The St. Johns herald., 1893-06-08
The Contraction of Credit.

the country and that thing is the contraction of credit. It is both silly and dishonest to talk about an
 insufficiency of money volume.
 Never in it's history has the United
 States had so much money in cir culation per capita as oday. Not only are the hints busy, but the presses of the Bureau of Printing and Engraving are turning out the Treasury notes which we issue every month in payment for the purchase of 4 100000 ounces of silver bullion. If the expansion of the currency could bring relief from trade de- pression or financial embarrassment we should be floating at the very crest of the wave of prosperity. But with larger volume of money and smaller volume of business than Is customary, there has been difficulty and distrust.
 Itis useless, too, to attribute this tn any disturbance over the move ment of gold. That is not trouble in itself, but only a symptom of disease. The vast business interests of the United States are not suffer- ing because a few millions of gold have been exported. In fact, the difficulties of the Treasury have been so ameliorated by public pa triotism as to lessen them to the greatest possible extent. No pre- mium on gold has appeared. The general public has not been allowed for one moment to think that gold would disappear from circulation. By this course of action, for which the banks are particularly to be credited, the $500,000,000 or $6OO,- 100000 or whatever sum of gold is actually in the country las been kept available The silly mischief makers who are talking about a monopoly of gold, and accusing the banks of bad faith, probably know that the banks, which have a great CT stake than any one else in the maintenance of general financial stability, have used their resources liberally in an effort to preserve 1t and to prevent the folly of Congress from bearing it's legitimate fruits We have all the gold that we ever had, less a few millions that have gone abroad and are not worth talk ing into the account of our circula- tion. We have more silver and more paper than ever before, with the amount increasing constantly. If more money could do the busi- ness for us, we should be enjoying unexampled prosperity.
 The only trouble to day is the same as in every period of financial unrest. There Is but one influence strong enough to disturb the mod ern financial system, and that is contraction of credit. If we could keep credit unimpaired, if we could maintain public confidence so that loans would not be called in or re- fused, we might lose every dollar of gold in the country almost with out knowing it; we might contract or expand the circulation medium enormously and find no difference in business conditions. Itis credit which is the great factor in the busi- ness transactions of the present | time. It is by the agency of credit, and not of cash, that the business world is sustained. It is credit, not money. that works the wonders of commerce and finance. Where contraction of the currency would l affect one man, a contraction of credit affects hundred. Where the withdrawal of money would cause one bankruptcy. the withdrawal of credit would be responsible for a thousand. When credit is impair ed, the holders of capital simply lock up their possessions; and, while coin or bank note can be in the possession of but one man at one time. a promise to pay may