Mexico weekly ledger., 1895-05-02
Money, Banking and Currency,
From Harper Weekly.

the gold money were increased, the
result would be waste of wealth. If
the stock of gold and silver were in
creased, in addition this waste of
wealth the stock of coin that could be
used for money would grow less both
in value and actual amount. The reas-
| OH of this Is that gold would disappear,
because men would use that money
which is cheapest. The wage Garner
| would be paid with a silver dollar, be-
cause his employer could procure a
silver dollar with less exertion or few
er goods than he would have to expend
to procure a gold dollar or paper
representative dollar that was payable
in gold. The foreigner would send his
silver to this country, and our gold
would go where it could find employ
ment. If, for example, Mr.. Bland had
had his way and secured free coinage
of silver, our metallic money would
have shrunk nearly one-half. In 1894
we had in the United States, according
to the estimate of the Director of the
Mint, gold of the value of 1925, 800, 900,
and silver of full legal tender value to
the amount of S549, 200, 900. If we had
become silver country, our legal
tender coin would have shrunk, by
reason of the disappearance of gold,
from 81, ,176, 300, 900 to S549, 200, 900. This
would have been the result of the ef-
forts of Coin and the disciples of his
Financial School," They would not
only have reduced the amount of our
coin by driving gold out of circulation,
but they would have reduced the pur-
chasing power of the unconverted
paper, of which, according to Mr..
Preston, the country had S475, 900
in 1894. If paper dollar is made re-
deemable in silver dollar which will
buy only one bushel of wheat, when a
gold dollar will buy two bushels, the
paper dollar shrinks to the value of
the siver dollar as matter of course.
Let us suppose that our storekeeper
is himself the purchaser of the products
Of his neighbors, and that he pays for
his purchase in coin. He buys Coins
book and imagines that his safety and
the prosperity of his neighbors de-
mand that he shall have a large supply
of metal money. Heretofore he has
bought about 100000 of products ev-
cry year, and he has used about $780,
600 in coin, the rest of his payments
being made with goods in his store
| wnIUn Une FARMERS uOUaOa. TuOoe
goods he has bought with checks an6
notes, after the manner which we have
described. But now he secures stock
of coin equal to the sum involved in
his transactions-S10 200. In order to
do this he must buy the coin. Coin
cannot be had for nothing. 1t is bought
with wealth. The storekeeper buys il
with the goods with which he has sup
piled himself for the needs of his
neighbors. The community is SO much
the poorer. 1t needs just enough
money to pay off the balances that are
left after all its trades of the year are
consummated; but the storekeeper's
conduct has made it impossible for
those local trades to be carried out
The goods which constitute his contri-
button to the trades have been sent
off to secure his coin, and so the farm
ers left without tn em-having money
it is true, but money cannot be eaten
| fnr inn
plements. 1t can buy all these things
but too much of it causes them incon-
venience and expense. In order tC
procure his stock of money the store.
keeper parted with his goods, and il
was these goods that the farmers really
wanted to buy through the sale of theil
products. The money was only useG
when a farmer was either not ready
to buy the goods or when he wanted
something which the merchant die
not have, or when he wanted to put il
away for saving or for other purposes
AS it is, the farmers will be obliged tc
travel to a distant town TO buy theil
goods, and the expense and trouble o.
this are what the storekeeper's adop
ton of Coins system has cost them
Multiply this expense by millions, ant
we will have an idea of the wastefu
extravaganza of securing too mucl
money or dead capital for the Who'll,
country.
In 1872, before the passage of the ac
of 1873 which omitted the silver dol
lar from the coinage, there was onl
1926 ,000, 900 of coin in circulation, bu
there was S346, ,00O, 900 in greekacks
1929 ,O00, 900 in national bank notes an,
S31 500, 900 in certificates. Altogethe
there were s73s, ,O00, 900 of money in cir
culation, or about S1s.19 for each per
son in the country. Then followed tn
panic of 1873, and the amount of mon
ey kept on increasing, except in 1876
> 1877 and 1873, when it diminished
Silver, as Coin and his kind assert, wa
"demonetized"; but there was no sill
yer in circulation, except minor coins
in 1872 and 1873. After 1878 the amour
of money kept on increasing in tn
country. Prices went up and dow
without reference to this even in
crease. Prosperity came back whel
there was in circulation about s16, an
again when there was about s23, TO
each person in the country, and har
times were upon us when the amour
in circulation had grown to be abou
s25 per capita.
In 1894 there was more gold in cir
culation than at any other time With
the twenty-five years. In the pani
, years, and those Immediately preced
ing them, there were more silver stand
ard dollars In circulation than ever be
: fore. The circulation OF greenback
fell off ,and that of national bank note
slightly increased.
All this teaches that the amount O
money has very little to do with panic
or hard times. The amount of metalli
money that should be kept as re
serve for the redemption of paper, OIL
in other words, the settlement of bal
, ances, is best judged by the experienc
r Of the bankers. What the countr
needs chiefly Isl currency system tina
can respond to the demands of bust