The sun., 1896-10-04
INITIATION BRINGS PANIC.
A Government OncIaI Gives Facts on Which
He Bases That Assertion.


| From the Washington Erenin0 Star.
1T is not a popular statement just now, but 1t
| is mono the less true" said Mr.. George NJ Cot
| fin, Acting Comptroller of the Currency that
| the sudden addition Of large amount of money
| to the volume OF circulation is not a good thing
and this is true whethcr the addition represents
the best money or the worst"
"What facts have you to sustain this asser-
tion ?" he was asked.
I'VE have the facts of the financial history Of
the United States for the past fifty years to sup
port it," replied Mr.. Coffin. "One of the worst
financial pancs the country ever had was that
| OF 1857. occurring about seven years after tho
vast discoveries OF gold in California and Aus
trala. An Investigation OF the causes OF this
panic and depression, undertaken by the Boston
Board Of Trade in 1858, showed that one of the
chief OF these was the large volume OF gold coin
added to the supply OF money. 1t operated in this
| way: The mine owners had to invest these enor-
nous amounts and n favorte investment was
the building of fast-saiing clipper ships for
ocean trade. This was done to such an extent
as to increase the tonnage OF the United States
by o" nor cent. between the years OF 1916 and
1886. The natural effect of building more ships
than was needed was to greatly cheaper ocean
freight rates. ana this bore fruit In the impor-
tation OF foreign goods into the United States
for which there was no demand, and which were
sold at n ruinous sacrifice. Extracts from this
committee's report will be found in the report
of the Commissioner of Labor for 1886 on in
dustrial depressions.'
Tho panic and business depression of 1873
were directly due to the same cause with the
exception that the increase consisted of depre-
cated paper money instead OF gold. In 1861,
at the beginning of the civil war, the total
money in the United States was estimated at
S45o 900, 600 OF which Sn5O 900 900 WAS snecIc
and S"O@. 0OO, 900 was State bank circulation
BY 1865 the total money had increased TO s77o-
100000, and in 1873. when the panic occurred,
there was STA 100000. This increase consisted
almost entirely of green backs and national bank
notes, only S25,000,000 being represented by
specie. gold and silver were at n premium
and not in circulation.
Again. the panic OF 1893 attribute chiefly
to the same cause-undue imitation OF the cur.
rency-and official figures bear out this view.
In 1873 the total money was STA. 0OO, 600 and
BY 1893 this had increased To the enormous sum
OF 81, 323 ,000,00 This great Increase was rep
resented by the restoration of gold TO current
circulation. due to the resumption OF specie pay
ments by the United States by the large coin
ngc OF silver from 1878 to 1890 and lastly, by
the issue OF Sl56.00O,0 900 Treasury notes issued
under act OF July II, 800. for the purchase of
silver bullion, hut redeemable in gold This
was the straw that broke the Camsl's back
in 1888, for not only did this act add 81 80 O0O-
900 to the volume OF currency in u little more
than three years time, hut the unscientiiG
method OF the Increase shook public confidence
IN the ultimate stability OF our currency and
FASTENED disaster.
Now, il therels any rational conclusion to be
drawn from these facts OF history. it is that un-
der the operation OF n natural law any sudden and
large Increase OF the volume of money is sure to
induce speculation. and speculation as certainly
causes panic and depression OF llues."