AGRICULTURE AND THE CURRENCY IN AMERICA.

Tuapeka Times, Volume XXV, Issue XXV, 9 August 1893, Page 3

AGRICULTURE AND THE CURRENCY IN AMERICA.

■ ■■■'■ • The connection between the currency question and the condition of agriculture in the United States is explained in the last report of the Royal Commission on Labor. A large party amongst American farmers, who are represented politically by the National Farmers' Alliance, are inclined to attribute their misfortunes to defects in the currency. They believe that the volume of money in the country is insufficient for the needs of the people, consequently they advocate the increased coinage of silver and the adoption of a bimetallic standard. In many cases their pecuniary difficulties date back to the period of depression, which succeeded the era of extravagant prices brought about by the war between the North and South. This depression was so prolonged and so universal as to produce a general conviction that the Resumption Act of 1875 had unduly contracted the currency. The result of this agitation was seen in the Act of 1878, which empowered the Treasury to purchase 2,000,000d0l worth of silver monthly, and to issue silver dollars and silver certificates. These last were at first only for large amounts, and were not direct legal tender. The banks refused to hold the silver, and paid all which they received into the Treasury in the form of Treasury dues ;' nevertheless, up to 1883 the new silver coinage circulated freely. The depression of 1884 checked this circulation, and a large amount of silver accumulated in the Treasury vaults, whilst the supply of gold, in which the Treasury was pledged to meet all claims, diminished so rapidly that the banks were obliged to come to the assistance of the Government. In 1886 a reaction set in, and silver again circulated more freely. According to the Act of 1890 the Treasury was empowered to buy 4,500,000 ounces of silver every month, or about twice the previous quantity, and to issue Treasury notes redeemable in either gold or silver, at the discretion of the Secretary. These notes were direct legal tender, and silver dollars were only to foe coined as required for the redemption of the notes. This time the banks did not object to receive the new currency ; but it circulated slowly owing to the commercial depression which prevailed at the end of- 1890. The farmers believe that the appreciation of gold presses hardly upon the debtor, and as very many of them have incurred obligations they seek I a remedy in the inflation of the silver currency and its elevation to a place beside gold as a monetary standard. But if the real causes of the existing agricultural depression are to be found, as the official reports suggest, in the extravagant liabilities incurred by farmers during their period of prosperity, in the increased production of other countries, in the too rapid movement West, and in the exhaustion of the soil by too extensive farming, an increased silver coinage would be productive of no real or lasting benefit. In the words of the Pennsylvania Bureau of Labor : " The mere fact of issuing an additional amount of money has no necessary connection with a new demand for commodities."