Constitutional Whig. [volume] (Richmond, Va.) 1824-1832, 1824-05-21

all the commercial nations of the world and
having observed changes to take place else
where, we should consider whether the ca;Iscs o.
those Changes have not reached US and whether
we are not suffering by the operation of those
causes, in common with Others Undoubtedly
there has been a great fall in the price Of all
commodities throughout the commercial world
IN consequence Of the restoration of state OF
peace. When the Allies entered France in
! 1914, prices rose astonishingly fast and very
high Colonial produce, for instance in the
ports OF this country, as well as elsewhere,
sprung up suddenly from the lowest to the
highest extreme. new and vast demand wa
created Tor the commodities OF trade. These
were the natural consequences of the great po
litcal changes which then took place in Eu-
rope.
| We arc to consider, too that our own war
created new demand, and that I, Government
expenditure of p 200, 900 or Sc 900 900 a year
had the usual effect of enhancing prices. We
are obliged 10 add, that the paper issues of our
Banks carried the same into effect still furth r.
a deprecated currency existed i'm great part
of the country; deprecated 10 such in extent as
that at one time exchange between the centre
ana the north, was as high as 30 per cent. The
Bank OF the United States was instituted to cor
rect THIS evil but, for causes which il is not ne
cessary now to enumerate, il did not for some
years bring back the currency ofthc country to
asoundstatc. Ti,:sdeprcciation of the circulating
currency, was SO much, OF course, added to the
nominal prices accommodates, and these prces
thus unnaturaliy high, seemed, to those who
looked only at the appearance, TO indicate Great
prosperity. But such prosperity is more spc
cious than real. II would have been better.
probably, as the shock would have been less.
II prices had fallen sooner. Atlength however
they fall; and, as there is little doubt that Ger
tain events in Europe had an influence in deter
mining the time at which this fall should take
place, will advert shortly TO some of the prin-
pal Of those events.
In May 1919, the British House Of Commons
decided, by an unanimous vote, that the resump-
ton OF cash and payments by the Bank of Eng
land, should not be deferred beyond the ensuing,
February. The restriction had been continued
from time TO time, and from year to year, Par
lament always processing to look to the rcstora-
ton ola specie currency, whenever il should be
found practicable. Having been in July 1918,
continued to July 1919, it was understood that
IN the interim, the important question of the
time at which cash payments should be resumed,
should be finally settled. In the latter part of
the year 'l8, the circulation of the Bank had
been greatly reduced, and severe scarcity of
money was felt in the London market. Such
was the state of things in England On the
continent, other important events took place
ihe>french indemnity Loan had been nemoci-
ated in the summer OF 1915, and the proportion
OF 1T belonging to Austria, Russia, and Prussia.
had been sold. This created an unusual de-
mand for gold and silver in these Eastern States
of Europe. Ii has been stated that the amount
of the precious metals transmitted to Austria
and Russia In that year, was at least twenty
millions sterling. Other large sums were sent
to Prussia and to Denmark. The effect of this
sudden drain of specie, felt first at Paris, was
communicated to Amsterdam and HAMBURG.
and all other commercial places in the north of
Europe.
The paper system of England had certainly
communicated an artificial value to propertv.
1t had encouraged speculation, and excited
overtrading. When the shock therefore came.
and this violent pressure for money acted at the
same moment on the continent an i'm England.
inflated and unnatural prices could be kept ND
no longer. reduction took place, which has
been estimated to have been at least equal TO
fall of30, if not 40 per cent. The depression
was universal: and the change was felt in the
United States severely, though not equally so
in every part of them. There are those, / am
aware, WHO maintain that the events to which |
hare alluded did not cause the great fall of
prices; but that that fall was natural and iuevi-
table, from the previously existing state ofthings
the abundance of commodities, and the want of
demand. But that would prove that the effect
was produced IAN other way, rathcrt than by ano-
Their cause. Ifthcse great and sudden calls for
money did not reduce prices, but prices fell, as
of themselves, to their natural state still the re-
suit Is the same; for we perceive that after
these new calls for money, prices could not be
kept longer at their unnatural height.
About the time Of these foreign events, orr
own bank system underwent change; and all
these causes, i'll my view of the subject, con-
CURED to produce the great shock which took
placer our commercial cities, and through ma
ny parts of the country. The year 1919 was
year ofnumeror;s failures, and very consider
able distress, and would have furnished far bet
ter grounds than exist at present. for that goo-
my representation of our condition which has
been presented. Mr.. Speakerllas alluded to the
strong inclination which exists, or has existed
in variousparts OF the country to issue paper mo
| ncy, as proof Of great existing difficulties.
regard it rather a very productive cause OF
those difficulties; and the committee will moi
lai! TO observe, that tho:o is, ut this moment,
much the lou1cst complaint of distress precise
" where there has been the greatest attempt to
rclieycit by systems of paper credit. And, on
the other hand, content, prosperity, and happi-
ness, are most observable III those parts of the
country, where there has been the least endca-
vor TO administer relief by law. In truth, no
thing is So bancful, 50 utterly ruinous to all true
industry, as interfering with The legal value Of
money, or attempting to raise artificial stand
ards to supply its place. Such remedies suit
well the spirit of cxtTavagant speculation, bu'
they sap the very foundation Of all honest ac-
QUESTION. BY weakening the security Of pro
perry, they take away all motive for excgtion.
Their effect is TO transfer property. Whenever
debt is allowed to be paid by any thing less va
liable than the legal currency IN respect to
which it was contracte the difference, between
the value Of the paper given in payment aud
inc legal currency, is precisely so much proper