Buchanan County bulletin. [volume] (Independence, Iowa) 1869-1891, 1877-08-17
Currency and Contraction.

The theorists who speak for the Green
back party place their main reliance for
party capital on the unwarranted as
sumption that the hard times are caus-
ed by contraction of the currency. The
pretended facts by which they attempt
to prove this theory are even more fan
ciful and unsubstantial than the theory
itself. In fact, it is when they venture
into the domain of fact that they get in
to deep water and appear to the least
advantage. Thus we find them attempt
ing to tell how fearfully the currency
has been reduced in volume since the
incumbency of Secretary Sherman, and
charging with unctuous feeling upon
the holocaust of greenbacks constantly
going on at the Treasury Department.
In this way, they say, the Secretary is
depicting the country of the means to
do business, and striking at the founda-
tons of it's prosperity. In this cam
paign of ignorance or worse, we find one
of their leaders estimating the destruc-
ton of greenbacks during Secretary
Sherman's administration of the Treas
ury at s15O,OOO,O6O per month! Anoth-
er leading apostle of that faith places
the sum destroyed since the 4th of
March at $6OOOOO,OOO!
Now what are the facts of this partic-
ular case? Fortunately we have a
statement of them from Secretary Sher-
man himself, in letter to Ex-Gov.
Stone of this State, a portion OF which
is published in the Knoxville Voter, OF
a late date. In that letter, which is
dated July %, 1877, the Secretary says:
''There has been retired of legal tender
notes since the 4th of March last only
the sum of $4,475, 1872" and then he goes
on to show that this does not work con-
traction of the currency of the country
even to that extent, but rather imitation,
as follows:
I'm this connection permit me to state that
the third section of the act of Jan. IA, rs the
RESUMPTION act) contains the only authority
under which legal tender notes can be retired
from circulation. Under the provisions OF
that section, which removed the limit or the
issue of national Bank notes, 1T was made the
duty of the Secretary of the Treasury. upon
further issue of such bank notes, to retire the
legal tender United States notes III excess % %
$500 600, 600 to the amount of so per centum OF
the sum of the National Bauk notes SO issued:
1t will be seen that for every eighty dollars OF
legal tender notes thus retired there mas DeeIl
issued of National Bank notes the sum OF one
hundred dollars; which notes are redeemabie
in legal tender notes upon their presentation
at the bank issuing them, and to secure such
redemption the Government holds an ample
deposit of United States bonds made by the re-
spective banks for that purpose
Some of our eaders may or may not
know that by the act of January IA,
1875, the limit upon National Bank capt.
tai and circulation was removed, and the
business thence forth become free for
any body who could deposit the requis-
lite security. But, to guard against un-
due imitation of the currency under this
system. it was provided that for every
dollar of increase in National Bank
notes, eighty per cent. Of the same In
legal tenders should be retired until the
volume of the latter got down to $780,
100000 These National Bank notes,
as every body knows, are on a level with
greenbacks, accepted as freely in all
business transactions. Thus we find
that instead of contracting the circulat-
ing medium to the extent OF four and
one half millions, Secretary Sherman
has really expanded it nearly one million
dollars. But there are other points in
this letter Of Secretary Sherman We
quote from the Voter:
But we give you still further figures troIa
the same letter of the Secretary, taken from
the official records. There is now more money
outstanding than there was at any perlod our
ing the flush times-prosperous days-from
1867 to the panic of 1878, when money was plen-
ty and real estate and it's products reached the
highest price. $3.50 ~
In 1868 there was in circulation only $3.50, OOO,
600 of greenbaeks; in 1863 only S5S sSS 9o5: IN IN
1872 but $357, 5O0,0 OO On the first day OF Janu-
ary, 1873 there was $35S, ,907 in circulation.
which, on the first day of January, 1874, mad
been increased to 1878 4Ol 72 in order TO relleVe
the panic AT the date of the letter we are
quoting FROM there were still $500 OOOO 600 OF le-
gal tenders remaining Notwithstanding the Vo-
ciferous howl about contraction. being Jour
millions more than we had during the four most
prosperous years this country has ever known.
n