Jasper Republican, Volume 1, Number 52, Rensselaer, Jasper County, 10 September 1875 — The Demand for More Currency. [ARTICLE]

The Demand for More Currency.

One of the meet popular fallacies of the day is that the stagnation in business is owing to a lack of sufficient currency. Every man who finds it difficult to borrow money for speculative purposes without security; every retail dealer who observes a tendency among his customers to buy sparingly and cheaply; every real estate holder who cannot sell property to-day at an advance over the price he gave for it before the panic—each and every one of th immediately jumps at the conclusion that there isn’t money enough in circulation, and traces all his woes to that cause. In spite of repeated demonstration it is the most difficult thing, apparently, for people to comprehend that inflation leads to commercial panics, and panics to the stringency which is felt for years after. Yet this has been demonstrated within the iast three" Jeafs in three different countries—Engiandf, Germany and the United States. In the United States the panic of 1873 came from the inflation of a paper currency with corresponding inflation in prices and speculation. In Germany there was an inflation of specie, resulting from the enormous war fine paid by France, and it brought financial disturbance with it In En eland there has been an mflar tion of capital which betrayed the peopto into unprofitable investments, and a panic was recently averted mainly by the solidity and limitation of the currency. If an inflation of real money may produce financial disturbance and commercial disaster, how much more the inflation oi worthless initation money! . One of the clearest and most intelligible answers to the assertion that there is not sufficient currency in this country to transact its business is the fact that the actual circulation per capita is much larger than in Great Britain, where the Actual capital, wealth and production are perhaps three times as great. Mr. George Walker, of Massachusetts, made an estimate of the comparative circulation in France, Great Britain and America in 1868, which is the latest trustworthy data we have on the subject. There has been a considerable inflation in France since that lime growing out of the war with Germany, but not in Great Britain, The circulation of the United States in banknotes, legal-tenders and fractional cur- . rency is, according to the last Treasury statement, as follows: Legal-tender notes v ’SS {fractional notes National Bank notes .............. 848,937,989 T0ta1...., $784,906,817 This is a paper circulation on a population of 40,000,000 of $19.12 per capita. The total note circulation of Great Britain, according to Mr. Walker’s estimate, is $196,170,620, or $6.54 per capita, and that of France in 1868 was $251,782,750, or $6.63 per capita- Thus it will be seen that the paper circulation of the United States is three times larger than the standard paper circulation of Great Britain or France. If we add in the circuiting Chin of Great Britain, which is estimated at $400,000,000, it gives a total circulation of $15.50 per capita in that country. Adding the coin in the United States, which is about $150,000,000, it fives a total circulation in this country of 24.05 per capita, or about one-third more than the circulation per capita in Great Britain, notwithstanding the latter has more than double the capital and business, and should, according to the popular superstition, have #ore than double the circulation for the transaction of its business. The difference between the circulating medium of France and the United States is not so great, but the reason of this is readily explained. France has a total coin and paper circulation, after deducting the amount of specie in bank vaults, of $18.34 per capita, and including the specie permanently locked up and kept in banks as security of $25.05, or about the same as ours. But one reason why France has and requires so large a proportion of circulating money is on account of the national tendency of the French people to hoard money. The French people have not yet attained the high business civilization of savings banks. Every dollar deposited in bank virtually increases the circulating medium of the country. Thus we showed by a recent table, which we reproduce below, that, though the total circiilating medium of this country is less than $800,000,000, there are really about $2,462,834,117 in practical circulation through the medium of bank loans. We have estimated these asTollows: Ho. of moneylenders. Amount of loan. 8,867,285 depositors in savings banks.sl,ooo.ooo,ooo 100,000 stockholders in savings banks 190,000,000 100,000 depositors in State and private banks 150,000,000 50,000 stockholders in State and private banks 50.000.000 670,000 depositors in National Banks 669,068,990 250,000 stockholders in National Banks..'. 493,765,121 4,027,285 depositors and stockholders owning, $2,462,834,117 The necessity ot France for a larger proportionate circulation than that of Great Britain, is mainly owing to the fact that the mechanics, farmers and laborers of the country do not deposit their savings, but hoard their gold Napoleons and silver francs. They put their money away in old stockings, or tuck it in between mattresses, or bury it in the ground, till it comes out in some accumulation for investment. The French, in this respect, cling to the primitive practices of India and China, where gold and silver actually disappear in enormous quantities. In this manner millions of dollars are practically withdrawn from active circulation in France. Yet notwithstanding this custom, and the fact that the business and capital of France are largely in excess—perhaps nearly double—those of the United States, where the circulating medium is more than doubled by its constant use, the amount of currency per capita in France is about the same as in the United States. The fact is that the persons who talk about a deficiency of currency utterly ignore the progress of business through the extraordinary facilities furnished by the banking system. Deposits, checks and clearing-houses in the city, and drafts, bills of exchange, and even the use of the telegraph for intercommunication between different cities and different countries, are agencies which have largely supplanted the use of money as a-circulating medium and have reduced its bulk in proportion to population and business. In England, where trade has advanced to the highest condition of success and stability, the amount of what we calltke circulating medium is the smallest in proportion, both to the population and the amount of business transacted. The demand for more currency in this country as a relief to business is ridiculous in view of the fact that not only are the resources of hank exchanges far from being exhausted, but oven the circulating medium in bank-notes lies unused in the bank-vaults. The demand is abnormal simply because the money is fictitious; and the greater the quantity of the latter the more morbid will the demand become.— Chicago Tribuns. A kan in New London made an accidental discovery of a cure for the potatorot He had a field of potatoes nearly an acre in extent, all decaying, apparently. The vines were withered and turned black. He resolved to pull the worst of the vines in part of the rows, leaving the potatoes in the hills. A month later he dug the crop and foond the product of the rows which he pulled to be nearly double those left In their former condition (». p., those whose vines were not disturbed). Spirits over proof—Printers* derils.— Ppush.- ■ *