The times. [volume] (Richmond, Va.) 1890-1903, 1896-10-11

1T is not q popular statement just now,
but 10 Is none inc less true. SAID Mt.
George VI. COnin Acting Comptroller u
tho currency. "tnat the sudden addition
OF a large amount OF money 10 the volume
of circulation is not good tning, ana
this Is true whether the addition repre-
SCENTS the best money or the worst.
"Wnat facts have you 10 sustain TINS
assertion he was asked.
Nv e. nave the ldcts oil the financial MS
tory Of the United States Tor the past hf-
~ years TO support n. replied Mr. Col
hn. zone OF the worst financial paulcs
the country ever had was that OF 1871,
/ occurring about seven years after the
I vast discoveries OF solu in California and
Australia. An investigation OF The causes
Of lLls panic ana depression, under taken
by the Boston Board of Trade I'D lo5s,
showed that one OF the chief of these was
the large volume Of gold coin added 10
the supply Of money. ~ operated 10 this
way. The mine owners had 10 invest
these enormous amounts, ana iaNOilte
investment WAS the building OF iast-sall-
INK clipper ships for ocean trade. Ihis
WAS done To such ana extent as to increase
the tonnage Of the United states by ~
per cent. between the years Of 1916 ana
1866 The natural effect of building more
shius than Was needed was 10 greatly
cheaper ocean freight rates, and tnis bore
fruit in the importation OF foreign goods
into IA, United States FOR which tAcIc
WAS no demand. and which were sO4d at "a
ruinous sacriuce. Extracts from this
committees report viii be found IN the
report OF the Commissioner OF LABOR Tor
1856 on industrial dcprcssiOns.
The panic and business depression OF
1873 were directly due 10 the flmc cause,
with the exception that the Increase con-
sisted of deprecated money instead or
gold. In iAol AT the beginning OF the civil
war the total money in the United states
was estimated al 1852 900, OF which ~ %
OU).OOJ was specie and SZ0Z 10000 was state
bank circulation. by 1910. the total money
had increased 10 S..UvpWv ana ~ 80
when the panic occurred, there was 49,
tfu.UNN This increase consisted almost en-
trcly OF grccnbacks and national bank
notes. only S25.wo.OO0 being represented
hv specie. as gold and silver were az a
premium and not in circulation.
again. the panic OF 1873 ! attribute
chiefly TO the same cause-undue imitation
oi the currcncy-and official figures bear
out this view. In 1873 the total money was
S1l4 900 600. and by 1893 this had increased
TO the enormous su moi 81 90. This
great increase WAS represented by the res
toratiou of gold 10 current circulation. due
TO the resumption OF specie payments by
the United States 10y the large coinage
OF silver from 1873 10 1870. and. lastly by
the issue OF 1856 ON.e uO Treasury notes Is
sued under act Of July H. 1890. tor the
purchase Of silver bullion. but redeemable
i'm gold This was the straw that broke
the camels back in 1893 for not only did
this act add sl56.OCON0 to the volume OF
currency In a little more than three years
time but the unscientihc method OF the
Increase shook public confidence IN the NJ
innate stability OF our currency and has
tened disaster.
Now. II there is any rational conclu-
sion 10 be drawn from these facts Of his
tory, IL Is that under the operation OF nat
urai law any sudden and large Increase
of the volume OF money II sure to induce
speculation. and speculation as certainly
causes panic and depression Of values. -
Washington Star.