The Late Commercial Crisis [pp. 100-126]

THE LATE COIMEt-CIiAL CRISIS.
It will be seen that, in our view, a movement towaids the
"earliest practicable" recldemnption of our Treasury notes in coin,
according to the promise the nation makes on their face, and
the interpretation solemnly given to that promise by our National
Congress, is the first great measure tending to the correction of
our disordered financial condition. On it the enduring efficacy
of all other measures of relief and correction depends. Economically, as well as morally, everything hinges on the nation's
keeping its own faith.
One great requisite demanded is a due elasticity in the supply
of currency already adverted to, so that it may contract or expandl itself with the varying exigencies of commerce.
This need varies with the amount of exchanges to be effected,
with the rapidity of its circulation, and especially with the extent to which bank-checks and other devices perform its functions. And the difference in this latter respect between times
of panic and confidence is so vast, that no supposable variation
in the money-supply can fill the hiatus occasioned by such
panic, unless it comes in season to avert it. The only substantial cause of such fluctuations is the recurrence of transactions
in unusual amount, in which no private cheeks or mnoney-orders,
of any sort, can perform the office of money. This occurs every
autumn in this country, in purchasing the grain of the West and(
the cotton of the South from the agriculturists who produce
them, for movement to their points of distribution and consumption, whether at home or abroad. For purchase of farmers,
checks will not answer, as their value depends on the credit of
persons unknown to them. They require what has the known
and unquestioned character of, and will everywhere be accepted
as, money. Hence the annually recurring autumnal demand for
" currency to move the crops." This demand increases with the
great increase of the crops so to be moved. It has also vastly
increased in the South since the abolition of slavery. Under the
old regime, the great planters usually kept accounts with banks
or bankers in the great marts which purchased and sold their
cotton. They were paid in checks, which they deposited, and
against which they drew their own checks in payment for sup plies purchased for themselves, their slaves and plantations.
Now this has very much changed. The planting is usually on at
118
[January,