyera
Of grain and other agricultural pro-
ducts, begin their operations, they
usually borrow capital, or circulating
credits, by which TO make thoir pur-
chases, and want these funds IN eur
rency capable OF being distributed In
small sums among numerous sellers.
The additional need of currency al
such times 10 five or more per cent. OF
the whole volume, aud il a surplus
ley9nd what 10 required for ordinary