Year: 1873

sources of the country would abund-
antly Justify it. The resources have
materially fallen off for the last five
months Of the present fiscal year from
what they were expected to produce,
owing to


THE GENERAL PANIC


now prevailing, which commenced about
the middle of September last. The
full effect of this disaster, if it should
not prove to be blessing in disguise,
is yet to be demonstrated. In either
event it is your duty to heed the lesson,
and provide by wise and well considered
legislation, as far as it lies in your
power, against its recurrence, and to
take advantage of all the benefits that
may have accrued. My own Judgment
is that however much individuals may
have suffered, one long step has been
taken toward specie payments that we
can never have permanent prosperity
until an entire basis is reached, and
that a specie basis cannot be reached
and maintained until our exports lex
elusive of gold) pay for our imports,
our interest due abroad, and other
specie obligations, so heavy as to leave
an apprecable accumulation of the
precious metals in the country from the
products of our mines. The develop
ment of the mines of precious metals
during the past year, and the prospec-
tive development of them for years to
come, are gratifying in their results.
Could but one-half of the gold extracted
from the mines be retained at home,
our advance toward specie payment
would be rapid 70 increase our eX-
potts sufficient currency is required to
keep all the industries of the country
employed. Without this, national as
well as individual bankruptcy must en-
sue. Undue initiation, on the other
hand, while it might give temporary
relief, would only lead to an initiation
of prices, the impossibility of compet-
ing in our markets for the products of
home skill and labor and repeated re-
newals of present experiences. Elasti-
city of our circulating medium, there
fore, and just enough of it to transact
the legitimate business of the country
and keep all industries employed, is
what is most desired. The fact is,
specie is the recognized medium of cx-
change the world over. That obtained,
we shall have a currency of such de-
gree of elasticity. If there be too
much of it for the legitimate purposes
of trade and commerce, it will flow out
of the country; if too little, the reverse
will result. To hold what we have and
to appreciate our currency to that
standard is the


PROBLEM


deserving of the most serious consid-
Grafton OF congress. The experience of
the present panic has proven that the
currency Of the country, based as itisup.
on the credit of the country, is the best
that has ever been devised. Usually il
times of such trials the currency has
become worthless or so much depressed
in value as to initiate the values of all
| the necessaries of life as compared with
the currency. Every one holding it has
been anxious to dispose of them on any
terms. Now, we witness the reverse
The holders of currency heard it al
they did gold in former experiences o
a like nature. II is patent to the mos
|
cy or money is required to transact thu
legitimate trade of the country during
the fall and winter months when the
vast crops are being removed than dur
ing the balance of the year. With the
present system, the amount in the coun
try remains the some throughout the
entire year, and results in an accumula
ton of all the surplus of the country
in few centres when not employed IL
the moving of crops, tempted there by
the offer of interest on call loans. In
terest being paid, this surplus capita
must earn this interest paid with pro
fit. Being subject to call, it cannot b'
loaned only in part at least to the mer
chant or manufacturer, for fixed loan
Hence, no matter how much currenc,
there might be in the country it woul(
be absorbed, prices keeping pace will
the volume, and panics of stringenc,
and disaster would ever recurring witt
the autumn Elasticity in our none
system, therefore, is the object to b
obtained first, and next to that, as ia
as possible, prevention of its use i
stock and other species of speculation
To prevent the latter it seems to m
that one great step would be taken by
PROHIBITING TIE NATIONAL BANKS
from paying interest on deposits, by ri
quiring them to hold their reserves i
their own vaults, and by forcing thel
into resumption, though it would b
only in legal tender notes. For thi
purpose / would suggest the establish
ment of Il clearing house for your col
sideration.


TO SECURE ELASTICITY.


To secure the former many plan
have been suggested most, if not all c
which, look to me like imitation on til
, one hand or compelling the governmer
, on the other to pay interest without col
responding benefits upon the snrplu
, funds of the country during the season
when otherwise unemployed. | subm


for your consideration whether thi
+ difficulty might not be overcome b
authorizing the secretary of the treasr
, ry to issue at one time to the nations
+ banks of issue any amount of the


notes below fixed per centage of the
issue, say forty per cent. upon th
banks depositing with the treasurer {
, the United States an amount of govern
!, ment bonds equal to the amount of note
> demanded, the banks to forfeit to th
government say four per cent. on th
, interest ACQUIRING on the bonds 8
i pledged, during the time they renal


with the treasury, as security for til
! increase of circulation the bonds S
! pledged to be redeemable by the bank
, at their pleasure, either in whole or i
, part, by returning their own bills fc
cancellation to an amount equpl to th


face of the bonds withdrawn. woul


further suggest for your consideratio


the propriety of authorizing the M
tional banks to diminish their standin


issue at pleasure, by returning for car
: collation. their own bills, withdrawn


SO many United States bonds as al