Evening star. [volume] (Washington, D.C.) 1854-1972, 1890-12-02

ment from the treasury was made for like
! amount of bonds, with premium at an average
} rate Of 1861 for ~ per cent and 127 for per
cent bonds thus returning 70 the channels OF
trade the amount Of the deposit, and from
5000 to $4,000 additional on each 800. OOO
The increase of circulation by these operations
was about %. 00O. 900.
The amount now held by the national bank
} depositaries is still in excess Of the require
ments Of the public service. and further with
drawals will be made whenever il can be done
without detriment to business interests.
FORMER OBJECTIONS HOLD GOOD.
Some Of the objections, believed to be con-
elusive, against this method of restoring the
surplus to circulation, were stated specifically
in the Secretarys last annual report Snbse-
quent experience has confirmed the convictions
then expressed, that this policy is unwise and
inexpedient, and should never be employed ex-
cept as a last resort.
During the recent financial stringency the
Secretary was frequently urged to adopt this
method of reducing the surplus but he de-
clined to do for the reasons stated in said re-
port and also for the further reason that such
relief was wholly impracticable to meet sud-
den emergency. The law does not permit the
| transfer of money, once covered into the treas
ury, to banks for commercial purposes, and it
specifically forbids such transfer Of money re-
ceived from customs duties. The only author
lzed method OF making such deposits il to
designate certain banks AS depositaries of pub
|
States bonds to the amount designated, and
then be authorized to receive such funds rs
may be thereafter collected under the internal
revenue laws. This is necessarily a very slow
process, which would require several weeks, if
| not months to produce any substantial effect
upon the circulation. Such policy would GER
talnly prove n most unsatisfactory way Of
affording relief to the business interests of the
country In an impending commercial crisis
| There are doubtless some defects in the indie
pendent hints of
forty-four years has. in my Judgment. fully
demonstrated its superiority to the bank-de-
post policy. which it superseded. 1t is worthy
OF observation that the policy of affording ire
lief to the money market. now so much criti-
cized in certain quarters. il by no means new
| thing. 1t has been the uniform policy of the
government. when possible. in all commercial
crises from 1916 to the present time. The diff
Guilty which the department has encountered
during the last year In Withdrawing a part of
our present bank deposits. even by the careful
| and conservative methods adopted. and at times
! when there was no financial pressure, gives
some conception OF what those difficulties
| would be in making such Withdrawals in times
| OF stringency and commercial distress. The
experiences OF 1857 would be repeated. more or
| less, III every commercial crisis.
TABLES AS TO CIRCULATION.
The Secretary presents certain tables with
his remarks on the subject of circulation"
giving some valuable facts.
Table No. shows that during the last twenty
years the net aggregate increase of money in
actual circulation among the people was S727.-
7G0.709. Average monthly increase during that
reriod. 1909, 1886. Per capita increase,
S4.991.
Table No. 2shows that for the last ten years
| the aggregate increase has been SAG. 039. 0H.
| Average monthly increase for same period,
1886, 1872. Per capita increase, $500
| Table No. 3 shows that for the period of nine
teen months from March /. 1889, to October /,
1890, the aggregate increase has been $685.
S66.sl3. Average monthly increase on same
period. "a 9O,3 1853 Per capita increase. Il so.
Table No. 4 shows that for the corresponding
period of nineteen months from March /, 1885,
| to October l, 1886, the aggregate decrease in
circulation among the people was 81 .S59. 493
Average monthly decrease for same period
| 5l,15O.50O. Per capita decrease about 40 cents
Table No. shows that for the period of
three months from July to October ]. $780,
| the aggregate increase of circulation in actual
use among the people was s6s. 354 339 Average
monthly increase for same period of three
months. S22 7s477S.
| These various changes in the amounts. in
actual circulation among the people, were
| caused partly by the additions of new kinds Of
money. partly by the retirement of certain
/ other kinds, and sometimes very largely by the
| policies pursued by the Treasury Department
The policy of boarding i'll order to show very
| large surplus accounts mainly for the heavy
/ decrease of circulation shown from March,
! 1885. to October, 1856 The opposite policy of
keeping the surplus rs low us practicable by
, the purchase of United States bonds and
| thereby saving interest and at the same time
| returning the money to the channels of trade
largely accounts for the remarkable increase in
circulation during the last nineteen months. as
| shown in tables Nos. 3 and 81
| SILVER OPERATIONS.
| The recent silver operations of the depart
ment are detailed and the results summed up
AS follows
Under the operations Of this law the amount
Of silver purchased from August Is. 1850. to
| December l. 1890. aggregated Is. 77S, 1S5 fine
ounces, costing slS.671,O75, an average of
| SLIPS per fine ounce.
| The price of silver advanced raddly after
| the passage OF the new law. indeed. the imme-
! diate effect of the law had been largely antci-
pated in the advance in price prior to its pas
sage.
On The LIST of July. 1890, the price Of silver
was -l.O46. 10 July IA the price had advanced
to SIS. to August Is. S1.13. and to September
3, sl.2l, the highest point reached.
| Since that date there has been decline
with some fluctuations, to the present time,
the price falling Us low AS sO97.
| Notwithstanding the fact that the advance in
the price of silver following the passage of the
law has not been maintained The Secretary
ventures to express the belief that the new sill
| yer act Is a great Improvement Owe: the law
repealed and that its beneficial results will
|
As yet the period of time has been too brief to
really test the merits oil the law and the per-
manent effec: which it will have on the price
| of silver.
| One thing is certain. that it has been the
means of providing healthy and mucll-neeted
addition to the circulating medium of the
| United States.
| The amount of treasury notes issued on pur-
chases Of silver bullion from August l3 to
November 23, 1880. has been slS.S07,OOO.
| FLUCTUATIONS OF SILVER.
1t must be apparent to any careful observer
Of the movement Of silver that the recent
violent fluctuations in price are mainly due to
speculative operations in the large surplus of
| from eight to ten million ounces, which has
not been absorbed by treasury purchases. This
downward tendency has been materially as
| sisted by a severe and almost constant strin-
gency of the money market. This surplus was
accumulated. i'll the first instance. by the with
holding from the market. by producers and
| SPECTATORS for some months prior to the
passage Of the new silver act, Of the current
product Of American silver, in the hope of
securing II better price. 1t has been maintained
and augmented both by importations of foreign
| silver and by falling of in the export of
domestic silver, the latter accustomed doubtless
u by the fact that in the purchases of silver
| under the silver law, the Treasury Department
has paid as u rule, price considerably in
excess of the price OF silver in London. The
imports into the United States Of foreign
silver from May t. November Of the present
year have exceeded the exports Of domestic
silver by some 81 75OO 900 ..while for thcs:corrt-
l..t