Year: 1876

for payment, would have five hundred
millions of specie funds to pay 2sO mil
lions of notes, without contracting their
loans 10 their customers or calling on
any private director for payment. Sus-
pended banks undertaking TO resume
have usually been obliged to collect from
needy borrowers means to redeem their
excessive issue and tn provide reserves.
A vague idea of distr' IS is therefore often
associated with the process OF resump-
ton. but the conditions which caused
distress in former instances do not exist.
The government has only to make good
It's own promises and the banks can take
care of themselves without distressing
anybody. The government is therefore
the sole delinquent. The amount OF
legal tender notes of the United States
now outstanding is less than 300 million
of dollars besides "a million of fractional
currency. How shall the government
make there notes at all times as good as
specie 1t has 20 provide in reference
to the mass which would be kept IN use
by the wants of business central re-
serve Of coin adequate to the adjustment
of temporary fluctuations OF interna'
tional balances and rs guarantee against
transient loans artiticially created by
panic or by speculation. 1t has also to
provide for the payment in coin, OF such
fractional currency AS may be presented
tor redemption, and such inconsiderable
portions of legal tenders as individuals
may from time to time desire to convert
Tor specie use or IN order to lay by in
coin their little stores of money. To
make the coin now in the treasury avail
able for the obje,t OF this reserve, to
gradually strengthen and enlarge that
reserve and to provide for such
other exceptional demand for coin as may
arise, does not seem to be work of diff
Guilty il wisely planned and pursued.
1t ought not to cost any sacrifice to the
business of the country; il should, on
the contrary, revive hope and confidence
The coin in the treasury on the 3Oth of
June, including what is held against coin
certificates, amounted to nearly 81, ,0O0,-
600. The current of precious metals
which has flown out of our country for
II years, from July 1st, 1885, to June 80,
1875, averaging nearly $76.000,00O a
year, was $4,000, 900 in the whole pc.
riod, of which $617,O0O,OOO were the
product of our own mines. To match
the requisite quantity by intercepting
from the current flowing out Of the coun-
try, and by acquiring from stocks which
exist abroad without disturbing the
equilibrium Of the money market is a re-
suit to be easily worked by practical
knowledge and Judgment. With respect
to whatever surplus of legal tenders the
wants of business may tail to keep in the
United States, and which, in order to
save interest, will be retained for redemp-
tion, they can either I've paid or they can
be funded. Whether they continue as
currency or be absorbed into vast mass
of securities held as investments, Is
merely question of the rate of interest
they draw. Even if they were to remain
in their present form and the government
agreed to pay on them rate of interest,"
making them desirable investment, they
would cease to circulate, and take their
place with governments, state, municipal
anil other corporate and private bonds,
of which a thousand millions exist
among us. In the perfect ease with
which they can be changed from cur,
rency into investments lies the only dam
ger to be guarded against in the adop'
ton Of general measures intended to re-
move clearly ascertsined surplus that
is withdrawn from any which ore not a
permanent excess beyond the wants Of
business. Even more mischief would
result from any measures which affected
the public Imagination with the fear OF
an apprehended scarcity. In a com
munity where credit ia SO much used to
fluctuations Of values the vicissitudes in
business ale largely caused by the tenn
porary beliefs Of men, even before their
beliefs can be confirmed to ascertained