Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-02-01
IDLE MONEY PILED Up.
Matthew Marshall Points Out the
Harm That's Bound to Result
A GREATER STOCK OF CURRENCY
Than the Country Has Had Accumulated
for Very Long Time
CONDITIONS THAT HAVE CAUSED 1T
SPECIAL TELEGRAM TO THE DISPATCH,


Matthew Marshall writes, as follows, for to-
morrow's Sun:
The return flow of currency from the
country following the autumn movement OF
the crops always results at this season IN
large accumulation of lawful money in our
New York banks, but this year the accumu-
lation has been extraordinary. The banks
reported last Saturday averages of Sis. ls2,-
6O0 in specie and s5O2,O ,O6s in legal tenders,
making total of sl6S, ,S99 400, against SINH
lar total of sl26 7O4, 500 year ago and OF Sl2l,-
565 SOD the first Saturday of February, lS99
This amount largely exceeds that of any re-
serve heretofore held by the banks OF the
city during the whole course of their his
tory, and it is to me a most striking and in
teuesting fact
of course it must be taken into considera-
tion that the general stock of currency in
the country is greater than it ever has been
at anv previous period. Since ISIS we have
coined and practically put into circulation
about S4O0,O00,OOO in standard silver, and
under the act of Jnly IA. 1890 we have issued
since that date $50 000.OOO in silver bullion
notes. Against this increase, it is true,
must be Offset a diIninution of Sl7O 600 OOO in
the national bank circulation, but this still
leaves a net currency gain OF $50 600 900,
without counting our regular annual gold
coiuaga
ThEWeather a Considerable Factor.
AsF Secretary of the Treasury showed
inE st report so far from there being
ar duction in volume and consequent
q iative scarcity of our circulating me-
as the stringency of last autumn
to indicate, the amount of it on
l, 1891, was sl.497.440 707, or s23 Al per
of population, and at the date of the
IT. December l. it had increased to
1852 O70, or to S24 80 per capita.
-sa,.41 -.NFf arx-fra aAa,. ia
ii and South has probably something to
with lessening the demand for currency
those sections, and thus allowing more of
to come TO us. Snowstorms, blizzards
ID continued frosts have stopped great
cal of outdoor work which could have been
arI,ied on in milder weather, and to that
extent have made currency super1uous.
Then again, the preponderating disposi-
tion of the farmers and planters to use the
proceeds of the crops in paying off their
debts instead of spending it in purchases of
goods or farm implements, which; our mer-
chants complain, makes trade dull, releases
a good deal of money which would other
wise be kept in circulation. A similar cause
is, to a certain extent also in operation here
at the East. l think can see around me
general prevalence of cautious co nserva-
tism on the part of moneyed men which in
disposes them from embarking in new en-
terprises, thus giving circulation TO the
money now plling up in the banks.
Confidence supplanted by Timidity.
Inree years ullueE pressure O1 bHc
enormous Government bond redemptions,
prices of good securities went up so that the
rate of interest on permanent investments
went down below per cent This made
capitalists willing to take large risks in
order TO secure larger income, ana re-
suited in an era OF speculation which came
to gnd only with the Barring collapse OF No
vember. 1890. That catastrophe produced
revulsion OF feeling, and since its occurrence
tImidity has supplemented confidence in the
i n,.,s- s1o4 4l,sa,,,
over-careful as they previously were over
bold.
stiIl, the factfs undeniable that the natural
supply of currency is greater than it has
been, and the prospect for the future is
vastly I'm favor of its further increase. The
act of July. 1890 alone is adding 81 500 900 to
ii every month; the new coinage OF gold
amounts to not less than $50 0000,0 600 year:
and il The threatened disbursement of the
500 800 600 so-caIled legal tender reserve gold
iunu in the Treasury for the current expen-
Iditnres of the Government should take
PLACE, that also would go to swell the mass.
BY the wav, l observe that the
old and often exposed section of
an act Of Congress creating this
lawful TO impair it, has recently been re-
vived by writers who have not taken the
pains to inform themselves of the truth and
who have accepted secretary Mannlng's
arbitrary dictum on the point as law. /
think il would be bad policy for the Govern
ment to use the fund in the manner sug-
gested, but that iu has the legal right to do
it is beyond question.
Only to BE Redeemed in Coin.
Nobody, to be sure, is likely to present the
legal tenders for redemption, and if he
should he would not be entitled to demand
gold for them. They are in express terms
payable 'ih coin," as anyone may see if he
would read what is printed on their face,
and this gives the Treasury the right to pay
them in silver if its gold should be ex-
hausted. But a run on the Treasury is pos
sble, and if one should be precipitated by
the disappearance OF the existing SlOO, 600 600
gold fund, a stoppage of it by paying out sill
yer would be almost as bad as a suspension
OF specie payment altogether 1t would at
once make the bullion value of the silver
dollar the unit Of our system and
which we are slowly drifting. l should hate
to see the process accelerated by official ac
tion.
At the same time L repeat what 1 have
before asserted, that the mere adoption
a silver standard would not create a strin-
gency and a panic Gold would indeed
cease to circulate from hand to hand, but
that is of no importance. The bulk of it
would be retained by the banks who hap
pened to hold it, and would be counted as
part of their reserve, just as it was during
the war. The prices of commodities, on the
other hand, would rise to meet the diminu-
tion of the value of the dollar, and thus an
opportunity would be afforded TOR specula-
uOn Sucn as resulted from the Qepreclatlon
OF the legal tenders soon after their first
issue, and like temporary era of seeming
prosperity would follow.
Legal Tenders Must BE Kept at Par.
But this is depression. L don't believe
the Government will risk the consequences
of disbursing the SlOO, 600, 900 fund it has so
long held in gold, even though it has held it
for purpose not required by law. Public
sentiment and public opinion are quite as
much feared by politicians and respected by
statesmen as legislative acts are, and at
present they both demand that the legal
tenders shall be kept at par with gold as
yer bullion notes under the act of July. 1899,
vet become sufficient to threaten a speedy
swamping of gold by silver
The immediate danger from a piling up of
unused currency, such as we are now wit
Messing, lies in another direction. 1t con-
sists in the facility it offers for a renewal of
the era Of speculation which preceded 1890
with the result OF a collapse not merely like
that OF 1880, but also aggravated by a sudden
depletion of the swollen volume of currency
-hich caused the imitation.
Abundant currency leads to high prices,
I'd high prices attract sellers, If we keep
! in the way we are going this country will
soon be, If II is not so already, the best mar
ket in the world to sell goods in in spite of
the Mckinley tariff act. Already the friends
OF that measure are exulting over the fact
mat since it went into operation our i'm
ports have increased, not perceiving that the
Increase tells neither for nor against the
tariff, but indicates only our ability to buy.
The Prospects for Another Year
At present we are paying for our imports
by exports of breadstuffs and provisions,
but the stoppsge of gold imports shows that
we do nothing more. What will happen an
other year unless this years extraordinary
of good harvests here and bad