The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1854-12-24

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Dot prevents and tho laboriAg classes n tksss
States must continue subject TO al The Losses end
to which thsy are exposed sAasr
luch system.
ng 20 abundsstly, NO effort is made b. the Ststs
governments to place our currency O bsenr
basis. To the working clauses the Influx q gold
has proved curse rather than . blessing, becaune
Is l prices q shsy lave 70 buy have Ssss
raised in higher ratio than have been the wages
Leaving 4 to the ss.ss governments 70 rsss.s
he United States government has every inAses-
uent e adhere closely TO the principles Of fiscal
OF the evils that are avoided by guarding Agaiak |
Improper connections OF bank and State. striking /
example occurred last summer. A draft nor the m
amount Of seven million dollau W. =
sued on the treasury oface ct Nev York, In fulfME
mept Of an sppropriaaon made by Congrea:: =
gold; and it could have been paid in half an hour
the parties entitled to demand It had been ready y
receive It
have been made tho basis Of new issues and new
discounts to the amount Of many millions. Then,
after notice had been given that the governne.e
would want the money months Of pTepsddan wo.w
have been necessary for the banks to curtan theix
circulation, and cal in Whist they had lent 70 neF
chants and speculators. By this process vesy o..
BEEN i injariousy Affected. But Is the money 1ss
not In the banks but In the treasuryas It existed
not In the form Of paper credits, but q gold and
silver-as no loans, discounts or paper issues had
be en- based upon it--this large fiscal transactisn
had no disturbing effect on commercial operations.
II demand had been made on the banks at that
juncture for million dollars to send Abroad
would, in addition for other demands for expestss
arisiug from other causes, have produced disas-
trOua cOnvulaiOQ.
or the excellent working Of the system We have
further prof in what has occurred 10 paying on the
public debt The United States Bank never made
loan to governments without bringing distress On
the mercantile community, and inflicted evsn
greater evil ON the public at large when Il Wa1
made the agent for reimbursing the holders Of pab.
lie stocks. In the voluminous documents APPENDED
April, 1882, continual reference is made to changes
in the operations Of the United States Bank, re1-
dered necessary BY government reclaiming it! DE-
1Sr the Purpose Of paying o. ans sac
had to shape proceedings, not according to the o.
msnds Of commerce in their respective neighhor-
hoods, but 30 IS to throw funds on particular
points. The whole course o. exchanges was shu
from Boston to New Orleans. When the government
finally did, through the agency of the bank, make
payment, 1t made 1t not In gold or silver, but N
there was not one ounce more Of gold or silver n
the vaults 0f the bank or the pockets OF the po0-
pie than there was before. The whole transaotioa
was mere transfer Of credits from one individual
transfer which may have done more harm thaa
good; for the creation Of new bank credit IN ono
city viii not atone for TIE destruction OF IN old
bank credit in another city.
government in paying of tho public debt under the
constitutional treasury system. No ono train q
commercial operations s N the least degree ipJur-
ously effected BY It. There Is no curtailmens q
Of exchanges, NO calling In Of loans and discu1nt1.
When payment Of the public debt Is made, Il y
made, not with mere credits but with solid sapftal.
and with capital in it's most available form foc
general commercial uses, namely, gold and dlveg
coin: With every portion Of the public debt patA
Of, the amount of gold in the vaults Of the banlM
and the pockets Of the people Is increased. In Tia
way, since the present administration came int
So in the payment Of the interest on public debt.
the banks are fiscal agents, the whole Of the pay
ments amount to nothing more than TRANSFER g
credits from one account to another. But eveU
payment Of interest on the public debt made under
the constitutional treasury system increases the
amount Of the precious metals In the vaults Of the
banks or the pockets Of the people.
So with the other expenditures Of goyernmeak
the banks are fiscal agents, they pay the public
creditors not with circulating capital, but with cir
eulating debt for this Is the true character Of ~
circulating medium the banks create. Under The
constitutional system the public creditors a.e paid
With circula ting capital, for su,A is gold and siver
Il it Be objected that the government can PAY
back to the people nothing but what it has prev-
mited. But It Is not one Of the least inertia Of t6s
constitutional system that It has by it's own action.
80 increased the stock Of precious metals In the
country as TO sustain, not only it's oxn Operations.
but, to certain extent, the operations OF Che banka
and also Of private individuals
CAUSES OF PRESENT HARD TIMES.
The present troubles in the money market ere
owing chiefly to the following causes:
l; The rapid extension, under fresh supply q
gold, Of paper money banking system, which rests
on principles radically uns0und, especially In sane
Honing the issue Of notes of email denominations.
to flow from Europe to Asia, instead Of taking ID
usual course from Europe to America.
3. The attempts to make, In few years, numerous
and extensive lines Of railroads. which would, il
rssscR; ssS1,e many ysMs 70 complete ;|1 them:
by reducing the price of the public lands, and by
other measures, which have thrown into the market
in few years a. mach land as viii supply the ae.
mand for cultivation for many years.
II there ha, been any excess Of imports, that Or.
cess has been caused wholly and solely by excess of
bank issues. It IL only link in the chain Of efecs
like extravagance in living, and all the Other evils
which are the consequences Of paper currency In
lations.
Not one Of the causes sIngly, but the whole soar
combined, have produced the high rate Of interest,"
To suppose that any mode Of managing its 6soA
adopt could counterfeit such causes, is follyW
which NO rational man will be guilty. Nothing hut
the constant influx of gold from California has pre-.
vented general bankruptcy; and If the regular sup.
for few months, 1t would, 80 teusely has srsdt
been strained, be followed By the most disastrous
results.
II Is no more In the power Of the general govern.
ment by any fiscal system 1t may adopt, 70 counter
act causes OF such Q nature as those above me1.
toned, than2t would be to correct the evils thG
result from the want Of industry, economy ana
prudence ON the par. OF individuals Bat IL One
constitutional treasury system is faithfully carried
out in all its parts, Il win produce the following
Effects
1. II will increase tine amou ns Of golz and silver
people.
2. Though 1t cannot control tae banks, It vlN, t.
. certain extent, check them in their sxpana,as,
end thus weaken the forco Of their subsequent Goa
fractions.
3. It win prevert those losses which wars m fr4