Such provisions would not only give the greater part of them the means of resumption, but very large amounts in addition. It is also assumed that the whole amount of circulation, including deposits outstanding upon resumption, will not exceed $800,000,000; requiring reserves of say $200,000,000, of which one half will be held by the United States Bank. As already remarked, the convertible currency of the Banks, as it comes into circulation, will for a considerable time be largely supplemented by the government notes, which, being still legal tender in the discharge of outstanding contracts, will go out of circulation only as such contracts are run off. The rapidity with which the notes are funded will depend largely upon that with which the new convertible money will come into circulation: the removal of all apprehension on the score of the lack of circulation will go far toward carrying the country in safety from one system to the other. But to resume upon any thing like an adequate basis for the whole country, vastly more is required than what appears to be ample reserves for the Banks. There is the same reason why the public consumers of merchandise - should hold reserves in coin as that Banks should. The latter are little more than instruments arising out of production and distribution. Should their reserves prove inadequate, or be too largely drawn upon, as in case of a heavy export demand, they must strengthen themselves by drawing coin from the public, whose excessive expenditures have been the cause of the export. They may have no other mode of strengthening themselves, and at the same time of checking a prevailing extravagance, but by compelling the public to pay their bills in coin, which they can do by ceasing to make loans. As their issues, by means of which their bills were ordinarily paid, ceased, the latter would, in part at least, have to be paid in coin. Banks are never in a secure position, unless they have a large fund to draw upon other than that in their vaults. The public are never in a safe condition unless such fund exists, which is to make good, on their part, any deficit of products, the ordinary subjects of consumption. A perfect equilibrium between production and consumption is impossible. Balances will be constantly arising to be discharged in coin, for which Banks should not be called upon, or, if called upon, should be able to reimburse themselves from those against whom, from extravagance, or want of production, they were found. resume with safety, an amount of coin, chiefly gold, should be in the hands of the public equal to that in the hands of the Bank, or, say, $400,000,000 in all. With the means that will come into the possession of the Banks, and with the products of our industries, the necessary amount of coin for resumption could be provided with all the dispatch consistent with our highest welfare: for it should be our aim to resume without causing any disturbance in those countries which are the great consumers of our products, which, and not our public securities, should supply the means. When our people move, the danger will be that they will move with too great, instead of with too little emphasis. The haste should be in adopting a competent method. The moment it is entered upon, there will be no complaint that it is not sufficiently rapid. It is far better to take time, to proceed slowly and methodically; to rest occasionally on what is achieved, than to run the risk, by inconsiderate haste, of losing all. Cambridge: Press of John Wilson & Son. |