Green-Mountain freeman. [volume] (Montpelier, Vt.) 1844-1884, 1878-10-23
Contraction and Imitation In Relation to
Hard Times. 49,


not result in initiation, and would not al
least in that way. prove any injury to any
body. But as he regards contraction ny
as worthy of condemnation
equally with initiation. and as being the
cause of depression in business, panlcs
and failures, it is worth while to see Just
what imitation and contraction there have
been, and their probable relation TO good
times and hard times.
At the time of the creation of the ma
tional banking system. in 1873, there were
less than two hundred and fifty millions oil
paper money. issued by banks. in clrcula-
ton, and before the war their circulation
had not been greater than that. The law
creating the national banking system au-
thorized the issue of three hundred mill
ions of bank notes, and they were all Is
sued in the next four or five years. That,
of itself. made more paper money than
had been issued by state banks. In addl-
ton the government issued four hundred
millions of greenbacks, and fifty millions
of fractional currency, The paper money
of the country had thus been more than
doubled in volume. 1t is not surprising
that prices advanced. and the widest spec
ulation prevailed everywhere. Contrac.
ton began in 1866 and stopped in 1868.
Ii only reached the sum of about fifty
millions of dollars in legal tender, little
more than one-tenth of the greenbacks,
and about one sixteenth of the whole vol
ume of paper money. The crash in bust
ness did not come until 1873. For years
, previously there had been, and since then
there has been very little contraction o
the currency. In 1865 the whole volume
of currency, including bank notes ant
fractional currency. was less than six hun
dred and thr,y-six millions of dollars, II
1866 it was seven hundred and fifty mill
ions, the increase being in national bah'
i notes, in 1873 it was seven hundred ant
forty light millions. in 1874 seven hundre
and seventy-seven millions, in 1875 sevc
hundred and eighty-two millions, and /
~ December, 1877, six hundred and nnet
Is millions. OF this last decrease of ninety
two millions, twenty eight millions wer
lie in fractional currency. replaced, OF cours
al by coin, thirty four millions in ban
M notes, either surrendered by banks, or II
deemed by banks going into liquidation
,. and thirty millions in legal tender
J., These legal tenders were, however, retire
- under the act removing the restrictions {
" national bank circulation, and were on
eighty per cent of the circulation issued
d. new banks, so that, in fact, whatever co
le- traction there was was due to the sure
mt der of circulation by banks, and tie
zee demption of bank notes in liquidation; al
ed it is plain if, during this period, there h
lat been any business demand foHmore cure
CIV more banks would have been establish
Ter to furnish it. At any rate, the governme
H. has issued one hundred dollars of ne
is bank circulation for every eighty doll'
sllu OF EEebDDtChS WllHtlldNt emu ouNh "
ng traction as has taken place has been II br
ion ness affair and not fault of the Cover
he ment, and is the result, instead of bel
the cause, of the depression in busne
With these facts stated can there be ne
ess of any argument TO show that busin
in depression was not caused by contract
ing or that the fall in prices is not at all owl
ian to any dminution in the volume of
urrency? 1t would hardly be reasona
to charge the low price of apples this
ress to scarcity Of money, yet it would
the scarcely more unreasonable than to cha
lee hard times TO the same cause ii coh'l
re- ton SO sudden and SO great as to ca
such calamites as IT. II. H." descril
would deserve his condemnation, but
oroa such contraction has happened. But
Tho congress in fit of financial madness
=, introduced imitation and an era of '
,,o.. speculation, shall no subsequent cong
49,, be allowed to get rid of poor money, eli
by Withdrawing it or making it gooC
gold doing as little injury as possible
the processP
sress But there is another aspect to this
Inc iect 1t seems to be assumed that the
> If times are only felt by the laboring {
we're and poor debtors. How does 1t hal
in that they sutferP Is it not mainly
act wholly because capitalists and emplo
n to have first suffered? A corporation run
sum factory fails and hundred mer
Inc thrown out of employment. The col
alton may have suffered by defau
treasurer; it may have sold its good
'ARIs credit and not got It's pay; bank W
were it kept its deposits may have failed
the aborer had before shared in the prosp
" I. of his employer; he now suffers by
Scale employer misfortune. This is one
evens Take another. A person has an incol
Com twenty thousand dollars year,
Sons spends it all, and somebody, pro
lpany many laborers somewhere, are ben,
by it, A bank like that OF the CT
Uledkbt anu tllC oNOIh llOul
New that income is derived is swept aw
out a day, and thereafter those who I'M
leans ually were benefited by the libera
ion of pendture of the twenty thousand
House, are so benefited no longer. As was sal
pow former article, the hard times in this
try are the result of a similar cause
laborer and the debtor are injured,
Soo'- directly rather than directly.
lorlda' prosperity brought liberal expenditu
lehtlal what was called good times; sudd
~ N''' versity has brought restricted expen
and dull times. If the people strike
at the creditor class, they strike b
+| ~ the very foundations of the temple O
n ., perity. If they strike the capitals
'rhnrs strike themselves. Capital may be
elected it may be exacting; it may be oppr'
Barlow, and when it is so. in that respect
jheney, serves all the condemnation that a
'"''"' can express; but it is the foundation
-. - al. = L,,sI