Year: 1876

assumption.


IL seems to me there is good deal of indefi-
niteness in the prevailing popular notion as To
service performed by currency, and as to the
difficulties in the way of returning to snstie
payments. Currency of whatever sort ought
to be of uniform value throughout the country
and on par with gold. Any currency which
1alls in that is inconvenient to the people.
Inc ollls of the United States Bank were per.
lectly uniform in value throughout the
ohiteu states and the British North
American provinces, and no medium of
exchange could be better than they were. ex-
changabe as they were at any time for specie,
without Inconvenience or loss to the helder.


The currency which succeeded to U. S, Bank
tills was local in its credit and restricted in its
circulation, and was inconvenent to the peo-
pie, especially in carrying on of any large busi-
ness. The bills of many of the State Banks
were limited in their circulation TO their own
states, and some Of them to their own counties.
specie as circulating medium is inconyenient,
and has and can have no advantage whatever
over paper currency which is exchangeable
at pleasure into gold without trouble or cost,
While paper currency has important advan-
tages over specie. The only function of any
currency of whatever sort is to enable the
people to buy and TO sell and to pay debts in
the most convenient way.


The iron coins of Sparta were metallic
currency, but exceedingly inconvenient, and
the conducting of large trade would be inn
possible with such circulating medium. The
copper coins of later period were an improve
ment upon those Uf iron, because q larger
value could be contained in smaller compass,
Silver coins were again great improvement
on copper for the same reason; and now in
these later years, gold coins are great i'm
provement upon silver, but only for the reason
that much larger value can be contained in
much smaller compass. This consideration
then is the chief reason for choosing gold
rather than silver, in connection with its more
uniform value.


Now any other currency will be better than
gold II 1t be more easy of transportation more
convenient and of equal value everywhere.
Such a currency are the bills of the Bank of
England. They are equal in value to gold
everywhere, and vastly more convenient for all
purposes OF trade and all purposes of common
life. The traveller in the United Kingdom
| or in any country upon the continent of Europe
| provides himself, not with gold, but with Bank
OF England notes. He may carry value of
them OF 81 900, $4,000 or 100000 in his
| watch pocket or in hts portmonnaie with more
ease than be could take twenty-five dollars in
| gold. Once in the Bank of Englsnd there W as
| put into my hand a small package containing
seven million pounds in bank notes-S35 O00, 600.
could easily put the package into breast
coat pocket. The transportation tof an equal
| value in gold would require many horses and
| heavy wagons.


The currency which we have now possesses
| some OF the advantages of Bank of England
| notes. 1t is of equal value everywhere.
| Throughout our vast domain our greenback
and our National Bank notes are accepted with
out question or hesitation. There is only one
| difheulty about them, they are not equal in
value to gold, dollar for dollar as Bank of
| England notes are, pound for pound. If that
| defect can be remedied we shall at once be in
| possession OF currency SO good that nothing
can be better; even better currency than
Bank OF England bills, because more conven-
/ len. There are none of these of less value than
| twenty-fve.d dollars and all smaller amounts
| must be paid and received in the heavier and
more cumbersome silver or gold. This figure
was fixed by law for the Bank of England
| notes because it was thought to be a good thing
to have large amounts of gold in actual circula-
tion among the people; but this arrangement
| involves considerable Inconvenience, and
| consderal actual loss in gold from the abrasion
Of the coins in friction with each other Be-
| sides this consideration there is another, that
the coins are liable to be lost, loss to the
| world of an intrinsic value, while the loss of
bank bills involves no loss of any intrinsic val
| ne.


1
our present currency by making it equal in
| value to gold? In the early spiBg of 1875 the
| London Telegraph had a leader upon this SUBJ
| ject; the resumption of specie payments by the
United States. The Telegraph said that gold
| was at ia in Wall street. The currency of the
country was (say) 100000 000-and IA per cent
| on that amount was sos, 900, ,000-wnich would


be the actual loss to the country from resump.


tion. The people, it was said, would not be
willing to submit to such loss-and therefore
| nj no nts ma ind


nitely postponed; such was the reasoning of
| the Telegraph. Being upon the spot at the


time the Telegraph kindly permitted me to


point out the error which lay at the foundation
| of its argument.


1 The difference in value between gold and
| currency, IA per cent, would gradually dimin-
ish as the day appointed for resumption should
| draw near. The first element in the mater
| must be, that the public shall have undoubt-
ing faith that resumption shall actually take
| place on the day fixed by the law. There must
be no doubt whatever upon that point Then
| as the appointed day shall draw near-say six
| months, five months, four. three, one, the pre-
MUM on gold must necessarily fall; constantly
fall, until it would be at zero on the day of re-
sumption, and in fact for some days before
| that period.


Any person requiring gold for particular


purpose, say to pay duties at the custom-house,


would go to a bank or a broker with his cur
rency aud exchange it for gold at price fixed
| for that day, as it might be sixty days-twenty
days-ten days-five days before the day of re-
sumption. The price paid for the gold would
be Just fair compensation for the use of it
for either OF those periods, because on the day
fixed the currency would be equal to gold. On
the day of resumption, and indeed for day or
two before, there would be 20 difference in val


ue between currency and gold.


All the talk about difficulty in resuming
| specie payments is founded in the notion that
| on the day fixed for 1T. there would be rush
| upon the banks and the sub treasures for gold.
1t is supposed that everybody having currency
| would hurry off at once and demand gold for
it. There would be nothing of the sort. The
currency is used in the daily-hourly require
| ments of business 1t passes from hand to
| hand, or mostly through the banks by means of


cheques. Who would want gold for his cur


rency? 1t is to be paid away to day, to NOR
row or next week the currency is equal in value


to the gold, and much more convenient-no


one would wish to be embarrassed with the


gold. All the great business affairs of the


transacted through banks The business men


of the country handle but little money. What


ever payments are received in cash are depos


tied in the banks during the day and payments


are made by drawing cheques, not much money


is actually handled, almost none in great COM


mercial affairs. There would be no run upon


the banks or upon the sub treasures on the day
| of resumption. The business of the day would
| go on precisely as before. The country would


wake up on the morning of resumption day
| without being sensible of any shock-aS the


child comes down stairs ON the morning of its


fifth birthday, surprised that he is no larger OIL
| heavIer-as he expected to be-than he was


when he went to bed the night before.


Did He PrOpOsei