The Sun.
London, England, 1867-06-18 00:00:00

AMERICAN FINAN CE.

The American correspondents of some London
newspapers have endeavoured to discredit the
financial position of the United States, and with
this object have enlisted no less a person than the
Financial Secretary, Mr. M'CuLLocn, into their
service. A great many in Europe will read the
correspondence of the Times, Standard, &c., hut
few will read the very letter on which they com-
ment. " This gloomy letter," says he of the
Times, " written by the man who, of all others,
should endeavour to keep up the best appearance of
confidence in his department—not as a report to
Congress—but to a number of individuals, has had
a very depressing effect. It has caused our mer-
chants to be fearful of the future, and has confirmed
those suspicions of an unfavourable condition of
finance, which have been so numerous of late. It
had a direct influence on the gold premium—an un-
erring barometer of public confidence—and raised
it about 2 per cent., and at the higher figure it has
remained since the letter was published." The
best reply to this is the letter, which, in our
opinion, is far from " gloomy." A variety of
adverse circumstances have combined against
the State, and the Financial Secretary, and many
judicious persons, as that officer says, have
supposed it impossible to escape severe
disasters in the face of the large debt, the derange-
ment of business, the diminution of industry occa-
sioned by the war, and a redundant currency, and
that through those inevitable disasters they must go
before they reached a healthy state of national
finance. Mr. AFC nuocut maintains that these
judicious persons are in error, and has himself
undertaken to prove this by steering the State bark
through the difficulties. So far, he has succeeded,
notwithstanding all prophecies to the contrary from
both sides of the Atlantic, more especially from this.
Nor has he had to contend alone with the ordinary
obstacles surrounding the task that fell to his lot, for
extraneous circumstances, wholly unlooked-for, have
thrown a heavy weight into the opposing scale. Of
these the worst has been a failure of the harvest, so
complete, that the exporting ports on the great lakes
import wheat from the Eastern States, and the
eddies of commerce have actually carried bread-
stuffs from Liverpool to the grain-growing prairies--
the granaries of the world. The contraction of
trade, the heavy fall in the value of securities, and the
prostration of business were natural after the excite-
ment and inflation produced by the war, and were
probably foreseen and provided for by so acute
a Minister as Secretary AFC uLLocir. There can be
no doubt that he knew that the last Congress were
a dangerous body to be entrusted with the disposal
of the public funds. Indeed, his former letter,
addressed to these very Boston merchants on de-
clining a similar invitation last year, warned the Re-
presentatives against appropriating too lavishly the
national finances. It cannot therefore be said that
the squandering policy of the House was unlooked
for, but the Secretary could scarcely have antici-
pated that any sane body of men could have so
recklessly piled up national burdens. While the
drift of circumstances was all against the able
American financier, there was a great blow in store
for him to cap his difficulties, and, if possible, to
prove him a vain boaster. This was the Indian
War, which arrested the reductions in the army
expenditure, and forced on the Executive, a vast
increase. It is under such circumstances that Secre-
tary:NM:m.oml writes this letter, which shows his
unbounded confidence in the ability of his country
to surmount all such difficulties, and to do this without
leaving any train of disasters. Indeed, he argues that
the check to this continued prosperity will have a
beneficial result. " I believe," he says, " that it will
lead to improvements in our revenue laws, and to

an increase of efficiency in their execution, hasten
the representation in Congress of the Southern
States, and secure greater economy in all branches
of the public service." This letter has had an effect
on the gold market of New York, " that unerring
barometer of public confidence," and on the Stock
and Share Market, as well as.in strengthening busi-
ness, stopping speculation, and giving a confidence to
bona file investors. The Ames correspondent in-
sinuates that the rise in gold is the result of a public
want of confidence in the ability of the country to
bear its financial burden. This is the reverse of
the truth. The " barometer" would not be Doll,
but Gocernment Bonds. The official notification
that the contraction of the currency would cease for
some months, of course, enhanced the value of gold,
or rather depreciated the green-back currency.
Nothing can be more clear than that an increase of
greenbacks would lessen their value, or that a con-
traction would increase their value. Congress, might
vote a hundred millions sterling to tunnel under the
Atlantic, and the effect would be most injurious on
the markets of the United States. But though the
citizens might conclude that their representatives bad
gone mad, they would certainly not make this an
argument for repudiating their own liabilities, or
questioning their ability to meet every engagement
they had before contracted. The plain common
sense of the Secretary's letter, free from all elaborate
arguments, from all quackery and mystification, a
simple, honest statement of the position, under very
trying circumstances, is one of the most hopeful
signs that those interested in American finance
could have seen. So it was regarded in New York'
" We must earn more and spend less ; we must
sell more or buy less," the Secretary observes.
The remarkable decline in the incomes this year
from those of last year, clearly shows, that whether
the people like it or not, they must act on iNlr•
11PCULLGCH'S advice. The tax of the United States
is one shilling in the pound, levied upon all incomes
above £2OO a year. It was expected to produce
£8,000,000, but it will not realise more than one
half. The revenue of the Republic is influenced
in a far greater degree by the state of trade
than English revenue could be. Every man 13
more or less engaged in business. There is no idle
class, and however rich an individual may
be, he is expected to occupy himself in some pur-
suit, and to be actively engaged in developing the
resources of the country. In consequence, great
stagnation is surely followed by losses falling on
every citizen of the United States. Thus, for in-
stance, the income of the most wealthy merchant,
A. Stewart, returned last year at £BOO,OOO, is given
this year at £150,000. Even journals suffer. The
proprietor of the New York, Herald, who last year
paid on £30,000, pays this year on less than
£24,000. Trade is, however, improving in New
York, and the prospects of the coming harvest
are unusually good. If the revenue of the United
States suffers from a trade depression more thaw
other countries, it benefits in a corresponding de,.
gree when commerce prospers ; and as there are
many indications of an active revival, it is more
than probable that the great Republic will recona.
'llene° her career of financial prosperity, which
will belie these gloomy forebodings, as it has so ate"
done, the evil prophecies, of her many detractors.
Anglo-American