This ebb occurred both in England and
France at the same time, proving that cash reserves do not increase to
the detriment of each other; it is a flood of specie or of bar-gold
rendered easily available, through the conclusion of the decline of
prices and the slackening of business, extending to the whole world, and
in which each one partakes in proportion to its wealth, and above all in
proportion to its credit circulation, and of the perfection of the
settlements by means of clearing houses.
This regular course in the metallic reserves is no longer to be noted in
the circulation of bank notes; instead of increasing and of entering its
exchanges during the return of specie into the coffers of the banks,
they again took part in the paper-money reserves. From $323,000,000 in
1882 we see the circulation of bank notes decrease each year little by
little until it is reduced to $151,000,000 in 1888; and this remarkable
fact confronts us in the face of an unheard of expansion of business,
almost 50 per cent. greater than in 1873; and of a twofold simultaneous
reappearance of $84,000,000 specie and of $172,000,000 bank notes. What
then is the role of specie and of bank notes in the course of business
in the United States? Much inferior to that which it plays in Europe in
the absence of the machinery of a clearing house embracing the whole
country, instead of being limited to some large cities.
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