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as it ever has been. A majority, at least, of the people so regard it; but gold is at a premium of a hundred and forty per cent. We believe that the excess of the currency carries it to nearly this figure, and that the fluctuations above and below it are due to transient causes, the events of the war, and the heat of speculation.
Gold has steadily advanced through minorfluctuations since the breaking out of the rebellion, as the inflated currency has had time to develop its natural results. The entire history of paper money in France, in England, in our own Revolution, and in the present struggle, shows, as plainly as any one fact can be shown, that an unredeemable currency will become excessive in amount, and that excess will be followed by proportionate depreciation. The first, the pressing remedy for the evil, making way for every other remedy, is reduction. Most fortunate are we that this can be accomplished by us with no embarrassment of the government, its paper remaining in full circulation.
If all the commercial world were to accept gold and silver as the exclusive medium of exchange, though the measure might involve much inconvenience and considerable expense, these metals would at once, so to speak, develop value-power enough to accomplish perfectly all these exchanges. Gold might be thrown back in value by such an increased demand one hundred or two hundred years, but it would at once rise to a point that would enable it to accomplish the entire duty laid upon it. Gold does not come to the tasks assigned it with a settled, unchangeable value ; but the very tasks themselves, by the demand they create, impart to gold a value enabling it to meet them. Currency does not require so much bulk, but so much value, and this it can create in a very limited bulk, by its own fiat. Famine creates famine prices, and gold, unlike grain, with each rise of price, performs a wider duty.
The very fact that prices are now a hundred per cent. in advance of what they were two years ago, shows a great inflation of currency. To meet the larger nominal sums now employed in exchange, a much greater amount of currency is required, and the old currency would have failed to do it without a great rise in value, our increased business could not be carried on at the present scale of prices without perhaps thrice the amount of the old currency. Yet, in the order of cause and effect, the increased prices have sprung from the increased circulation, and not the circulation from the prices. It is one of the mischiefs of such a movement, that every step prepares for another, and seems to demand it, that apparent prosperity and pressure of exchange seek an increased medium. If, however, we wish to reduce prices, we must reverse the action of the cause, and effect them through the circulation.
Nor need this be done with any barshness or injustice towards the banks. It is not unjust to them to withdraw benefits they have long been permitted to enjoy; nor is it harsh if the method employed be such as to inflict no unnecessary losses, or to force a precipitate transfer of capital. A public exigency of great immediate moment and of lasting results, may rightly require some sacrifice of interest, some change of investments on the part of those who are 80 unfortunate as to stand in the way of the public good. A tax on the issue of banks, sufficient to absorb its profi's, yet not sufficient to compel an immediate and disastrous abandonment of the field, would lie at once in the line of revenue, and reach with due rapidity the more important end of opening to government the entire department of currency. It would then be at liberty, with complete control, to suit the amount and character of its issues to the wants of the nation. In other words, the nation would put a great national interest before private profits, and set itself to the most weighty of duties, that of providing a ' convenient, safe, staple currency.
The right to do this our government has reaffirmed in the action already taken. The constitutional question has been practically settled, and it becomes, therefore, not merely a duty, but an acknowledged and accepted duty, to complete the work undertaken, to sweep away all that is opposed to a good currency, and to establish all that it requires. Nothing can now excuse us from this labor, nor shall we really find any apology for any ignorance of its nature with so much in history and science to instruct us.
The firmness with which the opposition arising from private interest will be met, will be proportioned to our sense of the necessity of our action, and our certainty of the good results to flow from it. Were it not for the partial truths, the unsound and wavering opinions held by many on this subject, we should doubtless proceed at once cheerfully and thoroughly to the completion of our work in the entire control and reconstruction of the currency. Some points require to be dwelt on, not as abstruse in themselves,
but as imperfectly presented to the public mind, as overlooked or inadequately treated by high authorities.
Bank-notes, and all evidences of debt designed for circula- . tion in a currency, perform a very distinct office from other certificates of debt, and are subject to peculiar laws. Promissory notes, types of the ordinary form of expressing indebtedness, are not primarily designed to pass from hand to hand. They may rest with the first holder, or any holder, and perform for him an important service, without even the anticipation of further circulation. They may, indeed, be transferred in the adjustment of balances, and thus, in a very limited degree, take the place of currency, yet without coming under its peculiar laws. Circulation, on the other hand, is the primary end of a bank-bill. It is no mere record of indebtedness, resting with profit in the hands of him who holds it, and valuable according to the credit attaching to the promises of the bank. It is meant to express, retain, and convey a universal purchasing-power, and to be employed constantly in its transfer. It must, therefore, go into the market, or rather be constantly there, to perform its duties. If promissory notes were forced into a constant and general sale, it would be found that other considerations besides their capability of ultimate collection would come in to regulate their value. How many of these are in the market? how readily are they received every where ? how quickly and easily can they be cashed ?-would be enquiries quite to the point in settling their worth.
No note can be more reliable, or, so to speak, have more credit in them, than products possessed of permanent intrinsic value; yet these, as wheat, wool, iron, and even gold itself, are powerfully influenced, when actually in market seeking a sale, by demand and supply. We know how unfavorably it acts on the price of all commodities to be thrown without reserve upon the market. We might as well say that the exchange-value of a product is determined wholly by the product of the labor it contains, or rather expresses, without reference to the existing supply and demand, as to say that the value of paper money rests exclusively on credit, leaving out of consideration the amount of it in circulation. It will hardly be held that paper money is superior in stability to gold itself, yet by this supposition it ought to be, as the precious metals have steadily lost value from century to century as their amount has increased.
Let us remember that bank-notes must go to the market,
and there be sold and resold like any article containing value, though far more frequently, thus becoming in the very best degree subject to the law of supply and demand. Even when redeemable in gold and silver, they do not altogether escape this law, much less then, when unredeemable, capable of easy and indefinite multiplication ,
During the war with Napoleon, the Bank of England suspended specie payment. There followed a depreciation of its bills, passing at times as low as thirty per cent. This thirty per cent. was due not to a loss of credit, not to a feeling among Englishmen that the nation was shaken, and its permanent institutions liable to crumble, but to the multiplication of the certificates of debt beyond the demands of the currency. The public was assured that the general concerns of the bank were in the most affluent and flourishing situation, and such as to preclude every doubt as to the security of its notes. For a little time the notes at the bank remained at par, but the restraint of redemption being removed, the issue gradually increased, and the inevitable depreciation followed. The chief feature of the law passed July 19, 1844,“ was to limit the circulation, so that it would be regulated by the amount of coin and bullion in the vaults of the institution.” This law sprang from a clear recognition of the fact, that a currency cannot be stable with restraint on issues—that amount is an essential feature in a firm, safe system.
Apation may go triumphantly through a struggle, yet its paper currency at its close be left wholly worthless. It may even retain the power of loan, and therein the general element of credit, and yet the accumulated drift of its excessive issues remain as dead and hopeless as ever. Indeed, when a currency has become very much swollen, redemption seems at once hopeless and unjust. The government in issuing the paper has purchased with it, in produce, perhaps a tenth or twentieth of its nominal value, and, therefore, in fact incurred but a fraction of the nominal debt. Nor can such a currency as a currency be restored in value, however much trust may be reposed in the future ability and honesty of the state ; such bills will partially recover their worth by being treated simply as promissory notes, withdrawn from circulation, and retained for future redemp
All have united in admitting and admiring the convenience of paper money; also its economy, so far as by wise