Year: 1879

n. Y. tribune.


VIII.


sTAGNASr CURRENCY SURELY GROWS FOUL.


Take care of the quality and the quantity
will take care of itself. As to money, that is
the golden rule for any people. Keep the
money good, and any lack will be quickly sup
piled. For then coin will come or go as it is
wanted, and the people can freely fix by their
acts the amount of notes or coin they find most
useful. If they have too many notes, some
will be redeemed, and this is not contraction.
but substitution of coin for notes in use. If
they still have too much money gold will go
abroad, but this is only sale of property for
which we have no present use


So of good money there can never be too
little But of bad money there can never be
enough. All our trouble about money springs
from ignorance of this fact. Yet it is as abso-
lutte a law of nature as that stagnant water will
get foul. Stagnant currency, that is not kept
pure by free redemption in coin, will inevita
bly, get bad and insufficient for the work it has
to do


Paper money is confined to one land; gold
goes to all lands, and is the money of the
world. If the paper and the gold are freely
tlO SOlu WIZ SOLLiO III VI SN ONe, e~7
more or less money may be needed, and thus
the whole may be kept pure. But if they are
not freely exchanged, the gold at once becomes
the better because it can travel, and pay for
eigners in our ports and on our borders. The
man who has both will never pay out the gold
when the paper will serve. The difference
may be small at first, but it is fatal Gold can
do all that the paper can do, and some things
more; therefore men will not pay out the gold
at par for paper, lest they may fail to get it
back. No one will then deposit or lend gold,
to take pay in paper. The gold passes out OF
use as money it can no longer serve as reserve,
nor go freely from hand to hand. Men who
have it will lock it up in special deposits, or
private safes or boards. 1t becomes merchan-
disc, and the amount of current money in the
country shrinks to that extent. This causes
real scarcity but gold will not go to that coun-
try because there is no use for it there. 1t goes
abroad, because elsewhere it is more needed.
Whatever stays hides itself, and adds no more
to the supply of money than so many pounds oil
lead or ounces of diamonds would add.


This very thing would result in this country,
if redemption of paper money should DO
stopped We should take away from our pres
ent supply of current money all the gold in the
country, which would vanish from sight into
the hiding-paces and locked vaults where it
waited seventeen wears, and at the same time
we should close and bar the doors against the
unlimited supply of gold that the world has ON
hand AT this hour, disaster would strike
down reviving trade and industry, were 1t not
known that S50000000 in bullion, not needed
in the Bank of England, had begun to come
hither even before the need OF 1t was felt. No
man who holds that more money is needed
here should consent to shut out that full sup
ply, and to take away from our current money
all the gold now in use.


In every land there are times of special need
for an enlarged supply of money. Here, such
need often comes with the movement OF the
crops. AT other times, in every land, too much
money is found in use, and if the excess is not
relieved by outflow, wild speculation is apt to
come, until bread and goods are made too dear
for consumers In April we exported 81, 2,450,-
900 of specie. which in August we shall take
back again. Thus in times of lack or excess,
gold flows in or out, but paper can do neither.
When there is too much or when there is too
little, there is no help for it without redemp-
tion, save in the slow action of Government.
If more is issued to meet temporary want,
there will be too much after that want has
passed, and, long before Government can with
draw any, mischief will be done. That is
stagnant currency; it can neither flow in nor
out At some period it is certain to be in ex-
cess of changing needs. Then speculation
kindles and prices rise. Each dollar will buy
less, SO that all the money in use scarcely SUI
fees, though the season is not one OF great
natural activity. But when the season chan
ges and there is more work to be done by
money, suddenly there is great lack. The
money in use has lost part of its buying power,
prices having been pushed too lar. A wild
outcry is raised at once for more money, and OF
such money fifty times as much would not be
enough. Having begun to depreciate, and to
get insufficient for its work because it has de-
preciated, it will grow worse as surely as
specked apples will rot


n fhar oil tf hp nnf
enough. 1t breeds the gambling fever, and
more money is wanted in two days of wild
speculation than healthy trade would need in
week. 1t breeds habits of waste, and when
forty millions of people are spending quarters
as if they were dimes, more money IS always
wanted. 1t prompts retail dealers and middle
men to higher charges, in order to cover their
risk from sharp changes of price, but tLelr
higher charges make more money wanted.
The trouble is that the stuff will not buy
enough. In time of temporary excess, it could
not get out of the country, and so pushed
prices upward, until it has lost part OF the buy
ing power it pretends to have. Then in time
when full currency is needed, prices and
habits will not yield quickly enough to restore
the lost buying power 1t is a short task to
pour q gallon of water into gallon of whiskey,
but it is not so easy to get back the pure liquor
of full strength. So there is painful lack OF
money and an intense demand for q larger is
sue of notes. Never yet has any Government
wholly resisted that pressure. Strong appeals
are made to ignorance and passion. The poor
are told that money is scarce only because some
rich men please to make it SO. But the real
trouble is only as to the quality, not as to the
quantity of the money. Like some powder
made by Confederates during the war, there
was enough of it, but it would not throw bull
lets far. 1t did no good to mix more charcoal
with it, and it does no good to add more paper
to a deprecated currency. The money cannot
do the work because it is too poor; not because
there is too little of it,