Democratic Sentinel, Volume 2, Number 13, Rensselaer, Jasper County, 10 May 1878 — National Banks and Gold Resumption. [ARTICLE]

National Banks and Gold Resumption.

A few national banks have resumed gold payments on their notes with a flourish of trumpets. This is simply a piece of brag. The notes of the banks are so scattered through the country that to pick up those of any one of them would not pay expenses, unless there were an unusual demand for gold. The treasury is the real redemption agency of the banks. In case of resumption, the banks must redeem in greenbacks or gold. When the demand for gold for exportation arises, as it certainly will when the proper money of the country ceases to be hoarded and gold and silver are added to the entire mass of circulation, then the treasury must respond to such demand or suspend. There is no comparison as between a bank (unless it is a central national bank like that of England or France) and the treasury, as respects the demand for gold. The demand for gold on a local bank may depend on its credit, and thus be purely sentimental. The demand on the treasury, on the contrary, is always a commercial demand, except m case of war or a. general collapse of credit. When the entire mass of circulation in the country is unduly expanded, the value of the whole as compared with other property, is cheapened, the gold part a? well as the paper part, fhis

makes money, the country over, plenty and cheap, and all other property dear. This of course, makes the market of such country the best for the foreigner. He brings kis goods here because they fetch more here than elsewhere. But when he comes to consider what he shall take in return for them, he finds it to his interest to take that property which is the cheapest nere, but the dearest abroad. This property is, of course, money. But the paper part of our money he cannot take. It will not pass abroad. Consequently he takes the gold part, which is equivalent. This is the drain which our treasury has to meet. And at times it lias become so intense that there is no instance in the history of paper money in which a Government has been able to sustain specie payments for any length of time. Nor is it alone the amount of Government and bank paper afloat which onuses this drain on the treasury. When private and corporate credit revives, every bond, note, draft, check, bill of exchange, and all such means of exchanging property are actually and truly so much added to the circulating medium. The effect of such addition is to cheapen the entire mass of money in the country, paper as well as specie, and cause the latter to be exported in exchange for goods, which goods are made nominally dearer here than in any other country. For these reasons we maintain that specie resumption is an experiment, and that there is no instance in the history of the world in which specie resumption by a Government has been successful for any length of time. —Chicago Daily News.