Year: 1876

| Tne Democrats fn Congress and the


Currency-How Not 10 Do IL.


The deadlock between the hard money
and rag money democrats in Washington
recalls a story told by Horace Walpole and
applied to some ministry of his time
shipmaster calls out. ''Who's there?" A
boy answers, "Joe, SIR" ''What are you
doing, Joe?" Nothing, sir" where's
Tom" Tom answers, 81 am here, sir
''What are you doing, Tom?" Helping
Joe, sir" This odd sort of helpfulness in
doing nothing fitly represents the relation
to each other of the two wings of the demo-
cratic party ON the currency question Ii
the people call out to hard money men and
ask what they are doing on that subject
they could only make answer that they are
doing nothing, and the rag money men
could, in this sense, say with great truth
that they are helping the hard money men.


The latest method proposed by the hard
money democrats for doing nothing is bill
said to have been drafted by Senator Thur
man. of which leading provisions are; first,
resumption of specie payments at the end
of ten years second, regular annual accu-
mutation of gold during that period, both
by the national banks and the Treasury;
third, permission to the banks to count their
preparatory stock of gold as part of their
lawful money reserve.


1t cannot be disputed that accumulating
stock of gold is a necessary preparation for
specie payments but this bill proposes to
manage it in an expensive and clumsy man
ner So far as the Treasury is concerned
the government would lose the interest upon
greater reserve of gold than it would be
necessary to accumulate on more judicious
plan. At the expiration of the ten years
nearly the whole amount of gold would be
suddenly paid out within few days, for the
process could not stop SO long as there
was the slightest fraction of difference
between the value of currency and
gold. There would be sudden, vio-
lent and convulsive contraction of the cur
rency, whereas the contraction ought to be
so gradual, steady, quiet. and spread over so
much time as to cause no rude shock to the
business of the country. BY the proposed
bill the contraction would come all of





years were up but the reasonable method is
to contract the greenbacks meanwhile by
slow process of funding, which would bring
them to par before any gold is paid out for
their redemption. By this method there
would be no sudden drain on the stock of
gold at the date of resumption, and only
comparatively small accumulation would be
needed.


1t may, indeed, be said that the paying
out of vast amount of gold within the first
few days after resumption would cause no
real contraction of the currency, inasmuch
as every hundred dollars of paper money
taken out of circulation would be replaced by
hundred dollars of gold, leaving the volume
of currency as great as it was before. This
is short-sghted argument because the
sud den substitution of on exportable for q
non-exportable money, in an expanded state
of the currency, would be Immediately fol-
lowed by heavy foreign drain. 1t is not
more certain that greenbacks would be rap
idly exchanged for gold until their value was
equalized than it is that that gold would
be rapidly exported from the country until
our currency was brought to the level of that
of other countries. The method proposed
by this bill would produce sudden and
enormous contraction of the currency ut the
end of the ten years, bringing convulsion
and ruin. The only safe way is first to bring
the currency to par by gradually funding the
surplus greenbacks, when moderate re-
serve of gold would suffice, because nothing
could then be gained by run upon the
Treasury. If Mr.. Thurmans bill has been
correctly described, it is the height of inn
provident absurdity.


1t is exposed to another fatal objection
by its skulking tendency to initiate the
currency throughout the ten years. Moth
ing could be palmer than that it
would have this effect. The imitation
mischief lies hidden in the provision
authorizing the national banks to reckon
their accumulating stock of gold as part of
their lawful money reserve. The green
backs now locked up in the bank reserves
would be released and put in circulation by
the substitution of gold in their place, so
that Mr.. Thurman's bill is an artfully dis
guised measure of imitation. There could
not be more convincing proof of the
strength of the rag money wing of the de-
mocracy than this attempt to harmonic the
party by an initiation measure masquerading
in hard money costume.