The national era. [volume] (Washington [D.C.]) 1847-1860, 1857-10-29


long on the costly and miserable system of
substituting Bank debt for natural value
money. F.A.w.
MORE THOUGHTS ON THE HARD TIMES"
20 the Editor ofthe National Era:
SIR: A Few Thoughts On the Hard Times,
by an Observer" is the title of tract issued at
foston, which, with a few remarks, introduces
an extract from an article in the New York
Tribune of September 9, in which the editor
discusses the sad condition of our financial af.
fairs, together with the cause and tie remedy
for it." The object of this document is to at
tribute to low protective tariff the present dis
tress. As this is the only mode in which the
advocates of the protective policy now attempt
to advance their cause, viz by the " orguDlen
tum ad igaOrantiam and the "Grgumentum
ad popUIum mot by proper argument, but
by appeals-allow me to notice it briefly.
The question of protection " has really
passed argument The principle that freedom
of trade is essential to the greatest production,
has passed into the science of political econo-
my, unchallenged by any save those who are
willing to sacrifice science to prejudices. And
this fact is constantly being acknowledged by
those who favor protection. Hence are the
sneers about science" " heories," "eophis-
try +" fsllacious postulates and extrayagant
sophisms Of free-trade logic" politicians of
the abstract metaphysical school," recluse,
speculative theorists" "transcendentalsms
Of that sO-called science" &c. Such phrases
only show the weakness of their positions
They no longer attempt to defend them
by any appeals to science, bat by appeals 10
the vulgar prejudice against science. Bot no
sneer can be uttered against the " theories OF
Political Science, which does not equally affect
all science
The first subject mentioned in this article is
the export ofgold. The editor " greatly errs
IN saying that +" our current political economy
asserts the perfect inconsequence of what ig
termed the balance Of trade, and accounts gold
and silver no more desirable to a community
than merchandise of equal value" "Our cur
rent political economy" only leaves the balance
as trade, and the export or import of gold and
silver, TO the Law of value. That IL they cor
slider that if a nation has so much specie, (per-
haps by producing it; perhaps by obtaining it
from those nations which do produce it, IN or
der to export IL again. az England does from
America,) that prices are raised in that coun.
try above the corresponding prices in other
countries, then 1t becomes for the interest Of
that country to export that specie until prices
are brought 10 the level Of other countries II is
true that this is only a theory-and, as such
an absurdity-by the logic Of protection. Still,
1t Is both the teaching Of reason and expert
ence. Il is true tina: we have exported too
much of the gold of our zines. But is not that
sufficiently accounted for by the fact that We
havs&lled the channels of circulation with near
ly 200 millions of paper money, mot requiring
but onethird of that amount of specie In the
vaults of the banks,) and hence, by q most netu
raj process, have expelled the gold? 1t ia an
absurdity to deny that we should export gold,
since we produce more than we could employ
and IL is equally folly to Say that we should
export as much as we do. But the fault is not
with free trade. To attempt to restrain lie ex.
port by the imposition of duties is impossible:
for if we imported anything, we should export
gold to pay for it, as we wonld have supera.
bundsnce oft. TO restrain its export BY pro-
hlbition, would require more than the power Of
Government.
be blessing, as the writer does in this tract,
is to prove deranging cause at work; for it is
unnatural that a nation which has produced
several hundred millions of gold within few
years, should import gold. Now, the cause
producing this unnatural effect is plainly. nm.
deniably our mired-curTency system. And
this is the point that we would wish fairly
stated, in reply to this 'argunaeatupa ad iqn6
TGntiGm.' The panic is not an effect of the
low tariff. 1t is a coincidence, and not a re.
suit. Surprising, to take the view of the Trib.
Hne, that we have over-traded; there is no
virtue in that fact to cause the withdrawal from,
circulation Of one third or one half of the cur
rency IN few weeks. 0Ver-tradng may cause
etringency, but not panic Why should
the banks suspend? That measure was a ne.
cessity; but necessity of lchat d? Clearly of
the nature OF our currency; currency com.
posed, In two thirds part of the credit-paper Of
the banks, and IN one third part of bills which
represent an equal amount Of spccie-of money.
OF value-ln the vaults This mixed currency
sthis credit money, and UollGe money. form ore
apparently homogeneous mass; but the ele
zee, is are entirely distinct, and 80 a panic
proves them TO be; and that is the occasion of
the distress. In other words citizens have not
confidence in the power Of the banks to redeem
their bills with specie, for the very coed reason
that they know it 10 be impossible. Bank OK
pansions are always followed by bank contrnc
tions; IN other words, ''the bubble bursts :"
No other cause can account for the phenou-
ens of this "crisis.n Richer IN Agricultural
and manufacturing products than ever before
we stand, in the view Of the world, nation Of
bankrupts Our currency our currency y Is
It not so? Then why have the banks suspepded
the redemption Of their bills Have we over
traded? Suppose we have; there has bsen no
unusual demand upon us for specie, and It mat.
ters not, in accounting for our bankruptcy.
how much we have bought, if we have not been
obliged to pay for it. The whole explanation
of the affair We hold to be simply this The
banks throughout the Union were expanded in
their circulation TO three times the amount or
specie available for its redemption. besides
owing much more for deposits Certain fail
ures of unsound corporations first excited sus-
picion then came unusual demands for the
redemption of promises - in other words. a
run upon the banks; that necessitated a
contraction of paper circulation, which greatly
distressed its merchants and manufacturers who
had notes to pay. Then, some Of them failed !:
and the banks were called on for their depos,
ITS, as well as for specie for their notes. And
thew suspend, involving all in Its common ruin.
And this, sir, ID the beauty of credit cur.
rency. We might have kept mere Than one
hundred millions of the gold which we have ex-
ported: and we should have kept tive would
net have let it go-we would have exported
other things first / say, are scould haze kep
IT had it not been for the fact that we already
had more money than we needed In the shape
of paper promises. The question which We
hope the people who suffer by these g hard
times" will ask of themselves, and answer fol
themselves ia. does il pau to export our gold