The Indianapolis journal., 1893-07-03
Democrats Confronted with q Crisis That
Concerns Uncle Sans Credit.
Secretary Carlisle Issues Letter from Sena-
tor Henderson, Who Draws Dismal Pic
ture Of the Financial Exigence.
Past Silver Legislation Blamed for All
Present Commercial Distress.
Remedy Proposed That Contemplates the Issu-
ing of $500, 900 900 in Bonds and Selling
of Silver Bulli0n-Foreign Views
ONE OF THE BIG QUESTIONS.

ONE OF THE BIG QUESTIONS.
The Monetary situation ExhaustiveIy Treat.
ed by Senator Henderson.
Special TO the Indianapolis ournaI
WASHINGTON. July 2.-That all-impor.
tanr question before the present admins
tfation-tbe monetary situation-what 10
il. what produced tho stringency. where
will it lead, where and what are the tinan.
cial breakers from which the ship of state,
With President Cleveland and Secretary
Carlisle at helm. must be safely steered or
90 to pieces on the rocks-all this has been
exhanstively and. Secretary Carlisle thinks,
carefully and wisely considered in a COM
munication from ex-senator John b. Hen
derson. of Missouri. Mr.. Henderson has
devoted much time to 9 study of finance
and the present situation, and his commu-
Dication to Secretary Carlisle is made pub.
lie to-day. 1t reads:
II pro missed to give you in writing the sub
stance OF my statements made to you in
conversation touching the monetary con-
ditlon OF the country. l then expressed
the belief that the present strin gency Is
produced, not by any lack or insuthclenoy
of our currency but by the loss Of cOnti-
dence produced among business men be-
acter OF large part OF that cure ncy.
There is no error of more common preva-
lence than that the abundance of money
issues necessarily adds TO the CON-
pie. Of course, q certain amount of
money tokens are absolutely essential
with which tn effect the smaller
exchange of commodities. These mon ey
tokens do not create exchanges. but the ex-
changes create a necessity for the tokens.
M0QAV
nor manufacture cloth, nor operate rail-
ways nor sail ships. Labor and skill do
these things. and among Q people entirely
civilized over % per cent of the exchanges
necessary in these operations are con-
sumated through the medium of bank
checks. Experience demonstrates that
this mode OF exchange Is more convenient.
safer and less expensive. and experience
ities become enlarged or contracted as
money tokens become scarce or abundant.
AN MEMORABLE LAW.
This is q business law as inexorable as
the laws of nature. Hence, there is less
danger in limiting the bulk of circulating
money than people generally imagine. The
bank check is better for another reason, to
wit: that having performed It's office it
ceases to circulate, il is removed from the
volume of circulating money and Is for
ever cancelled. If the exIgencies of bnsi.
ness demand another check, il is issued
anew, and that. in like manner. Is de-
strOyed when its object has been accom-
plished. We shall never have perfect
currency until every note used for cirCuia-
tiOn shall be destroyed on it's return TO the
authority issuing it. and no new note is
sued except for value. and only at the call
of business demands. England has come
to this. and America, with Englands ex-
perieuce, will do likewise"
The amount OF money In circulation per
capita among the people OF the United
States on the lat OF July, from 1873 to 1898.
inclusive, Is then given. Continuing, Mr..
Henderson says:
These figures demonstrate to the busi-
ness man of a few years experience that
neither individual prosperity nor COM
meycial activity is absolutely controlled bG
the amount of the circulating medium. The
passage In 1873 of the act for the resump-
tIon of specie payments on Jan. /. 1o79 put
ap end for the time being TO our depreci.
ated paper currency. and from that time
till the passage of the Blend-Aliison act of
1915, we were, In fact. as In theory, on gold
basis. having but single standard of ex-
change, and the benefioient effect of this
single standard. giving assured confidence,
which can be based only on uniformity and
permenency of value, lasted until increas-
of 1875. reached an amount which, In the
constantly declining value of silver.
threatened permanently to unsettle the
currency, 1 think 1 am safe In asserting
that from July /, 1879 to July !. 1888 We
enjoyed very great prosperity. individually
and nationally. There was no lack of
money. 1t suffioed not only to fill the
treasury, bat 1t abundantly answered the
demands of commerce, and an eXtraor-
binary business activity followed by very
high prices. The average per capita circu-
lation during that period was $20.6L. From
July. 1890 TO the present. q period of great
circulation per capita of S2365 1t is there
fore apparent that. in the common par
lance, times may be hard and money
scarce with the most abundant circulation.
II on a given day the active business
men of q community, for reasons good or
bad. but satisfactory to themselves, re-
solve to make no further contracts, to quit
all business transactions, a seeming scarcity
of money Is the result Whatever the
volume of the circulating medium. 1t does
not impose itself on any body. He who gets
it must give an equivalent for IL. 1t
nobody wants has labor or his property he
can get no money. Ii he who has il refuses
to loan it, in fear that the cuIrency to be
paid back at maturity of the loan WI i'll be
less valuable, the condition Is one of stag
nation. and scarcity OF money Is the con-
sequence The per capita circulation In
the United Kingdom of Great Britain is
lating freely among the people. OF silver,
there is only S2.69. and of paper. S2.24. The
per capita circulation In Germany 10 still
Iess-Sl7.56-
NO DEARTH OF MONEY.
'And yet in these ountries. with their
vast commerce and manufactures, there is
no dearth of money and interest rules at
scarcely more than half the rates prevail
ing in this country. England adopted the
single gold standard in 1916 and has ad-
hered to it ever since. and by go doing as
become the money center of the world.
Germany adopted the single standard in
1872 and since that time has been rapidly
adv ancing IN all the elements of national
greatness.
The per capita circulation in France
scarcely exceeds that in the United States
and consisting, as it does almost whoily of
goid. the currency is reasonably permanent
and reliable. and as France has now ceased
TO coin silver. the financial situation there
is not threatened. as here, by
q change of standard. The panic
of 1878 was. without doubt, the direct re-
suit of speculation and Overtrading in
duced by the green back era. beginning IN
ls62-6 Between 1863 and 1873, both Inclu-
sive the balance OF foreign trade against
us was 81 .0S6. 440. .5S7-that is, we i'm por ted
into thIs country during these eleven years
over and above our eXpOrtsof merchandise
this norm0us sum OF over one Thousand mil
lion dollars. This long and steady drainage,
lasting without single intermission for
eleven years. brought it's legitimate frnit.
loss of a large part OF the Nations wealth.
and with it the country's entire stock of
gold. The only currency left us was the