Paper Money with a Fixed Limit.

The era of paper money on which we then entered has one peculiar feature, unprecedented, so far as I have been able to learn, in the history of paper money. Our paper money is redundant, but fixed in amount. The greenbacks stood, when Mr. McCulloch's contraction was arrested, at 356,000,000. The bank-notes were fixed at 300,000,000, but subsequently, July, 1870, 54,000,000 more were authorized. The fractional currency was fixed at 50,000,000. The bank-notes have never quite reached 350,000,000, and the fractional has never reached its limit. The withdrawal of the three-percent. compound interest notes, which had been held as bank reserves, operated as a contraction, but the allowance to the country banks to keep ⅗ of their reserves in the redemption cities operated as expansion. Allowing for these variations, the limit of legal currency was fixed, until the Fall of 1873, at 750,000,000. Nearly every nation which has ever used paper money has fixed its amount, and set limits which it has solemnly promised again and again not to pass, but such promises are vain. The intention, when they are made, is honest, but it is impossible to keep them. A man might as well jump off a precipice intending to stop half way down. It remains to be seen whether we too, when the redundancy is absorbed by high prices and excessive credit, will break over the limit, as every other nation has done, under the inevitable constraint which it then imposes,—but the phenomena thus far, are those of a redundant paper with a fixed limit.