Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1876-08-17

AUGUST II, 4
fractional currency as may be presented for
redemption, and such inconsiderable portion
of the legal tenders as individuals may, from
time to time, desire to convert, for special use,
in order to lay by, in coin, their little stores
of money.
RESUMPTION NOT DIFFICULT.
To make the coin now in the treasury avail
able for the objects of this reserve, to gradual
ly strengthen and enlarge that reserve, and to
provide for such other exceptional demands
for coin as may arise, does not seem to me a
work of difficulty. If wisely planned and
discreetly pursued, it ought not to cost any
sacrifice to the business of the country. 1t
should tend, on the contrary, to revival of
hope and confidence. The coin in the treasu-
ry on the 30th of June, including what is
held against coin certificates amounted to
nearly $74,OO0,00O. The current of precious
metals which has flowed out of our country
for the eleven years, from July 1st, 1866, to
June 3Oth, 1876, averaging nearly $50, ,00O,-
900 a year, was 1882, ,000,0 900 in the whole
period, of which $618,000.000 were the pro-
duct of our own mines. To amass the requi.
site quantity by intercepting from 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 result to be easily worked out by
practical knowledge and judgment
With respect to whatever surplus of 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 fund 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 the government were
to agree to pay on them, rate of interest ma
king them desirable as Investments, they
would cease to circulate and take their place
with government, State, municipal and other
corporate 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 investments lies
the only danger to be guarded against in the
adoption of general measures intended to re-
move clearly ascertained surplus, that is the
withdrawal of any which are not permanent
excess beyond the wants of business. Even
more mischievous would be any measure
which affects the public imagination with the
fear ofan apprehended scarcity. In COM
munity where credit is so much used, Auctua-
tions of values and vicisitudes in business are
largely caused by the temporary beliefs Of
men, even before those beliefs can be conform.
ed to ascertained realities.
AMOUNT OF NECESSARY CURRENCY.
-, The amount of the necessary currency at q
given time, cannot be determined arbitrarily,
and should not be 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 substitu.
ted use of currency in place of individual
credits. 1t varies with certain states of busi-
ness it fuctuates with considerable regular
ity at different seasons of the year. In the
autumn, for instance. when buyers of grain
and other agricultural products begin their
operations, they usually need to borrow capi'
ital or circulating credits by which to make
their purchases, and want these funds in cur
rency capable of being distributed in small
sums among numerous sellers. The addition
tional need of currency at such times is i've
or more per cent. of the whole volume, and if
a surplus beyond what is required for ordina.
~ use does not happen to have been on hand
at money centres, a scarcity of currency en-
sues, and also stringency 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 Jan
uary 5, 1875, the suggestion was made that !;
"The Federal Government is bound to re-
deem every portion Of its issues which the
public do not wish to use. Having assumed
to monopolize the supply of currency and en-
acted exclusions against everybody else, it is
bound to furnish all which the wants of business
REQUIRE" II 'The system should pas
sively allow the volume of circulating credits
to ebb and flow, according to the ever.chang.
ing wants of business 1t should initiate, as
closely as possible, the natural laws Of trade,
which it has euperceded by artificial contri-
vances." And in q similar discussion in my
message of January 4, 1876, it was said that
resumption should be effected "by such meas
ures as would keep the aggregate amount Of
the currency selfadjusting during all the pro-
cess, without creating, at any time, an artifi.
cial scarcity, and without exciting the public
imagination with alarms which impair conf.
dence, contract the whole large machinery of
credit, and disturb the natural operations Of
business"
MEANS OF RESUMPTION.
"Public economies, official retrenchments,
and wise finance" are the means which the
St. Louis Convention indicates as provision
for reserves and redemptions The best re-
source is reduction of the expenses of the
government below its income, for that imposes
no new charge on the people. If, however,
the improvidence and waste, which have con-
Quoted US to a period of falling revenues,
oblige US to supplement the results of econo-
mics and retrenchment by some resort to
loans, we should not hesitate. The govern
ment ought not to speculate on its own dis
honor, in order to save interest on its broken
promises, which it still compels private deal
ers to accept at fictitious par. The highest
national honor is not only right, but would
prove profitable. Of the public debt $685.
100000 bear interest at six per cent. in gold,
and $712, 100000 at five 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 gradu.
ally to obtain reduction of one per cent in
the interest on most loans. A saving of one
per cent. on the average would be $l7,OOO,0OO
year in gold. That saving regularly invest
ed at four and half per cent. would in less
than thirty-eight years extinguish the princi-
pal. The whole $1,700, 100000 of the funded
debt might be paid by this saving alone,
without cast to the people. The proper time
for RESUMPTION is the time when wise prepara.