Birmingham state herald., 1896-05-24
THE VOLUME OF MCNaY.

It is favorite argument of the advo- cates of the single gold standard to as- sert that we now have more money in the country than we have ever had, and that we must seek some cause other than the lack of currency for the fall of prices and the business depression. They refer to the last annual report of the secretary of the treasury to show that the total amount
 of money of all kinds in the United States | outside of the treasury on November 1, | 1895, was $1,598, ,859, ,316.
 | In the first place, It is not a | fact that there Is more money l in the country than ever before. l This same report shows that the amount of money outside of the treasury at the
 date named was $7S, 2S4. 1o6 less than one year before, and $119 9,685,976 less than two years before that date The contraction of the currency since November, 1895, has
 been more violent than it had been prior
 to that time And in the past we have
 had at times great deal more currency
 than we have now. In 1866 our circulation
 amounted to nearly $2,OOO,O ,OOO, 900, with a
 population of only little over 35,000, 900 about half of our present population.
 Again. 1t is believed by many that the
 estimates of the treasury department as
 to the volume of currency are vastly too
 large. Some very eminent and impartial
 authorities say that we have not as much
 gold coin in the country by s2O0, 100000 as
 the treasury officials estimate.
 But however that may be, the figures
 of the treasury department do not estab-
 fish anything that can be material to the
 contentious of the gold advocates. Fig
 ures are often misleading, if they do not
 lie; and this is especially true of all fig
 ures as to the amount of money In circu-
 lation. We must always remember that
 it is the amount of money in actual cir
 culation that affects prices and aids in
 the conduct of the business of the coun-
 try. Nearly two-thirds of the volume of
 money estimated to be out among the
 people is credit or token money, which 1t
 is the policy of the government to re-
 deem in gold, either directly or indirectly,
 on presentation. When credit money Is
 being continually taken to banks and
 treasuries and redeemed, 1t not only for
 the time being renders no service in hold
 ing up the prices of commodities and in
 encouraging trade. but it prevents the
 standard money from doing its natural work.
 Under existing conditions in foreign countries-when European nations are availing themselves of every opportuni- ty to accumulate gold to store away in their war chests, and, in some cases, to
 take the place of paper currency, which
 has constituted the bulk of their circula-
 tion-it is folly for the. United States to
 expect any increase in the volume of
 money in actual circulation by the is-
 sues of credit money so long as we con-
 tinue the policy of redeeming all other
 kinds of currency in gold only. On the
 contrary it is evident that if we adhere
 to the single gold standard we must in-
 evitably further contract our currency. Under present conditions it is impossible for us to keep much greater amount of money in circulation than is necessary to hold general prices up to the interna- tional level for gold standard countries. 1t matters not how many millions or bill lions of dollars there are in the country. 1 If a greater amount does for time get | out into the channels of trade the effect must be to cause some activity in busi- | ness and to raise the prices of staple products. The markets for products be- | coming better here than abroad, the inn ports of goods increase, exports decrease, and gold must be procured to settle for | egn balances. A rush of greenbacks and other credit money to the treasury to be exchanged for gold follows, and the money in circulation Is automatically contracted How often have we seen these things take place in this country | during the last few years?
 Experience ought to teach us that if we intend to expand the volume of our | currency so as to meet the growing de- mands of a great nation of people we | must abandon the single gold standard.