Belmont chronicle. [volume] (St. Clairsville, Ohio) 1855-1973, 1879-12-04
The Currency.


know enough to hire hall and instruct
their fellow-citizens, often display an
amazing amount of ignorance. If, in
stead of taking facts by hearsay and in
ference and making opinions hap-hazard,
people would 60 to original sources OF
information and get correct ideas of
things talked about, there would be less
of popular delusion and waywardness.
There are no better sources of informa-
ton on all subjects relating to the banks
and currency in this country than the
reports of John Jay Knox. They are au-
thorities on these subjects, and, taken
together, they include in their contents
a complete history of the various ennis
sions of paper money in this country
and the various banking systems, as well
as a complete elucidation of the merits
and disadvantages respectively of the
national bank notes and the legal ten
ders. We publish to-day some extracts
from Comptroller Knox's forthcoming
report for the year, and it will pay every
man to give them careful reading.
We do not suppose any scheme of
public finances was ever so completely
successful in accomplishing all the OBJ
jects for which it was devised as our ma
tional banking system. Secretary Chase,
in his report for 1862 recommending its
establishment, enumerated among it ad-
vantages that the fact that the bonds of
the government would be required for
banking purposes would establish a
steady market for the bonds, greatly ia
cilitate their negotiation and maintain
credit at rate above that OF funds of
equal credit, but not available as secu-
rity for circulation. Comptroller Knox
now points out that the success of the
lrefunding operations was due to the ex-
istence of the national banking system,
which holds one-fifth of the interest
bearing debt of the United States. The
demand for the bonds as a pledge for
circulation creates a market which the
government can constantly avail itself
of, and which enabled it to float the
funding loans. Since the refunding
operations began in May 1, 1871, the
public debt has been decreased $105, 160,-
900, and the reduction of the annual in
terest change effected amounts to $l9,.
9O7, ,6O7 per annum. The total reduction
of the annual interest on the debt, &C
complished by reduction of the princi
pal of the debt and by the refundine
Operations, amounts to the enormou:
total of So, ,203, ,919 per annum. These
transactions, which illumine the RECORD
of the Republican party, are without s
parallel in the history of the world.
Another of Secretary Chase's ideas il
founding the national banking system
was that it was his '.firm belief that b,
no other path can the resumption O
specie payments be so surely reached
and so certainly maintained" The re
suit has justified Secretary Chase's con
. fidence, for, as Comptroller Knox point
out, the banks afforded invaluable as
sistance. They held more than one-thir'
of the outstanding Treasury notes, ant
they not only refrained from presenting
these for redemption, but they ais
agreed to receive such notes in paymen
= of the interest on the debt and of othe
coin obligations Of the government. Il
this way the resumption of specie pay
: ments was effected without the slightes
jar. In the maintenance Of specie pay
Lments the banks are destined to play
no less important part. The presen
monetary condition is not healthfu
!. The total currency of the country o.
November 1 was three hundred an
: eighty millions in excess of the highes
point reached during the suspension Q
specie payments. The entire legal-ter
!. der issue of over three hundred and fol
ty-six millions is required by law to b
: kept outstanding. The effect, in tim
will be to cause arrangement of price
and an unnatural stimulus to specul;
tion that may develop another pani
The influx of specie into Germany, oy
I" ing to the war damages levied Q
France advanced prices, encourage
rash speculation and produced disaste
: In England, after the resumption of sp
Gle payments on top of redundant p
per circulation, business boom W;
started which kept up for four yeaI
and then came crash. The point
danger in our financial system is tt
greenbacks, for that is fixed, unelast
currency, and to maintain it at par u
der all circumstances requires an il
mense hoard of coin to be kept in Il
treasury, the use of which is thus lost
the people. The redemption and retiI
ment of the greenbacks would relea
= the Treasury hoard of coin into t
channels of trade, and it would absolut
ly secure the permanenee of specie pa
ments. The national banking system
., free to all, and it would act as an aut
e. =: matte regulator of the volume of t
ao- currency, constantly adjusting it to b'
,s,, mess needs BALTIC. American.