Year: 1873




No question so much occupies the thought OF the
people OF the country-whether bankers, mer-
chants or business men OF all classes-as the
problem, how can our currency be made elastic p
that Is, extending itself when extension Is needed,
and capable OF contraction when it's full volume Is
not needed. The financial disturbance through
which we are passing has probably proved to the
satisfaction OF every rejecting mind that our legal
tenders the best possible currency for our
people. Backed by the honor, financial ability,
not to say property. OF forty millions OF people, they
have value In themselves as Intrinsic az gold so
far as their stability and convertlbity into other
property are concerned. Nay, we are told that
during the crisis, when gold was offered for wheat
at Chicago, the reply was that greenbacks not
gold, only would purchase wheat, the reason being
obvious, that gold had become merchandise merely
and not money in this country; so that the propo-
sition was simply barter or trade OF one species
OF merchandise for another.


Again. nobody doubts that our currency Is
TOO restricted In amount at some period OF the
business year to meet the wants OF trade although
many believe that ordinarily the amount Is SUI


cient for the transaction OF business to which 1t Is
applicable.


Currency is in fact the money OF retail and OF the
jobber the bankers check book, the merchants
ledger, bills OF exchange and promssory notes
being the currency or wholesale. Our greenback
and national bank issues, exclusive OF frac-
tional currency. together nominaly amount to
$700,000,0 900. but OF that IL may be safely cal
culated there is at least s150oo0,oo0 OF reserves.
There would be more II the exact letter OF the
banking law were carried out.


Now it will not be forgotten that most OF this
currency OF ours has been practically In circulation
for 10 years unredeemed, aud, in large part un-
It.ig hat m r.
rency which the government has redeemed there
is loss OF quite $4,OOO,OOO which cannot be ac-
counted for, 1T being the worn out and destroyed
paper. We do not mean to assert that the amount
OF worn out and destroyed national bank and legal
tender currency is as much In proportion to the
issue; or, In other words, that the sum lost ana
destroyed Is to $70o.oOo,00o as $4,o0o,ooo Is to
$40 00o but still the sum lost and destroyed,
especially taking into account the great fires that
have swept over business centres the last few
years. must be very large indeed. This. together
with the boarding, practically brings our
currency In actual circulation to less than
$500 00O or say $l2 so to each individual Now,
the currency OF Great Britain. including the joint
stock banks, is about $l4 so an individual. reck-
oning gold, silver and bank notes. If such an
amount is enough for people, majority OF whom
do not eat meat once week, what must be the





whom eat meat twice or three times day.


The question then recurs, how shall this cur
rency be extended ? OF course it cannot be done
by the government unless the government re-
ceives an equivalent Tor its issue. NO one pro-
posed that the $4,000 900 OF reserves should have
been issued in the time OF the panic, except the
government should receive an equivalent portion
OF it's bonded debt. But would the So, ,000, 900,
If 1t had been put out by the Secretary
OF the Treasury, have afforded substantial relief
On the contrary would it not have been absorbed
at once, as were $12,0o00o0 by the banks, es-
pecially savings banks, in order to strengthen
themselves against prospective run upon them
by their depositors and creditors, thus simply
taking it from the Treasury, where 1t was locked
up, but from whence it might be issued, into pri-
vate vaults where 1t would not be Issued until the
panic was over, and the use of it was no longer
specially desirable.


Assuming therefore, all agree substantially that
some relief must be afforded by an extension OF the
currency, we are brought to consider the various
schemes proposed to that end.


One Is an immediate return to specie payments.
The utility of that may be demonstrated 1t would
seem, in word. In the late panic nobody refused
to take currency. Everybody was eager TO get it,
II $500, ,0oO coo OF currency tailed to do small
portion or the retail business OF the country and
the payment OF the workingmen, what would the
sum OF sso,Oooooo or $1Oo,ooOOoo, the largest pos
sibe amount OF gold claimed to be In the country.
have done toward the same end?


Another proposition is that the government
should increase the legal tenders to the amount
Of $100, 100000 or more. But how Is
the government to do thiss How is it
to get any man to pay for and receive this
money! 1t certainly cannot issue it without
an equivalent. 1t may, indeed buy its own
bonds, but all the bonds that it has bought
has been at a greater premium than 10 per cent.
Ought the government to be called upon to attempt
to furnish currency to the people, losing 10 cents
the dollar for such accommodation, or the large
premium it would nave to pay in buying It's bonds,
which would increase in price because OF the very
demand for them?


Another suggestion Is that there should be free
bankng-that is, allow whoever shall choose to
associate together, ascertain how large figure
they would like their capital to represent. buying
with that United States bonds, depositing those
bonds with the Treasurer. receiving therefor bank
bills within 10 per cent OF that amount and then
loanlng these bills TO their customers at such
percentage of interest as their necessities or the
caprices or speculative desires OF others
establish as the going rate of interest to
be paid for bank discounts. Free banking, it Is



who have loaned money to the government and
taken Its bonds, payable at given rate OF interest
therefor, on given time, are allowed to associate
together. and upon the pledge of these bonds in
the Treasury borrow money OF the government
to 90 per cent OF that amount, to loan at rate
OF interest fixed by themselves to whoever may
need it. Now, why may not this be well done
by the government ITSELF without the intervention
OF such banking association, with their salaried
officers, expenses OF administration, dividends and
profits to their stockholders, TO say nothing of
peculations and defalcatons, saving all that to the
mass OF the people themselves


suppose the government could arrange to loan
to every individual at his request amount equal
to the bonds he holds against the government
why should not the individual have that privilege
rom the government as well as an association OF
individuals known as . bank Why should the
possibility OF procuring money from the govern