Buchanan County bulletin. [volume] (Independence, Iowa) 1869-1891, 1878-09-06

largely in payment of the officers anC
soldiers mustered out of the service
and were used by them in turn in pur
chase of houses, stores, lands and mer
chandise, so that they gradually passec
from the hands of the people, and were
absorbed by saving banks, nationa
banks, insurance companies, and by
bankers in New York who sent then
abroad for sale, as our own people coulC
more profitably invest their money thar
to hold these government securities
bearing what was then considered low
rate of interest compared with the cur
rent rate.
THE THIRD PERIOD
in our currency legislation begins with
this act of February 4, 1868, fixing the
limit of greenback notes at 1856, 10000
This period lasted five years and the
volume of legal tender notes remained
stationary until September 1873. A
few remaining compound interest notes
were converted into three per cent Ger
tificates, which were also made available
as bank reserves, and to that extent re-
leased legal tender notes, so that they
could go into general circulation These
three per cent. certificates were taken
up in their turn by the authorization OF
$4,000, 900 additional bank note circula-
ton. There was during this period
from 1870, a gradual increase of circu-
latlng money up to 1873, when (on the
Both OF June, 1879 the volume reached
$75OOOO, 900, it having been only $720,-
OOO, 900 in 1868; so that practically there
was but little change in the volume of
money duriug these five years. And
the only agitation upon that subject
during this period was an agitation with
reference to the payment of the five
twenty bonds.
1t was insisted by Mr. Pendleton, and
his followers, that the five twenty bonds
by their terms, were payable in lawful
money, and that they should be so paid
and the Democratic National Conven-
tion in 1868 so far followed the theories
of Mr.. Pendleton as to demand that
there should be one currency for the
bondholders and the people. But they
added in their platform that this cur
rency should be made good. On this
bond issue the Presidential battle OF
1868 was fought; and following the cleo
ton of 1868, an explanatory act was
passed, Tin March, 1862 declaring the
true intent and meaning Of the original
loan acts upon this question This ex-
planatory act provided and declared
that the faith of the United States is
solemnly pledged to the payment, in
coin or its equivalent, Of all the obliga-
tions of the United States not bearing
interest, known as United States notes
and OF all the interest bearing obliga-
tions, except in cases where the law au-
thorizing the issuing of such obligations
has expressly provided that the same
may be paid in lawful money, or any
other currency than gold and silver
At the end Of this act was further
provision that " the United States also
solemnly pledges it's faith to make pro-
vision at the earliest practical period
for the redemption of United States
notes IN coin" The object of this legis-
lation, it will be seen, was twofold first
to settle any doubt as to the construc
/ ton OF the original loan laws; and sec
ond, to pledge the faith of the nation in
favor of the convertibility of United
States notes at the earliest moment in
to coin. This measure was resisted
by the Democratic party, although ii
received large support in both Houses
from members of that party. [ will not
discuss now the wisdom of that act
only quote it to show that it was tho
purpose Of the people of the UniteC
States to reach specie payments at the
earliest practical period, in accordance
with the pledge made in 1868, but that
IN the discussion upon this Legislation
no proposition was interposed to retro
permanently the greenbacks. There
was no other legislation during this per
iod affecting the volume of currency
and | need not add here what is known
to all, that this period, from 1868 tc
1873, was regarded as a period OF gen
eral prosperity. Yet in September, 1873
the country experienced financial re
vulsion, from which it has not yet final
| ly recovered.
THE FOURTH PERIOD.
1t was claimed then by many that i
there could be an increase of circula
tion the crisis would be checked anc
prosperous times restored-which wa!
responded to by the Secretary of thu
Treasury by the issuing, in the latte
part of 1873 and the early part of 1874
of $26,0OO,000 additional legal tende
notes. But this issue had no effect up
on the country-did not revive business
but on the contrary the year 1874
which have rightly characterized as {
period of expansion of the currency
was year of universal financial dis
tress and stagnation of business; anc
during this time, money largely accum
ulated at the many centers OF the coun
try. Now will any one claim that tht
contraction of the currency which Is
conceded to have taken place prior tc
1868, but which ceased at that date
can have had any influence in bringins
about the crisis which occurred in lS7;
five years afterwards?
THE FIFTH PERIOD.
No other legislation on the currenc.
question took place till the meeting o
Congress in December of 1S74-afte
the election of that year-when tina
body addressed itself to the question o
the feasibility of fixing time tor ant
mode of returning to specie payment
without interfering with the volume o
paper money in existence. Thereupol
what is now known as the Resumption
Act was matured, passed both Houses
and received the signature OF the Presl
dent on the IA day of January, 1873
The provisions of the Resumption Ac
are familiar to you all They authoriz
free banking, and the withdrawal Of So
of greenbacks for every 800 of ad
ditional bank circulation issued; and al
so that greenbacks should not be retire
below $500, 100000; so that, under tha
law, it was possible to retire $S2 1000
0O0-including the S26,000,0OO that ha
been recently issued by Secretary Rich
ardson, after the panic OF 1873. Thl
act was compromise OF contlictln
views. Many Democrats and Republi
cans in the eastern states again raise
the question of retiring all the greer
back circulation This the western Re
publicans and Democrats resisted. Tn
der the operation of this law, $34 900
600 Of greenbacks have been retired an
cancelled, in three and half years-o
at the rate Of not quite $l0,0O0,O00 pc
annum, and less than million mont
additional bank note circulation, c
course, being issued to take their plac,
But, owing to the fact that many n;
tional banks have voluntarily retire
their circulation, this reduction in tn
xo1umo of tho rroanha cEc docs not fIl III