Year: 1874

A caucus Of Administration Senator'S has
agreed upon measure which 1t presents 10
Tho country as method of reaching specie
payments. The effect of the measure, should
it take the shape of q law, would be precisely
of an opposite nature. 1t would increase the
depreciation of the paper money. Ii would do
this in two ways. In the first place it would
add to the number of banks. A bank is an
instrument by the use of which payments are
made by checks> and by transfers of credit
on the pages of ledger. without the
use of money. TO estalnieh banks in
q hundred places where they do not now
exist, would diminish the value of the m6n,Ev
of tho country by diminishing the uses for
which it is required. That has been the in
variable experience wherever banks have first
been introduced, or wherever the number OF
them has been greatly increased. We may
point to Scotland as an example. There bank
ing has perhaps been carried to the greatest
perfection, and there the use both of coin and
bank notes is economical to so great a degree
that o. vast amount of business is carried on
with an incredibly small amount of actual
money. This is so elementary fact in the
science of money that it is disgraceful, even to



Quainted with it.


But the measure we are discussing proposes,
not merely to increase the number of banks,
but to add to tho number of paper dollars.
To provide circulation for these banks it pro-
poses to give them one hundred and twenty
five dollars in bank notes, of which one hun
dred dollars will supply the place of legal
tenders withdrawn and Cancelled. and the
other twenty-five will be direct initiation OF
the irredeemable paper money in crculation
For every eighty dollars Of greenbacks paid
off, one hundred new paper dollars will be
created. AS q preparation for the resumption
of payments in specie, this plan has the two
serious disadvantages of indefinitely incrcas-
ing the appliances by the use of which pay
ments are made without the intervention of
money, and at the same time of increasing the
currency itself. II is transparent piece of
cheap money quackery. Our paper money
is deprecated ten per cent below the gold
currences of the world, and even at this val
uatlOn our specie has not the slightest tend.
sncy to remain with us. Every dollar pro-
duced by our gold and silver mines, not
required for use in the arts and not boarded,
is exported. Will the specie remain with US
any the more should the Treasury, by an
abortive effort at resumption, make the money
of foreigners of ten per cent less purchasing
power in buying our exports, and the goods
of foreigners of ten per cent greater pur-
chasing power in buying our goldf Yet that
is precisely the meaning of all projects for
rcsuming specie payments without either q
contraction of the volume of the currency or
patiently waiting for the country to
grow until the purchasing power of the
paper dollar has by the expansion Of trade
been made equal to the purchasing power of
gold. Unless the volume of the currency is
kept within its present limits the growing up
process might require q century. Beyond a
doubt under the operation of such q measure
as that proposed by the Senators. the 1st of
January, 1879, would find us not q particle
nearer gold prices than we are now.


When Congress "legalized Mr.. Richard
ardson's $26,OOO,000 Overissue of the legal
tender circulation, 4 step was taken in the
wrong direction, and the consequences of that
step are now visible in higher premium on
gold, and a stronger tendency than ever on
the part Of that metal to leave the country.
The free banking project just broached is a
proposition for sliding back still further. The
proposed substitution of silver for fractional
currency is equally ridiculous, because the
silver, unless Overvalued by the full amount
of the depreciation of the paper dollar, would
be melted down and sold for bullion rs fast
as it was coined. Why will not Senators take
the trouble to understand tho causes of the
depreciation of our paper money before
making themselves q laughing stock In tho