Evening star. [volume] (Washington, D.C.) 1854-1972, 1893-07-20
Contraction aud Imitation.

10 the Editor of The Evening Star:
In yesterdays STAR William Birney, in op-
posing las do the proposed ten-miIlion dollar
loan,said: Twenty millious( equivalent to thirty
millions if the gold standard be adopted) is a
burden heavy enough. IL the COIN
age be contracted, as is threatened &c.
have not heard Of any proposition to adopt
the gold standard any more completely than il
has existed since the resumption of specie
payments in 1879; have heard objections to
the abandonment of that standard and the
adoption Of silver one / have not heard of
any threat to contract the currency: the most
heroic measure have heard proposed has been
to repeal the Sherman act and cease ex-
panding the currency
Since Mr.. Birney is so fearful Of contraction
OF the currency, it may be well for him to note
that 1t has been enormously contracted already
~ the result Of our recent pro-siver legislation.
and fears Of more of the same sort During
the year ending June 80, 1885, our exports Of
gold amounted to clos, $50. 1884; our imports to
s2i.1I4, 3oi, excess of imports over exports
SS7, 500. 463. There. to begin with, is a con-
traction Of aS7 500 900.
few years ago there was outside Of the
treasury and Of the national banks, over $500 :
600. 900 in private hands in circulation. (See
report OF the director of the mint for July /.
1921. Where is that gold now? Hoarded by
its owners, who think that if gold is destined to
go to premium they may as well reap the
profit as to have it go to the banks or the gov
eminent. There 10 contraction of the cur.
rency TO the full extent of all the gold that was
once in circulation. but now has gone out of IT.
those OF the citizens of the United States
who are possessed Of ordinary intelligence land
this embraces a large and increasing propor-
ton of them) are well aware that there has
never been a rapid imitation OF the currency
without most baneful results. Witnessing the
utterly needless purchase of 4, 500 900 ounces of
silver per month, and threatened with the free
and unlimited coinage Of ffty-cent silver dol
lars, the timid class Of community decided
to take their cash ont of the banks rather than
risk its loss in the financial crash they feared
The banks, having less money on deposit had
less to loan. The calling in Of loans and the
refusal to make more. because all the money
obtainable was needed to satisfy the demands
OF depositors. by just so much reduced the
amount of money in circulation. From the
LIST Of January to the LIST Of June, 1898 accord
ing to the reports Of the national banks
to the controller OF the currency)
their resources were thus crippled to the
amount OF seventy eight millions OF dollars
When we read IN yesterdays dispatches that the
State Bank OF Denver has paid out to depositors
1000 within the last thirty days;the German
National Bank OF Denver one million dollars
within the last sixty DAYS, and that the same
work Is going on all over the country. We may
realize how rapidly money is being Withdrawn
from circulation. Is there in Washington. or
any other community, ten dollars obtainable
ior ouslnesssuses now where sixteen dollars could
De obtained year ago. II not. then there has
been within the past year practical, actual,
alsastrous contraction to the extent Of six
hundred millions Of the nineteen hundred mil.
hons OF dollars that constituted our circulation
year ago.
~ is - De hoped that the discerning public
will see that the dangers which Mr. Ri1nav in
agires will result from a cessation of imitation
are very minor matters compared with the
e vifs that have already come upon us because of
the contraction born of the unwise imitation of
the past. ]. L. McCREERY.