Year: 1873

pended by an order 10 council, sud ha:
since been twice suspended. And
hazard nothing in affirming that the
ultimate basis OF the British credit
system is not gold or faith in the hon
est or judicious management OF the
bank, but is found in the knowledge
that the Government will, under any
circumstances and at any time, avert
the commission of the fact Of backrupt-
cy by the bank, by ordering it to violate
the restraints provided by law, and
issue notes enough to relieve not only
itself, but all who may offer good securI'
ties. The last exercise OF this power
was in 1866, and the next will, il | do
not gravely mistake the signs OF the
times, occur in time to shed light upon
the duty OF Congress in the present
emergency. This is the process bY
which England gives elasticity to her
currency and averts or mitigates finan-
cial crisis"


And lere the Judge brings in his
remedy-this much needed reserved
force-he says not for the present, but
Tor the future embarrassments Of the
country; a method by which their re-
currerce msy be prevented. We give
this remedy in his own words:


"As have said, our law is inflexible,
aud the power to suspend it at discre-
tion cannot and should not be impaired
to the Executive, aud yet there must
be somewhere a reserve OF legal-teuder
notes equivalent in their paying power
to those Of the Bank OF EOgland, which
NAV be brought into circulation on ex
traordinary occasions aud returned
when these occasions have passed.
This is essential to the steadiness and
lite OF business. Nor is the necessity
for such a reserve peculiar to countries
whose currency is in part or in whole
OF paper. This ia shown by the Crisis
in Ham Durg and the embarrassment OF
the Bank OF Hamburg when the cur
rencv was purely metal;c. Ricardo
Save:


non extraordinary occasions a geues
raj panic may seize the country, when
everyone becomes desirOus OF possessing
himself OF the precious metals as the
most convenient mode OF realizing or
concealing his property. Against such
panics banks have no security on any
system


The fret and main question for
Congress to consider will, in my judg-
meDt, be, Can we safely create such a
reserve OF money, and enable the people
10 command it when in their judgment
the exigencres of the case require its
use ? Ny reply to this question is that
we can and should do 1t, and in such q
manner as to reduce the average rate Of
interest; to recall from abroad and eX
tingursh many OF our six per cent gold
boDda; TO reduce the Governments IN
terest account, srd by diminishing the
demand OF the Government for gold TO
pay interest on its bonds, reduce the
premium thereon, and dim uish the
difference between gold and our paper
money.


Thee advantages, | believe, may
all be attained by the issue OF bonds
for S2j and mutiples thereof, bearing
3 g. per cent interest, payable, prlnci-
pal and interest, in lawful money, and
tor such money at the
will Of the holder


tine mouey received for such bonds
should be closely applied to the pnr-
chase Ol six per cent gold-bearlng
bonds To prevent the embarrassment
OF the Treasury Ly q sudden and uDusu.
al call for Il conversion 3 CT convert
bles a spcc.& issue OF greenbacks, TO he
known ~ the redemption iuRd. should
be prepared and held for their redemp-
ton and tor no other purpose. This fund
would raT,'y, and it may be would
never be drawn upon, but it should be
known 10 eAist-and when drawn upon
should be IYlIy reimbursed by the de-
posit OF the frat moneys received for
this series OF bonds after the excitement
which had caused the withdraw had
passed. This would produce no general
iuhation OF currency, but would prevent
speculation by preventing the accumu'
latiou OF corporate and Individual
balances at q few money-Centres while
the canals are closed and while mstur"
ing crops are not ready 10 be moved. 1t
would also give fexibllity to our cur
rency and prevent such panics as that
which ia row turninr Our boundleEs