Staunton vindicator. [volume] (Staunton, Va.) 1860-1896, 1878-06-07

Compound interest legal ten
der notes, .:... .......... PIT ,o24, 100
Seven thirty notes, ...."...".... S30, 10000
U. S. legal tender notes, 433, 100. $50
Fractional currency, ........... 26, 344, AZ
Making the enormous aggre-
gate OF .".Sl ,bZo. $40 ,oUl
But to get at the true amount
of paper then in circulation
we must add the amount OF
National Bank notes, viz: 176, 213, 955
Which swells the sum total to 81 sol ,790, 456
Thus it will be seen, that in 1865 the ag-
gregate of paper in negotiable form
which, practically formed part OF tn
currency, amounted to the prodigious
sum of
EIGHTEEN HUNDRED AND ONE MILLION
OF DOLLARS.
This was an imitation which greatly ex-
ceeded anything ever known before in our
history
To redeem this paper at once in specie,
would have required all the coin of the
world. Immediate redemption was there
fore impracticable; it must be the work of
time. To prepare for it, it became neces-
sa1y to resort to a vigorous system of con-
CIdCUlOu. LIZ cucCb IulS, wv luOucS W0I6
adopted: 1st. by funding, that is by ex
changing bonds for the outstanding notes
and certificates, and I'd, by retiring and
cancelling such as were paid into the
Treasury and we're not necessary for cur
rent expenses. These processes have been
carried on with great energy and success,
asewill be presently stated. AS the process
of contraction progressed, the value of the
government paper, relatively to gold,
steadily increased, or in other words the
premium on gold declined.
In 1865 the premium on gold was44 cents
On the dollar. Recently it was but one
fourth OF one per cent. 1t is true that
within few weeks past the premium has
increased to one per cent; but that is due
to temporary demand for gold, created by
the sale, by the government, of fifty mil
lions Of Al per cent. bonds, for gold. When
these bonds are paid for. the demand will
cease, and gold again decline, and it is
confidently expected til at on or before LIST
January, 1879, greenbacks will be of equal
value with gold, and provision has been
made for their redemption in gold at that
date.
Having thus ascertained the aggregate
of currency in circulation at the close of
the war in 1865, the next step in our in
quiry is to ascertain the amount now in
circulation, so that, by deducting one from
the other, we can ascertain the amount Of
contraction which has been effected.
The Comptroller of the Currency, on
page 164 of his last report, informs us that
the following items composed the paper
money then in circulation:
U. s. legal tender treasury
notes.. ........ .......".." 1851 $40, 1888
Old demand notes. 63,702
Fractional currency........... Is, 043, 020
Aggregate of U. S. Notes .--
ofall kinds ........ ............ $685., AT ,O1O
Add bank notes in circulation $500, 631, 719
Aggregate of both classes --
Of currency. ."....... ......... 5000 O7s, 729
Now, if we deduct this amount from the
entire volume of paper in circulation in
1865, it will be found that the aggregate
reduction in the volume of currency, with
in little more than twelve years, has been
eleven hundred and eleven millions of dol.
lars! or at the rate of nearly one hundred
millions in eac Ii year; or, to state the pro-
position in another form, nearly two-t thirds
OF the whole currency has been withdrawn
from circulation within that brief period,
and we have now but six hundred and
ninety millions OF currency meet all the
demands of business, instead of eighteen
hundred and one millions.
Here then, we have plainly revealed to
us the cause of the scarcity of calculations;
the pressure in the money market, the
hard times, and the inability of the people
to meet their engagements. No just COM
plant can be made against the government
for adopting policy uf contraction. 1t
was stern duty it is true but, nevertheless
duty. Without contraction, it is obvious
that specie payments could not be resumed,
nor could business be placed ON sound
and healthy basis-golG and silver are the
currency of the worid-they are the .ly
recognized measul es OF standards of value
amung all the nations of the earth For
us to attempt: to ignore this fact and to
carry on business with a different stand
ard, would be to isolate ourselves from
commerce with foreign countries.
THE CONTRACTION ENDED.
In your letter to me, you substantial lly
enquire when is this system OF cont raction
to cease? and what is the prospect of an
improved condition of our financial affai rs?
[ am happy to respond that IL has ceased
To use a homelY, but expressive phrase,
I've have touched bottom" We have seen
the worst and [ confidently predict that at
an early day we shall witness mark ed re-
vival of business and a gradual but sure
return of prosperity.
These are not idle words prompted by
an over sanguine temperament They are
the results of a careful consideration of
unquestionable facts, which | will now
place before you, that you may judge how
far they justify the conclusions which I
have drawn from them.
l think we may safely assume, that if
steady contraction of the currency,
relentless turning of the screw in the line
hlo 1n1f r>r E,,., sol 4.
tress, gradual expansion of the currency,
a reverse movement of the screw will pro-
duce an opposite effect. This is just what
we are now about to xperience.
That the process of contraction has
gone as far as it ought to go. is demon
strated by the fact that United States
treasury notes are now almost, and in a
few months, will be altogether equal to
gold. The object of.the cuItailment was
to effect this result, and it having been
attained, there can be no rational motive
for continuing it further. But, if any
were disposed to apprehend further dan
ger IN this direction need only say, that
within the last ten days Congress has by
law forbidden any further contraction.
we have then Che present amount of
treasury notes and fractional currency es-
tlmated at three hundred and fifty mil
culatlons.
we may also safely assume that the Ma
tional banks will not make any material
reduction of the amount of theil notes, es-
timated at three hundred and twenty mil
lions. now in circulation, because their in
terests forbid any such reduction. We
may then rest satisfied that the present
volume of paper currency, amounting lin
Guiding fractional currency IN round
numbers, to six hundred and ninety mil
ions, cannot be reduced.
And here let me remark that every dol
ar of this currency is equivalent to gold.
md after the LIST day of January next will
,e exchangeable for gold.
INCREASE OF THE yO LIME
OF CURRENCY.
Now, let us inquire whether there is a |
respect of an increase of the volume of |
vu,1,s will So -.