New-York tribune., 1890-06-04
CTRRENCY AND POPUL4TION.

CURRENCY And POPULATTON
Nothing is gained for any good cause by
DENYING that more currency is needed from
time to time to supply an increasing popula-
ton and business. Only slight and doubtful
evidence. if any. can be obtained regarding
the amount of currency needed in any country.
If there were conclusive evidence that in some
other countries certain supply had been found
too small or too large. that would be made
Quate to prove that in this country. with differ
ent circumstances and habits, the same amount
would not be exactly right. Because nobody
knows or in the nature of things can know,
Just what amount is required, it is generally
mere unsupported dogmatism to assert that
this country needs or does not need partic
ular amount per capita.
But there is some reasonable foundation for
the claim that an increase proportioned to pop
ulation cannot be expected TO do harm More
buyers naturally want more tools to buy with.
More wage-earners, having to receive and cx-
pend wages each week and month, naturally
require more money. There is scarcely any
logical ground for saying that the increase in
currency ought always to he closely proper
toned to the increase i'll population. But in
default of any more accurate basis of reckon
ing. il is often assumed that a constant circula-
ton per inhahitant will be apt to avoid the
evils of undue contraction or expansion. In
ordinary reaSOninGs about the currency it may
be as safe TO follow this general guide aS 10
seek for any other or to 90 without any
One rule which used to be regarded by eco
nomic writers rs Of almost universal applica-
L.. Il Ill LII
reasoning minds by recent experience. II used
10 be said that one part Of the currency, name
ly, the gold coin, would move from country 10
country freely according 10 the demand in
each and therefore by IFS movement would
supply real want in one place, or relieve real
though perhaps unSuspected supcriiuity in an
other. The use of securities as a species of
international money, with which merchandise
balances are settled more readily and more
often than with gold, has taken much of the
life out Of this theory. II a country can for
a term Of years settle its balances BY exporting
securities. though il may in fact be running
into debt the movement of gold and the rcctiii-
cation of any excess or deficiency in currency
by that automatic movement in accord with
the relation of prices, are none the less ei-
that the debt must ultimately be paid. some
times il is repudated or scaled. sometimes il
proves so desirable an investment that capital
ISIS for many years continue 10 send more and
more of their savings in the same direction.
Since 1850 the circulation outside the Treas
ury has increased fully 40 per cent which is
little more than the increase in population.
ON the whole il has been the most prosperous
decade in the history of the country But
during the first half of the decade much the
larger part of the increase occurred, amount
ing TO - per cent. or . per cent yearly, and a
speculative fever and collapse gave some sup
port to the belief that over expansion had done
mischief. In the latter half of the decade the
increase has been much smaller only u per
| cent, or less than - per cent yearly, and
the prosperity has been broken by no serious
! disaster while industries have made great prog
rcsS, but there have been almost constantly
some signs of depression in trade. II is at
least conceivable than an increase little less
rapid than that of population has tended to
keep prices low and trade close and but mod
cratcly profitable IT is therefore with some
appearance of reason that an increase not far
from per cent yearly is by many advocated a.
on the whole more likely to be safe and benc-
fetal than greater expansion or relative
contraction.
In the light Of these impressions an add-
ton of ffty-four millions of silver notes year
~, in part to replace thirty millions of bank
notes which will probably be retired hardly
appears dangerous expansion. For at 3 per
cent yearly the addition to the circulation out
side the Treasury would be about forty three
millions, and to supply that increase, if the
bank notes are to be retired at the rate above
named the new currency required would be
seventy three millions yearly. But should the
Silver bill furnish less than enough additional
money, there would remain the power to draw
gold from abroad or from the mines retaining
it at home. The dependence of the country
upon gold for its monetary basis would how
ever, be much less, if measure like the House
Silver bill should be passed.