Marshall County Republican. (Plymouth, Ind.) 1856-1878, 1876-08-10

would not only restore the public
credit and maintain the national hon
or, but it would establish a sound
currency for the people. The meth
DDS by which this object is to be pur
sued and the means by which it is to
be attained are disclosed by what the
convention demanded for the future
and by what it denounced in the past.
The resumption of specie payments
by the government Of the United
States on its legal tender notes would
establish specie payments by all the
banks on all their notes. The official
statement made on the 18th OF May
shows that the amount of bank-notes
was S300,00O,0 900, less $20,0OO,OOO held
by themselves. Against these $780,
100000 of notes the banks held $140,-
100000 of legal-tender notes, or a lit
amount, but they also held on deposit
in the federal treasury, as security for
these notes, bonds Of the United
States worth in gold about S360,OOO,-
available and current in all foreign
money markets. In resuming, the
banks, even if it were possible for all
their notes to be presented for pay
ment, would have $500, 100000 Of spe-
Gle funds to pay $3.50, 900 of notes
without contracting their loans to
their customers or calling on any pri-
vate debtor for payment. Suspended
banks, undertaking to resume, have
usually been obliged to collect from
needy borrowers the means to redeem
ho ioonac anH n nrnuida
reserves. A vague idea OF distress is
therefore often associated with the
process Of resumption, but the con-
ditions which caused the distress in
those 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 anybody. 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,O0O, 900,
besides 100000 of fractional cur
rency. How shall the government
make these notes at all times as good
as specie? 1t has to provide in refer
ence to the mass which would be kept
in use by the wants of business a cen
trail reservoir of coin adequate to the
adjustment OF the international bal
ance and as a guaranty against lie
transient drains artificially created by
panic or by speculation. 1t has also
TO provide for the payment in coin OF
such fractional currency as may be
presented for redemption, and such
inconsiderable portions of legal-ten-
ders as individuals may from time to
time desire to convert for special use
or in order to lay by in coin by their
little stores OF money. TO make the
coin now in the treasury available for
objects of this reserve TO gradually
strengthen and enlarge that reserve,
and to provide for such other excep-
tional demand for coin as may arise,
does not seem to me to be work OF
difficulty. If wisely planned and dis
creetly pursued, it ought not to cost
any sacrifice to the business Of the
country. 1t should tend, on the con-
trary, to the revival OF hope and con-
fidence. The coin in the treasury on
the 30th OF June, including what is
held against coin certificates, amount
ed to nearly $74,0OO.OOO. The current
of precious metals which has flowed
out of our country for IL years from
July 1, 1865, to June 80, 1876, averag
ing nearly $76,000,0O0 a year, was
$780,, 600, 900 in the whole period, OF
which $617 10000 were the product
of our own mines. To amass the re-
quisite quantity by intercepting from
the current flowing out Of the coun-
try, and by acquiring from the stocks
which exist abroad without disturbing
the equilibrium Of foreign money
markets, is result to be easily work
ed 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 mass OF
securities held as investments Is
merely a question OF the rate OF in
terest they draw. Even il they were
to remain in their present form, and
the government were to agree TO pay
on them a rate of interest making
them desirable as an investment, they
would cease to circulate and take
their place with the government, state,
municipal, and other corporate and
private bonds of which thousands of
millions exist among US. In the per-
feet ease with which they can be
changed from currency into invest
hA mi u n "a
guarded against. In the adoption OF
general measures intended to remove
clearly ascertained surplus, that is,
the withdrawal Of any which are not
q permanent excess beyond the wants
of business, even more mischievous
would be any measure which affects
the public imagination with the fear
OF an apprehended scarcity, in a
community where credit is so much
used. Fluctuation OF values and vi
cissitudes in business are largely
caused by temporary beliefs Of men
even before those beliefs can conform
to ascertained realities; the amount
OF necessary currency at a given time
cannot be determined arbitrarily and
should not be assumed on conjecture.
That amount is subject to both per-
manent and temporary changes. An
enlargement Of it, which seemed to be
durable happened at the beginning Of
the civil war, by a substituted use OF
currencyin place OF individual credits.
1t varies with the certain state of bust
ness. 1t fiuctuates with considerable
regularity at different seasons OF the
year. In the autumn, for instance, when
buyers of grain and other agricultu-
raj products begin their operations
they usually need to borrow capital
or circulating credits, by which TO
make their purchases, and want these
funds in currency capable OF being
distributed in small sums among nu-
merous sellers. The additional need
of currency at such times is five or
more per cent. OF the whole volume,
and if surplus beyond what is need
ed for ordinary use does not happen
to have been on hand at the money
centres, scarcity ensues. and also
stringency in the loan market. 1t
was i'm reference to such experiences
that in the discussion of this subject
in my annual message to the New
York Legislature of Jan. 5. 1875, the
suggestion was made that the feder-
al government Is bound to redeem
every portion of its issues which the
public do not wish to use. Having
assumed to monopolize the supply Of
currency and enacted exclusions
against everybody else it Is bound TO
furnish all which the wants of bust