The Sun.
London, England, 1865-04-25 00:00:00

AMERICAN FINANCE.

The following letter has just been sent to the
well-known American political economist, Mr.
Henry Carey, by the new Secretary of the Trea-
sury, Mr. M'Culloch :

" Treasury Department, April 4, 1865.

" Dear Sir,—Your favour of the 27th ult. would
have received an earlier reply but for pressing offi-
cial duties. I have now only time to remark briefly
that I am not responsible for what the newspapers
may have said about the financial policy I shall
adopt as Secretary of the Treasury.
" Amid the great events that are transpiring in
the United States, overturning theories and con-
founding the wisdom of the wisest, a Secretary
of the Treasury who should avow, or even deter-
mine definitively in his own mind, his future
policy would be pronounced a bold rather than a
sensible man. What I shall aim to do is to watch
carefully the progress of the events that I may be
unable to control, and endeavour so to accommo-
date the administration of the Treasury to those
events as to maintain the credit of the Government
and protect the interest of the people.
" In the brief address which I made to the prin-
cipal officers of the department on the 9th ult. I
said, among other things, My chief aim will, of
course, be to provide the means to discharge the
claims upon the Treasury Department at the earliest
day practicable, and to institute measures to bring
the business of the country gradually back to the
specie standard, a departure from which (although
for the time being a necessity) is no less damaging
and demoralising to the people than expensive to the
Government.'

" This is the only avowal of policy which I have
made, or expect to make, at least for the present.
" The former of these objects is receiving my first
attention. The sales of the Seven-Thirty notes,
than which no more desirable security will be offered
to the public, which have been temporarily dimi-
nished by the Wall-street panic, will, I am hopeful,
be soon again so increased as to put the Treasury in
a condition to meet all suspended requisitions, and
honour all draughts that may be made upon it ; so
that the different departments, by being in a con-
dition promptly to meet their engagements, may be
enabled to reduce largely the expenses of the Go-
vernment.

"The latter object seems to be in the right train
for accomplishment by the effective blows of our
military and naval forces without any interposition
of the Treasury Department, and in the face of a
daily increase of currency through the instrumen-
tality of the national banks.
" You seem to be apprehensive that the return to
specie payments is to be effected by a contraction of
Government issues, and you say that 'in one thing
an have been disposed to unite, and that was that
an early resumption was the cardinal point of my
policy, and that it was to be sought at whatsoever
cost to the capitalists and working men of the
country.'

" A resumption of specie payments is with me a
' cardinal point,' because I believe that the specie
basis is the only safe and healthy one for business ;
and because I am clearly of opinion that the in-
terests of capitalists and working men will be pro-
moted by a return to it; but no policy could be
more unwise than that which should attempt to ac-
complish it by such a curtailment of the currency as
would prostrate or• injuriously affect those great
interests upon the prosperity of which the Govern-
ment depends for its revenue, and which cannot be
broken down or severely depressed without de-
priving labour of its proper reward.
" The history of Wall-street within the last ten
days sustains the correctness of the opinion which
in another position I have frequently expressed—
the high price of gold was to be attributed in part,
at least, to other influences than the expansion of the
currency, and seems to indicate that the paper cir-
culation of the country which has been issued or
secured by the Government, even while its volume
is being increased, may appreciate nearly to the
specie standard.

"As the war draws to a close, and the restoration
of the Union is no longer doubtful, gold and cur-
rency approximate rapidly to each other in their
market value, and of course all those articles which
were made to follow the former in its ascent must
sympathise with it in its decline. This cannot be
prevented by any action of the Treasury, even if
the interests of the country require it. It might
have been better for the country and the people that
the decline of coin should have been more gradual
than has been the case for the week or two past, but
it is better that it should have come down as it has
than it should not have declined at all.
" It is understood, I believe, among those whose
habits of indulgence led them into protracted ex-
cesses that ' sobering off' rapidly is a dangerous
experiment, but, dangerous as it may be, it is pre-
ferable to continued intoxication.
"It does not follow, however, that be-
cause gold has declined from 185 to 146, and
may speedily decline much further, prices ge-
nerally will fall to the same extent, nor do I
believe that any permanent decline that is likely to
occur will prostrate the great interests of the coun-
try. On the contrary, lam of opinion that when the
specie standard is restored, or nearly reached, the
assurance that this state of things will create, that
the business of the country is to be transacted on a
firmer basis, will divert capital from speculation, and
stimulate, instead of prostrate, productive industry.
" The close of the war will remove tine Govern-
ment in a good degree from the market, both as a
borrower and a purchaser, and while the business of
the country is being accommodated to the new order
of things there will be, to a considerable extent, stag-
nation and embarrassment ; but, as hostilities are
now likely to terminate before speculation has re-
sulted in large individual indebtedness, the transition
is likely to be effected without the disasters which so
many have apprehended. The liabilities of the peo-
ple are so small, the circulating medium is so ample
and well secured, the resources of the nation are so
vast, and our political future is so brilliant, that the
embarrassments which a change in the business of
the country must bring about will be but temporary,
and the indications are now decided, that by the .