Staunton spectator. [volume] (Staunton, Va.) 1849-1896, 1878-06-18

4
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/ for ONCE. and all communications Of persona
l or private character, will be charged for as ad
| vertisements,
Address-"staunton Spectator" stauntm, VI.
only recognized measures or standards
of value among all the nations of tht
earth. Fer us to attempt to ignore this
| fact and to carry on business with q diff
/ ferent standard, would be to isolate our,
selves from commerce with foreign
countries.
| THE CONTRACTION ENDED.
In your letter to me, you substantially
enquire when is this system of cOntrac'
cion to cease? and what is the prospect
of an improved condition of our finan-
cial affairs?
I am happy to respond that it has
ceased. To use homely, but express
sive, phrase. I'VE have touched bottom u
We have seen the worst, and I conf
IDENTIFY predict that at an early day we
shall witness q marked revival of busi-
ness and gradual but sure return of
prosperity.
These are not idle words. prompted
| by an over sanguine temperament
They are the results of careful consid-
Grafton of unquestionable facts, which I
| will now place before you, that you may
judge how far they may justify the con-
clusions which have drawn from them.
think we may safely assume, that If
steady contraction of the currency, q
relentless turning of the screw in the
line of pressure, has led to great hnan-
cial distress, a gradual expansion of the
currency, reverse movement of the
screw will produce an opposite effect
This Is Just what we are now about to
experience. r
That the process of contraction has
gone on as it ought to go, is demonstrated
by the fact that United States treasury
notes are now almost, and, in few
months, will be altogether equal to gold.
The object of the curtailment was to eff
feet this result, and, it having been at.
tanned, there can be no rational motive
for continuing it further. But, if any
were disposed to apprehend further dam
gers in this direction I need only say,
that within the last ten days Congress
has by law forbidden any further con-
traction.
We have then the present amount of
treasury notes and fractional currency,
estimated at three hundred and fifty
millions, as fixed fact" in our future
calculations.
We may also safely assume that the
National banks will not make any ma
terial reduction of the amount of their
notes, estimated at three hundred and
twenty millions, now in circulation, be-
cause their interests forbid any such re-
duction. We may then rest satisfied
that the present volume of paper cur
rency, amounting (including fractional
currency in round number, to six hun
dred and ninety millions, cannot be re-
dueed.
And here let me remark that every
dollar of this currency is equivalent to
gold, and after the 1st day of January
next will be exchangeable for gold.
PROSPECTIVE INCREASE OF THE voL-
UME OF CURRENCY.
Now, let US inquire whether there is a
prospect of an increase of the volume of
currency, which will minister to the
wants of the people.
You will observe that in all my pre-
vious calculations I have had no refer
ence to gold and silver as portions of
the currency. / excluded them pur-
posely, because since 1861 they have in
fact constituted no part of the currency.
Gold was a commodity of more value
than paper, and was therefore boarded
as special treasure. Since 1878 silver,
except for very small amounts, was
demonetized by law. 1t, therefore, did
not enter into circulation as money.
But it must be plain that as soon as
the greenbacks become as valuable as
gold, the motive to hoard is taken away,
and it must enter into circulation as it
did formerly, in specie paying days,
side by side with notes.
so silver, which has heretofore been
merely an article of merchandise, hav-
ing been at the present session of Con-
gress remonetized, must again flow into
the channels of circulation. Indeed,
Congress has ordered forty-eight mil
lions to be coined on behalf of the gov
eminent every year, and thrown into
circulation. Before the passage of the
law remonetizing silver, an ounce of sill
yer, in bars, was worth 92 cents under
the reconciliation law, an ounce of sill
yer, coined into the form of a dollar, is
worth 100 cents. Now it will readily
be perceived that, as the cost of coming
is but II per cent, it is to the interest
of all holders of silver to have it coined
into dollars instead of exporting and
selling it in bars, as they will thereby
save 81 per cent.
To estimate with accuracy the effect
of the resumption of specie payments
and the reconciliation of silver, in
augmenting the volume of money in
circulation, it will be necessary to ascer-
tain-1st, the amount of gold and silver,
coin and bullion in the country, and I'd,
the annual product of our mines.
On page 164 of his report, the Comp
troller of currency, gives us full infor.
nation on both points.
He says that the quantity of gold and
silver, coin and bullion, in our country
is $242, $50, 1858, of which 1892, 72O, ,230 is
in gold coin and bullion, and $50, ,13O, ,69S
in silver coin and bullion.
On the same page he states the annual
product of our mines to be $4,000, 600,
but more recent information induces me
to believe that this estimate is too low.
Reports of late date show that the gold
mines yield annually about seventy mill
lions, and there can be but little ques-
ton that the yield of the silver mines is
in excess of twelve millions of dollars.
With these facts before us it must be
obvious that within twelve months the
volume of currency must be largely in
creased. The increase will be effected
as follOws:-
Present amount of currency in cir Id.
a. - SoSV,CVuV
coin and bullion. ..:.......:.... 242.oooOoo
Add amount of silver ordered to be
coined by U. 100000
Add one years product of gold
mines.... 10000 900
sl,05O,O0O,OOO
which is an increase of over three hun
dred and sixty millions, or over nifty
per cent. of the present volume of cir
culation.
1t must be remembered, too, that this
is not an "inflation,n ~ caused by the is
sue of promises to pay" as was the
case in 1917 and 1886, but an addition of
solid metallic money, which has intrin-
sic value and needs no redemption.
ANOTHER SOURCE OF INCREASE.
But this is not the only source from
which an expansion of the volume of
money may be expected. The banks
are now required by law to keep in their