more than twice the amounts furnished by these resources, and we are compelled to resort to the Treasury notes to supply the deficiency. It becomes, then, a most important whether the issue of such notes can be continued, and if it can, then to what extent? In a former report it was shown that the circulation of the Confederate States before the war might be estimated at $100,000,000. In the existing state of things it is probable that a larger amount of currency is required. In time of peace money passes rapidly from hand to hand, and the same money in a single day will discharge many obligations. A large portion, too, of the operations of business are performed by bills of exchange and bank checks. In the present stagnation of commerce and intercourse larger amounts of ready money are kept on hand by each individual and the Confederate Treasury notes and call certificates are used as a substitute for bills and drafts to a considerable extent. If this view be just we may venture to add as much as 50 per cent. to the usual amounts of currency, and this would raise the sum total at which it might stand to $150,000,000. The difference between this sum and the actual circulation will show the redundancy. The actual circulation embraces not only Treasury notes, but bank notes and State emissions of Treasury notes. In ordinary times coin would also form a part, but at present not only the coin but a large portion of the bank notes have been withdrawn from circulation.
The issue of Treasury notes on the last day of December amounted to $290,149,692, exclusive of interest-bearing notes. By adding to this sum a sufficient amount to cover the State treasury notes and the bank notes in circulation we can arrive at the sum total of the currency; $20,000,000 added to the Treasury notes would probably represent the whole. It is this aggregate which must be kept in view when we deal with the currency as a measure of values. It is the whole mass as it is accepted by the community in exchange for its various commodities which by its proportional relation to those commodities determines their prices. By a law as invariable as any law of physical nature these prices rise or fall with the actual volume of the whole currency. Neither skill nor power can vary the result. It is in fact a relation subsisting between two numbers, the one representing the total values of property and the other the total circulating medium. The nature of that medium cannot change it. It would exist with a currency of gold with as much certainly as with one of paper, if the gold were kept within the country by restraints equal to those which retain the paper. Assuming, then, entire confidence exists in our currency, the mere fact that its actual volume has been increased threefold, would lead us to expect a corresponding increase in prices. Such increase, although eventually certain, does not usually appear at the same moment with the expansion. Like the moon's attraction upon the ocean, the time of high water is postponed for a certain period beyond the moment at which the influence has been exerted, and the length of the interval is affected by exceptional causes. But although there may be delay the event is certain. Prices will reach the height adjusted by the scale of issues and they can only be restored to their usual condition by a return to the normal standard of currency. In other woods, the only remedy for an inflated currency is a reduction of the circulating medium. Is this reduction practicable? Before answering this question it is important we should be fully assured of the of paper currency. If the country were open to foreign intercourse the difference in value between coin and paper money would at once afford a test. But in the present condition of