Year: 1876

to June 30th, 1876, averaging nearly seventy six millions year

 was S32 millions, in the whole

 period of which SIT millions were

 the product of our own mines. l To amass the requisite quantity

 by interccpting from tie current 1 flowing out of the country, and by

 acquiring from stocks which ex- j ist abroad, with

 out disturbing the equilibrium

 of foreign money markets, is re

 suit to be easily worked out by

 practical knowledge and judg

 ment, with respect to whatever

 surplus of legal tenders the wants

 of business may fail to keep in

 use, and which, in order to save

 the interest, will be returned for

 redemption. They can either be

 paid or they can be funded.

 Whether they continue as curren- cy or be absorbed into the vast

 mass of securities held by invest

 ments is merely question of the

 rate of interest they draw. Even

 if they were to remain in thelr present form and the Government

 were to agree to pay on them a rate of interest making them de sirablc as investments, they would cease to circulate and tax e their place with Governnicnt, State, municipal and other cor porate and private bonds of which thousands ofmillions exist among us. In the perfect ease with which they can be changed from currency into investments lies the only danger to be guarded against in the adoption of general meas

 ures inten ed to remove or clear ly ascertain the SUI plus-that the withdrawal of any which are not a permanent excess beyond the wants of business. Even more mischieyous would be any meas ure which affects the public i'm agination with the fear of an ap

 prehended scarcity. In a com munity where credit is so much used fluctuations of values and vicissitudcs in business are large 1 ly caused by the temporary be- licfs of men even before these beliefs can conform to ;lsccrtaincd realities.

 r FLUCTUATIONS OF THE CURRENCY. The amount of necessary cur rcncy at given time cannot be determined arbitrarily, and it 1 should not be assumed or conjec- tured that the amount is subject ed to both permanent and tempo rary changes. An enlargement of it, which seemed to durable, happened at the beginning of the civil war by substituted use of currency in place of individual credits. 1t varies with certain states of business. It huctuates with considerable regularity at i different seasons of the year. In autumn, for instance, when buy CTS of gram and other agricultur- al products begin their operations, they usually need to borrow cap ital on circulating credits, by which to make their purchases, and they want these funds ill a currency capable of being dis triputed in small sums among the numerous sellers. Tic addition al need of currency at such times is five or more per cent. of the whole volume, and if a surplus of what is required for ordinary use does not happen to be on hand at the money centcrs, q scarcity of of currency cnsues and also a stringency in the loan market. It was in reference to such expcri- enccs that, in . discussion of this subject in my annual mes sage to the New York Legislature of January ,, 1875; the sugges- ton was made that the Federal Government is bound to redeem every portion of it's issues which the public do not wish to use. Having assumed to monopolize the use of tho currency and en- acted exclusions asainst every body else, it is bound to furnish all which the wants Of business require. The system should pas sively allow the volume of circu lating credits to cbb and flow ac- cording to tho ever changing | wants of business. IL should mi tlate as closely as possible the | natural laws of trade, which it has superseded by artificial con triyaaces; and Tn similar discus sion in my messages of January I, 1876, it was said that rcsump tion should be effected by such measures as would keep the az gregate amount of the currency seli-adjqsting during all the proc ess witiioht creating at any time an artificial scarcity, without cX- citing public imagination with alarms which impair confidence aud distract the whole machinery of credit, and disturb the natural operations of the business public. Economy hy official retrenclirhents and wise finance are the means which the St. Louis convention indicates as provision for reserves and rotlpmDtian Tho hest ro