The Sun.
London, England, 1865-03-14 00:00:00

cessor of Adam Smith, Mill, Ricardo, and his quasi
namesake, the late J. R. M'Culloch, and might,
from the doctrines he has enforced, be assumed to
have imbibed financial wisdom from the lips of the
late Sir Robert Peel, and to have learnt the prin-
ciples of Free Trade at the feet of Richard Cobden.
He thus-expresses himself on the subject of paper
money :—" What is needed in a paper circulating
medium is that it should be convertible into coin ;
that it should be sufficient in amouut to answer
the purposes of legitimate business , that it should
not, on the one hand, by being over-issued, encour-
age extravagance and speculation, and give an arti-
ficial and unreliable value to property ; nor, on the
other hand, by being reduced below the proper
standard, interrupt business and unsettle values. It
should be supplied to just the extent of the demands
of a healthy trade. It should be increased as the
regular business of the country may require its in-
crease, and be diminished as the proper demand for
it is diminished." The following are his reasons
why a Government should not issue its own paper
and call it money, and why a Government should
not act as the banker of the nation :—" Govern-
ments should not be bankers. None has existed
which could be safely trusted with the privilege of
permanently issuing its own notes as money. Under
popular institutions like ours no m ore dangerous,
no more corrupting power could be lodged in the
hands of the party in possession of the Government,
none more perilous to official probity and free elec-
tions. Give to a party dominant in the Legislative
and Executive branches of the Government the au-
thority of issuing paper money for the purpose of
furnishing the country with its currency, subject as
it would be to no restraint but its own pleasure, and
what guarantee would there be that this authority
would be honestly and judiciously used? If there
were no risk in the preparation of the notes, and
checks were provided to make fraudulent issues an
impossibility, the power of issuing Government pro-
mises as a circulating medium is too dangerous a
one to be conferred upon any party, except
under extraordinary circumstances." And while
he lays down with such force the principles upon
which he would act, and on which it must be
supposed he will act to the extent. of, his
power, :he thus in equally emphatic terms describes
the mischief already done by his predecessors :
•' The expenditures of the Government have created
a great expansion of currency and of prices. There
would have undoubtedly been an expansion, in a less
degree it is true, but still an expansion, if the war
had been carried on upon a specie basis. Prices of
all the necessaries of life as well as luxuries, and of
everything which the Government must purchase in
the prosecution of the war, are enormously high,
and the penalty is yet to be paid for the inflation, in
increased taxation and the ruin which must over-
whelm the thousands who believe, and act upon the
belief, that the apparent prosperity of the country is
real, and is not to be -interrupted. Fortunate will
the country be if the war can be closed and prices
reduced to former standards -without a collapse,
which will as greatly excel in the extent of its disas-
ter that which occurred at the close of the last war
with England as the present war excels that in
costliness and magnitude."
In his letter of instructions to the promoters and
founders of the new National Banks, established by
Mr. Chase with the avowed object of driving all the
old State Banks out of existence, he recurs to this
theme in the following words :—" Bear constantly
in mind, although the loyal States appear superfi-
cially to be in a prosperous condition, that such is
not the fact ; that while the Government is engaged
in the suppression of a rebellion of unexampled
fierceness and magnitude, and is constantly draining
the country of its labouring and producing popula-
tion, and diverting its mechanical industry from
works of permanent value to the construction of im-
plements of warfare—while cities are crowded and
the country is to the same extent depleted, and
waste and extravagance prevail as they never before
prevailed in the United States, the nation, whatever
may be the external indications, is not prospering.
The war in which we are involved is a stern ne-
cessity, and must be prosecuted for the preserva-
tion of the Government, no matter what may
be its cost ; but the country will unquestionably
be the poorer every day it is continued. The
seeming prosperity of the loyal States is owing
mainly to the large expenditure of the Govern-
ment, and the redundant currency which these
expenditures seem to render necessary. Keep these
facts constantly in mind, and manage the affairs of
your respective banks with a perfect consciousness
that the apparent prosperity of the country will be
proved to be unreal when the war is closed, if not
before ; and be prepared, by careful management
of the trust committed to you, to help to save the
nation from a financial collapse, instead of lending
your influence to make it more certain and more
severe."

These examples will show the British and Euro-
pean public what :manner of man he is to whom
Mr. Lincoln has intrusted the management of the
finances at this time of peril. That he will restrict,
as far as practicable, the issues of incontrovertible
paper money, and that he will urge upon Congress
the necessity of a far better and more productive
system of taxation than has yet been dreamt of by
the assembled wisdom of that body, is, with the
views he entertains, as nearly certain as any-
thing human can be. But the old question will
recur, if the war continue for twelve months more—
how are the Army and Navy to be paid, unless by
fresh loans, or by fresh greenbacks ? Mr. M'Culloch
knows, if Mr. Lincoln and the American people do
not, that the North cannot afford the expenses of
the war either in men or in money ; that the sooner
it stops the better ; and that, stop when it will,
there will come the day of reckoning. No states-
manship can avert the crash, though it is possible,
if Mr. C'Culloch be as bold and successful in en-
forcing his views as he is correct in expressing theat,
that the inevitable shock may under his manage-
ment be leas calamitous than it might have been
under the blind guidance of Mr. Chase or of Mr.
Fesseaiden.

RAILWAY INTELLIGENCE.

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GRAND TRUNK OF CANADA.

The traffic receipts on this company's lines for the week
ending Feb. 18, amounted, for local passengers, to £4,188,
for foreign passengers to £535, for mails, &c., to £642, for
local freight and live stock to £11,251, and for foreign
freight and live stock to £l,96s—toi?i, on 1,377 miles of
railway, £18,581, and for the corresponding week of last
year to £16,483 on 1,335 miles of railway, showing an in-
crease of £2,098. The above traffic, both in 1864 and 1865,
was partially interrupted by severe weather.