The Greenville times., 1891-06-20
THE CALCULATING HTMBUeaERK.
uInereass hs Circulation oflhe Medium
-InsIeaa oT Ihe Hedlum of
Circulation"


tary lore, bat that the current discus
sion upon the essential need Of increase /
ofIssue, the influence Of its acontraction /
or expansion upon the prosperity Of
the country has embraced q great deal
Of patent fallacy we are certain. The
following extract Of an address before
the Bankers convention at s.. Paul is
calculated to greatly strengthen this
conviction
When credit is good, when promises
are for a long time met, these
holders Of value seek investment and
money appears plentiful, but. however
easy money is, the volume is no greater.
There was just as much money in
this country on September ed Of last
year, when 1t loaned in New York at
~ per cent per annum, as there was
two months before when il loaned at
per cent. Indeed, more by $9,00o,-
0O0 The volume of money Is incrcas-
ing in proportion faster than the pop
ulation. | have made no aliowsr
for exports, for they are VIZ laiY
nothing compared with the volume of
money In the country. Tlg s-taal
evil, as stated, is caused BY over spee
uIation, l. G., by multnuaes making
promises to dcl'ycr ia return Tor re
ceiptl Of ceriau sm0uhI ol value At
one limeh 6 clltaL 7Gogal Qf other
values al some hlurl dune sd their
faii'ire in the Interval 20 produce OF
ae ,uire sufficient value to meet their
! promises Jn the faith of which the
cr4if rs have themselves contracted
Obligations. Hard times or the so
/ caea ssriagency Is the result necessa-
irav. rs true cause is thus evidently
ogs speculation which falls under two
asses FIRST price far above the
Intrinsic value received, has been
given, !. e., promise to give at q
future date a larger value than
the intrinsic value received, has
been made in the expectation
of a rapid enhancement in value
of what has been received. This ex
pectation proves unfounded. The con
sequence is one has obligated him
self to deliver larger value than the
thing received has, at the day wher
that obligation natures.
Hence. if he Is able to meet il, capi
tai must be withdrawn from othel
sources at his command or II he hal
lnane or insufficient ones, the obiga
, ton cannot be met; the stringency Il
, inevitable, no matter how large thu
, volume of the medium. For examples
, of this cause the buying ofanything a
of land, grain, cotton, etc, In expecta
tion of rise in value which on ac
, count of the non-production of thu
, one or the over-production Of th'
, other, does not take place.
! The second kind of over spccula
. ton is this: One receives givel
value and promises TO return il at |
. future time, not in expection of ris'
! in value of the thing received, but II
expectation OF putting them to NOR
productive employment from which
larger value will be produced in th'
interval If this expectation fails
. precisely the same consequences vii
|, follow. Examples Of this sort are ex
tending business whether agricultural
commercial or manufacturing on Dor
rowed capital, when the extension
proves Improbable !. e., creates les
amount of new business or capital thai
, was used up to create 1t. The tru
, Transaction is obscured in the popula
mind by our expressing the value Dor
rowed In dollars and cents. The actu
al thing borrowed is of course th
material, etc, used In the extension ant
that which the labor buys with tn
wages received.
| hope | have made II clear that il
either case of this over or unwis
speculation, no volume of none
; could obviato or ease the stringencl
for the worst aud most disastrou
/ panics have Immediately followed tn
, most inflated money markets. | al
convinced that oil our panics are du
to the concurrent operation of thos
two causes, and have not been induce
for want of more money, but fc
want of credit. Ii this be not tru
: why Is il that when money Is appa
!, emily scarce Government bonds rise
y pricel Why is it that in Septembt
. last, when money was so scarce, 4 pC
!, cents went to 1873, and, when cred
q was restored, dropped TO 1902 1t
y = because holders of this capital bougl
u them, knowing them to be safe il
T vestment, and as confidence was r
y stored, these holders, wanting larg'
$ returns, sought better paying inyes
ments.
u The only increase to the circulate
~ | would make, would be about S2(
~ 100000 of bank notes to bring the ci
=, culation to the par of the bonds 1t
- y, issued ON, and this | would do
~ much in justice to National banks
y, to increase the currency Of the counir
- which according to the New Yo
70 "World," is "$2, ,1c3, ,975,501. OF th
NJ more than one-third, or $737, ,364,6
u is stored in the vaults of the Unit
~ States Treasury. In the State
u Texas, have estimated that there q
= in the hands OF banks and in genel
y circulation $6,939,000 of money.
''o this total, there is stored in the Sts
~ ~ Treasury S2,700,000 of which 81, 20
~ ~ 900 is currency, 100000 is gold a
Nv 100000 silver dollars. Here we ha
iis ~ really one-third of the actual and to
~ ~ money In the State locked up in
.o ~ treasury vaults. We see here agi
~ the indisposition to use silver.
may state ii as fact that | hs
Y. known at one time In this city SIC
600 of treasury warrants carried
eu cash items for days in preference
.nt carting silver from the treasury to
me bank vaults. To INCREASE TIE c
ev- cULATIoN OF THE MEDIUM, THEN
'ht THE QUESTION RATHER THAN THE
Of CREASE or THE CIRCULATING MEDTI
ler III OCCURS TO ME THAT A TAR1FF L.
We WHICH WOULD PUN LESS MONEY