The record-union., 1893-07-03
special 70 the REconp-UNIoN.

John 3. Henderson of Missouri, who has
devoted long and careful study to matters
Of finance has addressed to Secretary
Carlisle the following communication:
81 promised to give you in writing the
substance of my statements made to you
in conversation touching the monetary
condition of the country. 1 then ex-
pressed the belief that the present
stringency was produced, not by any lack
or insutficency of our currency, but by
loss of confidence produced among busi-
ness men because of the bad quality or
inferior character of a large part of that
currency. There is no error of more
common prevalence than that an abund-
ance of money issues naturally adds to
the commercial or business energy Of the
people. OF course, certain amount of
money tokens is absolutely essential
with which to effect smaller exchanges of
commodities. These money tokens don't
create exchanges, but exchanges create
necessity for the tokens.
Among people entirely civilized, over
ninety-fve per cent. of the exchanges
necessary in these operations are con-
summated through the medium of bank
these bank facilities become enlarged or
contracted as money tokens become
scarce or abundant. Hence there is less
danger in limiting the bulk of circulating
money than the people generally
imagine.
The bank check is better for another
reason. Having performed its office it
ceases to circulate. If the exigences of
business demand another check, it is
issued anew, and in like manner de-
stroyed when the object is accomplished.
We shall never have perfect currency
until every note used for circulation
shall be destroyed on its return to the
authority issuing it, and no new notes
issued except for value and only at the
call of business demands"
Commenting upon the amount of
money in circulation per capita among
tho people of the United States from 1873
to 1893, Henderson says: Neither indi-
vidual prosperity, nor commercial pros
perity, nor commercial activity is abso-
Iutely controlled by the amount of the
circulating medium"
Continuing, he states, Il think Pm
safe in asserting that from July ], 1879
to July l, 1888, we enjoyed very great
prosperity, individually and nationally.
There was no lack of money. 1t suf-
feed not only to fill the treasury, but
abundantly answered the demands of
commerce and the extraordinary busi-
ness activity was followed by very high
prices. The average per.capita circula-
tion during that period was so 81. From
I1tl, r., ho
great monetary stringency, we find the
average per capita of S23 %. 1t is there
fore apparent, in common parlance, that
times may be hard and money scarce
with the most abundant circulation per
capita. The circulation in Great Britain
is now SO 3l-SI4 10 gold, silver 81 63
and paper s. p per capita. The circula-
ton in Germany, ST. 56, and yet in these
countries with vast commerce and
manufactures. there is no dearth of
money and interest rules at scarcely
more than half the rates prevailing in this
country.
England adopted a single gold stand
ard in 1916, and has adhered to il over
since, and by SO doing has become the
money center of the world. The panic
of 1873 was without doubt the direct re-
suit of speculation and overtrading. in
duced by the greenback era. Between
1863 and 1873, both inclusive. the balance
of the foreign trade against US was
SI,0S6. $40, 5S7. This long and steady drain
age brought loss to large part of the
nations wealth, and with it the country's
entire stock of gold. Take the period of
unbridled State bank issues of paper
money between ISIS and 1897. and we
find similar result.
The commercial conditions now exist
ing are altogether different from the two
periods named. 1t seems to be demon
strable that so far as the financial propo-
sltion can be logically demonstrated. the
present situation is not the result of
speculation or overtrading, or bad busi-
ness methods, but largely, if not wholly,
produced by the silver legislation of Con-
gress. The increasing production of sill
yer, as compared with gold, induced Ger
many to follow England, and discard it
as twin standard OF value
The American Congress in 1873. act
mated no doubt by these views, adopted
without dissent single gold standard.
and two years after measures were in
augurated and passed for the resum ption
of specie payments, to become operative
January l, 1879. If these two measures
remained on the statute books inviolate
and unamended there is no economical
reason why the United States and her
people should not to-day enjoy the most
unbounded prosperity. We should have
had the best and most abundant cur
rency-a gold currency of universal
value and such volume as to force its cir
culation, as in England, France and Ger
many, into the hands of the people.
ITO be assured of this fact it is onlv
necessary to again examine the condition
of commerce for the past seven years.
Although the excess of our exports of
products in 1892 amounted to nearly
SIS, 600, 600, yet the most startling fact ap-
pears during that year. We exported
over S13,0O0,O00 of gold. and now with
the balance of trade naturally turned
against US the country is being drained OF
the remaining gold with alarming rapid
ity.
1T only remains now to briefly state
the character of the silver Acts OF 1873
and 1890, and furnish you reasons for be-
lieving that the overthrow of public con-
idence and the present depression in