Year: 1879

Terms are being constantly either
invented or reintroduced after having
become obsolete, of whose meaning
it is important, that the public should
have just conceptions. Elasticity of
Money" is one of this sort of ex-
pressions.


No doubt to many minds the
finance question seems worn out, and
therefore, unlnteresting; but until
some permanent form of currency is
decided upon, it will be necessary to
discuss and rediscuss the composition
of our circulation. The country can
not afford to be indifferent to anything
that forces itself upon the considera-
ton of either the executive or con-
gress.


Notwithstanding those constant re-
endorsements to the vehicle of thought
that have been alluded to, a very
prominent difficulty is encountered
at the threshold of an inquiry into
what constitutes "elasticity of money
This arises out of the present poverty
of financial language. Everybody
understands that our currency con-
sists of coin and notes. These notes
are subdivided into governmental and
national bank issues, and often styled
money, when in fact they are only
promises to produce that commodity
on demand. Another thing to be
borne in mind is, that although the
term currency embraces coin and
bank paper, it does Lot include all Of
either. To call either the coin or
greenbacks or blackbacks that are
locked up in the vaults of the treasu-
ry and banks or boarded up by lndi-
viduals, currency, misnomer. The
term currency. to be properly under
stood, ought to be restricted to actual
circulation, and some word ought to
be invented to distinguish that por-
ton of it from the reserves of the
treasury, banks and misars. If that
were done, there could always be an
intelligent comprehension Of the ex-
pansions and contractions of the cir
culation.


Now, if there were in existence one
thousand millions of dollars, and
three hundred millions of them were
in the vaults of the treasury and two
hundred millions in those of the
banks and individuals, there would
be but five hundred millions in cir
culation. At the same time these
reserves might be capable of being
either increased or diminished. They
might be enlarged by Withdrawals OF
currency, or lessened by additions
made to its volume. This would be
either contraction or expansion. Ii
is also important to consider that
these additions or diminutions of re-
serves might conform to the changing
interests of the treasury, banks and
people, and it is this condition OF
adaptability to existing necessity that
makes "an BLASTING currency Oul
entire circulation might be either
coin, or greenbacks, or national bank
notes; and yet, if it were capable o.
being either increased or diminished
according to circumstances, and was
regulated SO as to meet existing de.
mand for it, it would be "elastic. ~
To restrict the term elasticity to any
portion of the currency, would be 8
mistake. 1t will not do to affirm that
because blackbacks are subject to be
redeemed by greenbacks or coin.
that, therefore, they constitute the
elastic part of our circulation. Coir
and greenbacks are as elastic in theil
nature as bank notes. Neither o.
these three elements of the currency
is destroyed by interchangeability
The one redeemed is only temporarily
retired to be brought forth when de-
mand shall arise for 1t. The conclu
sion then is irresistible that our pres
ent currency is as elastic as any tha
it is possible to substitute for it.