The times. [volume] (Richmond, Va.) 1890-1903, 1894-12-30
How Populists VIII Contract currency.


Il appears to me that the attention OF
the hubble has not been sufficiently d.
rccted to the consequences which must
ensue upcn the failure Of Congress 10
mass 4 proper law for the relief Of the
United States Treasury from the enbar-
r.ssments caused by the legal tender
notes through the medium OF an extern
sion of bank note currency
4 failure 70 pass q banking bill must
under existing circumstances, lea TO
very substantial curtaiiment Of the ell
aulaticn Of the country
The cause Of the d.strust Of our cur
rency system which now prevails At home
and I'm Europe. and which is mainly re-
sponsible for the continued depression ~
business. is the existence OF an immense
amount Of legal tender paper WI Oh me
Government has promised 10 pay on de-
mand In gold. but FOR the redemption or
which it has not FOR long time held
sufficient gold reserve.
50 long as this vast amount Of legal
tender remains 1hoat and distrust con-
tinues 10 prevail IL will be In vain 10 nope
that "a sufficient gold redemption fund can
be maintained How, then, is confidence
30 be restored? il must be
restored either by providing a
sufficient gold reserve or 10y taking i'm the
ing them mp whore they can do no
further harm.
II Congress were to pass a bill for the
funding Of these legal tenders. or "a con
siderable part of them, S. would AT the
same time guard against the contraction
of the currency by authorizing banks to
issue notes upon such attractive terms
as would make it certain that accord
!ngy as the legal tenders were retired
their places would be filled by other
paper circulation.
But If Congress refuses 70 Iecslate
we have been warned b. Nj Cleveland
that he viii continue % sell bonds so
long as il may be- necessary To provide
a gold reserve. doubt II the public gem
orally has appreciated the full sisniii-
canoe Of this declaration. II has Judged
Of the effect Of selling bonds by the re-
suits Of the sales which have already
been cousummated. They have seen the
gold paid i'm For the bonds going out al
most Immediately for redemption pur-
poses This has been largely due 10 the
fact that the revenues Of the Government
have been showing "a monthly deficit of
many millions of dollars and when the
greenbacks were presented for redemp-
ton they had 80 bee reissued 10 pay the
current expenses Of the Government. But
after January /. 1875, this will be no
longer the case The revenues viii be
about equal 10 the expenditures. n the
Government sells t50000 .000 Of bonds for
$JS,OoJ,oOo as il did i'm November last, that
SjS 10000 will be subtracted from the cir
culatiou Of the country; that IS TO say
there will be $JSy0.00O Of legal tenders
taken out of circulation and locked up
whore they can be no more presented for
redemption, because, as the revenues VIII
b.. "a 4 no tt-tf no M
occasion to reissue them II 10 becomes
necessary 20 continue the operation Mr..
Cleveland says. and he viii DO what he
says, he will issue more and more bonds
and every time he issues SJ0uo0.0oJ Of .
per cent. bonds hc viii lock up $5SoQU. 600
or whereabouts of greeubacks or Treasury
notes. Every time he locks up SlSGOO,O00
OF legal tenders the necessity of a gold
reserve Is enormously decreased. /, would
be- decreased much more than BOZ the
proportion OF $JSeO.0O0 TO the total (say
$4,000 0)U of legal tenders because. first
the legal tenders are scattered AN over
this vast country performing the func-
tons OF money ar every crossroads i'm
every STATE and Territory; second. be-
cause the national banks are required TO
hold 10 per cent. of their deposits in
greenhacks or specie, which OF itself cree
TteS an enormous demand. BY the slime.
therefore, that Ouc-half OF them Were
cOrralled there would be very little use
for q gold reserve. a. there would be al
most an impossbility OF getting large
blocks together and those who had them
would begin % think they would soon be
worth a premium. However that may be-
if Mr.. Cleveland persists I'm his intentions
q time viii certainly arrive when no more
legal tenders viii be presented for re-
ieWutiOu. This Wi produce con-
traction OF the currency equal To the
amount retired. But il will be suggested
the banks wifi buy the @ per cent. bonds
and make them basis for dluonal
issues OF bank currency. So they viii
when IL will pay them 20 increase the
currency on so Improbable a basis
There have been two issues OF per
cent. bonds. amounting to $io0 100000. The
banks have not yet begun 10 use them
as basis tor circulau ton.
\ plethora Of money is what the banks
have been suffering from for more ,han
4 year. There Will have 10 be very
large reduction OF the currency now out
standing, and interest rates VIII have to
advance 20 much higher figures before the
banks Will deem IL advantageous, under
existing laws and taxes, to take out more
currency on such bOnts "a the per cents.
Hence, / say that tip failure OF Congress
10 pass a Banking bill must result in a
large contraction Of ia ecurrency. Is that
what the Populists and Populistlc Demo
Gratis want to bring upon d suffering peo-
pie? Very truly yours,
JAMES II. DOOLEY.
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