We have shown, from the reason of the case, that a mixed currency is not governed by the laws of value; and that therefore its variations are controlled by other principles, which give no guaranty to the public good, but, on the contrary, threaten great mischief to the community, both by expansion and contraction.

* This is within the personal knowledge of the writer as a bank director.

We now propose to show, by facts taken from official statistics, that such fluctuations are frequent and violent.

We introduce a diagram, carefully prepared, for the purpose of showing, in the most compact and striking form, these fluctuations of the currency, both in quantity and quality.

The following table exhibits the fluctuations in the absolute quantity of the mixed currency (circulation and deposit) of the United States from 1834 to 1859 inclusive, a period of twenty-six years.

 

Table I.

 

1834 . .

. . 170,000,000

1847 . .

. . 197,000,000

1835 . .

. . 186,000,000

1848 . .

. . 231,000,000

1836 . .

. . 255,000,000

1849 . .

. . 205,000,000

1837 . .

. 276,000,000

1850 . .

. 240,000,000

1838 . .

. . 200,000,000

1851 . .

. . 284,000,000

1839 . .

. . 225,000,000

1852 . . .

. 328,000,000

1840 . .

. . 182,000,000

1853 . .

. 348,000,000

1841 . .

. . 172,000,000

1854 . . .

. 392,000,000

1842 . .

. 146,000,000

1855 . . .

. 377,000,000

1843 . .

. . 114,000,000

1856 . .

. . 408,000,000

1844 . .

. 159,000,000

1857 . .

. . 445,000,000

1845 . .

. 177,000,000

1858 . .

. 341,000,000

1846 . . .

. 202,000,000

1859 . . .

. 452,000,000

These facts are collected, as nearly as possible, from the returns made at the beginning of the years mentioned. Therefore the contractions or expansions made during a year do not appear till the return of the next year. For example, the great contractions of 1837 and 1857, beginning several months after January, do not exhibit their effects till the currency returns of the years 1838 and 1858.

Diagram No. 4 exhibits the fluctuations in the currency (circulation and deposits), and also the proportion of specie, from 1834 to 1859 inclusive, both reckoned per capita.

The upper line indicates the currency, the lower the specie, and show the fluctuations of both.

In the last diagram, we see distinctly the actual fluctuations in the currency, because its amount, at the several periods, is reckoned per capita. This is a far more correct mode of getting at the real changes than taking the absolute quantity.

The diagram is prepared from a table published by the Massachusetts Bank Commissioners, in their Report of 1861, furnished by J. V. Yatman, Esq., of New York, to whom the public are indebted for valuable contributions of a statistical character.

The upper line shows the fluctuations in the quantity of the currency: the lower line indicates its quality from time to time.

The following table shows the extreme fluctuations in the quantity of the currency of the United States per capita, at different times, with the corresponding variations per cent in its quality: —

Table II., showing the Extreme Fluctuations in the Currency of the United States per Capita at different Times, with the Corresponding Variations in its Quality, or the Proportion of Specie held for its Redemption.

Years.

Currency per capita.

Fluctuations.

Per cent.

Quality, or specie to circulation.

Variations in quality.

Per cent.

1834

11.82

   

154 to 100

 

.

*1837

17.61

Expansion

50

13 to 100

Depreciation

11

1840

10.70

Contraction

39

18 to 100

Improvement

33

1843

6.18

 

42

29 to 100

 

61

1846

9.94

Expansion

61

21 to 100

Depreciation

36

1849

9 18

Contraction

7

21 to 100

Stationary

0

1852

13.31

Expansion

45

15 to 100

Depreciation

27

1855

13.93

 

13

14 to 100

 

10

1857

15.50

 

11

13 to 100

 

7

1858

11.55

Contraction

26

22 to 100

Improvement

73

1859

14.90

Expansion

23

23 to 100

,,

2

* Years when the banks suspended. Observe the great expansion between the years 1834 and 1837 of some fifty per cent; and between 1849 and 1857 of some seventy per cent.

Table III. — The following Table exhibits the Composition of the Mixed Currencies of the several States of the Union, Jan. 1,1860; that is, the Percentage of Specie to the Circulation and Deposits in the Currency of each State: —

But there are variations, not only in the general currency of the United States, such as we have indicated, but also in the currency of each State, at different periods.

We take that of Massachusetts, in illustration: —

Table IV., exhibiting the Quality of the Currency of Massachusetts.

Tear......

1835.

1837.

1840.

1843.

1851.

1857.

1859.

1860.

Specie, per cent . .

7.1

8

18 3/4

44.1

7.5

8.9

14.6

15.1

From this it appears that the highest proportion of specie was in 1843, which year marked the termination of the great monetary convulsion that commenced with the failure of the banks in 1837, at which date the banks of Massachusetts had but eight per cent, as shown above. The severe pressure began in 1836, when the specie was seven.

By a law of that Commonwealth, passed in 1858, the banks are required to keep at least fifteen per cent of specie. This law has much increased the average amount of specie.

 

Per cent.

 

Per cent.

 

Per cent.

Louisiana ....

38.6

Pennsylvania . .

21.3

Delaware ....

9.9

Missouri ....

37.

Iowa

20.

New Jersey . . .

8.9

Georgia ....

23.7

Virginia ....

16 7

Connecticut . . .

7.5

Kentucky ....

23.4

New York . . .

15.6

Rhode Island . .

6.3

Tennessee....

23.

South Carolina. .

Ohio.....

15.5

New Hampshire . Wisconsin . . .

5.7

North Carolina . .

22 08

Ohio

15.2

 

5.5

Indiana ....

22.3

Massachusetts . .

15.1

Vermont ....

4.2

Alabama ....

22.2

Florida ....

10.5

Michigan ....

4.

Maryland ....

21.4

Maine

10.

Illinois ....

2.3

Another fact may be noticed in this connection; viz., that the banks of Massachusetts were, to a considerable extent, responsible for all the mixed-currency circulation in New England, because the banks of the neighboring States had all their bills redeemed in Boston. Those of Vermont, for example, whose average specie is only four or five per cent, kept bank balances (not actual specie, as often supposed) with certain banks which were under obligations to redeem all their bills as fast as presented. This, of course, greatly enhanced the responsibilities of the Massachusetts banks, and decreased the strength of their currency.

The currency of New England was thus made a complete unit. The system of redemption, first established by the Suffolk Bank of Boston about forty years ago, was so perfected, that, while the banks of each State might act independently, they were bound together by a common tie, and involved in a common fate. This was known as the " Suffolk-Bank system."

Volumes of statistics might be given of the same general character; but these, it is presumed, are sufficient to show the fluctuating character of the mixed currency of the United States, both in quantity and quality; and of course, in degree, of all other countries where such a currency exists: for it is, at all times and everywhere, the same in its general characteristics. The quality may and does vary greatly in different communities, as we have seen it in the different States of the American Union. But this is merely a question of degree.