The Sun.
London, England, 1870-01-19 00:00:00

TARIFF AND CURRENCY.

Coming now to a discussion of the "agencies which
disturb the equitable distribution of national wealth," the
commissioner again lays great stress on our redundant
paper currency. how this operates against the farmer,
both in selling and buying his supplies, is well described,
while, at the came time, the effect of our high tariff is
pointed out in the following passage :
" The value of the surplus for exportation is much less
than it would be wore the currency brought to a specie
standard and taxation reduced and equalised, and to this
extent the American agriculturist is placed at a disadvan-
tage with his foreign competitor •from the very outset.
Let us explain. It cannot be doubted that the cost of
transportation; elevating, storing, and manag ng is at least
ten per cent. greater than it would be under a normal con-
dition of currency and taxation. It is also certain that
the exporter of the grain will not give at the time of his
purchase an exact equivalent in currency to the gold price
at the place of sale in Europe, less commissions, transpor-
tation and profits, inasmuch as it is always doubtful whe-
ther the gold received GO or 90 days hence will then ex-
change for as much currency as it would at the time the
grain was first purchased. The exporter therefore of ne-
cessity insures himself to the extent of one, two, or four
per cent., as the case may be. But whatever these charges
may amount to, and, differ as we may in reference to par-
ticulars, it must be agreed that they are considerable ; they
are all reflected back and borne by the producer, and not
charged to the foreign consumer, for the latter can at all
ordinary times buy wheat from the Baltic or the Crimea
which is not subject to such charges ; and this loss, fur-
thermore, is not limited merely to the surplus available
for export, but, in accordance with the law above ex-
plained, is multiplied by the whole product, and dimi-
nishes the price for which every bushel is sold, whether
the same be intended for domestic or foreign consumption.
"We have thus stated the position of the American
agriculturist in respect to what he has to sell. Let us
next consider his position in regard to what he wishes to
buy. And here it is necessary to bear in mind that what
the grower of food and other agricultural products wants is
not money, but that which money will buy. We will there-
fore assume that the farmer has turned say 100 bushels of
wheat into 100 specie dollars, and next endeavour to trace
this sum of money through its course in procuring for Its
possessor the satisfaction of the wants under the stimulus
of which he has performed the labour of guiding the
powers of nature to the production of the wheat. He has
need of salt, and he finds that Ile can purchase it in Liver-
pool or Cadiz and lay it down in the United States at from
15 to 20 cents per bushel ; but the Government, through its
currency and its tariff, has imposed such a tax upon it as to
make it better for him to pay from 40 to 45 cents per bushel
for American salt ; or, in other words, to take less than half
the quantity for the acme money; the Government, at the
same time, receiving but little revenue—the ostensible ob-
ject for which a tax on salt, through the medium of the
tariff, was in the first instance imposed.
"Or, perhaps, he lives in Maine, and wants coal, and
could get twenty tons from Nova Scotia for his hundred
dollars. But the Government having imposed a tax of
one dollar and 25. cents per ton of two thousand pounds,
in gold, upon its importation. he finds it better for him
to expend one dollar and a half per ton more for transpor-
tation of coal from Pennsylvania. Thus 30 dollars'
worth of unnecessary transportation has been performed,
the Government has no more revenue, and he has less coal.

"Or perhaps he wishes to carpet his rooms. In Lon-
don the specie dollar received for a bushel of his wheat
would purchase of tapestry Brussels' a yard and a third;
but in New York he would find that Government, through
its currency and tariff, had so taxed carpets, that his specie
dollar, even converted into currency, will purchase only
about four-sixths of a yard of the same style and quality.
If, however, his means do not allow of th.e purchase of
tapestry Brussels, and he should endeavour to satisfy his
wants with a coarse drugget or hocking, he would find

that the price of his grain would purchase less compara-
tively than of even the more expensive and costly article.
If ho wishes to invest the proceeds of his wheat in Wan-
kete, he will find that one hundred bushels sold in Liver-
pool will buy him over seven hundred pounds of this
article; but if sold in New York, at present prices, it will
not bring him an excess of three hundred and fifty pounds.

If he should endeavour to console himself with the refleo-

tion that the Treasury gains to the extent that he loses,
and that through his sacrifices the period for the extin-
guishment of the national debt is shortened, he will find
the receipts from the duties on blankets under the tariff
to have been as follows :-1862, $612,283; 1866, $485,978;
1867, $207,598; 1868, $25,288. In fact, in almost any
direction in which he attempts to expend his one hundred
dollars in specie—or, in other words, for whatever article
he attempts to exchange his one hundred bushels of wheat
—he finds that the Government has interposed, and has
dictated to him that at this present time he must either
buy what he might not havo chosen, or take less than
what he might otherwise obtain."
OVIt CURREYCY EXCESSIVE.

The excess of the present currency is proved by the
fact that the amount of currency in circulation has been
arbitrarily increased during the past eight years consider-
ably more than twofold, although the increase of popula-
tion, production, and accumulated wealth during the same
time has been by general agreement in very much smaller
proportion, and although at the former date the amount
of currency in circulation was not limited by any serious
restrictions upon the creation of banks or the issue of
paper really or nominally redeemable in specie. Fur-
thermore, the tendency of all commercial nations is to-
ward economy in the use of currency. The.givulating
medium never advances in the same ratio with the ex-
changes which it serves to carry on. In the State of New
York, in the ten years from 1850 to 1860, the capital of
banks increased one hundred and ten per cent., deposits
one hundred and thirteen per cent., end specie ono hun-
dred and forty-one per cent., while the circulation only
increased fifteen per cent. The explanation of this phe-
nomenon was that bank deposits and other economical
expedients had largely taken the place of bank notes in
domestic exchanges.
It has been urged, that by allowing the present volume
of currency to remain unaltered, the increase in business
and the development of the country would gradually dimi-
nish and finally remove all yedundancy. To this it may
be replied, that the retaining of the present amount of cur-
rency in circulation tends to increase no business but
what is speculative, and to check the very development
which is expected to prove remedial. In the twenty-five
years which elapsed from 1833 to 1860 the paper circula-
tion of the country, left free and untrammelled to expand
itself, increased from one hundred and three millions to two
hundred and seven millions, or at the rate of 4.36 per cent.
per annum. Now should the future demand continue to in-
crease in the same ratio, it would require the lapse of 40
years from 1860, or until the year 1900, to bring the wants
of the country up to tee present supply.
(To be continued.)

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