New-York daily tribune., 1858-02-17
New0ork DAILY Gribm,re
TO THE PRESIDENT OF THE UNITED
STATES
LETTER XIX.
jaN lsw6w w

"NoInlSG" Gays Hume, I" is esteemed more cer-
tain sign of the outishing condition of any nation
" than the owncss of interest in other words, the
moderation of the charge for the of that greatest of
all the instruments used by man, called money II is,
Mr. President an evidence of the existence of that
feeling Of security which always attends advance of
ciyilzatioI-the rate Of interest BEN very high in all
countries in which property is insecure and declining
steadily pass outward toward those in which men
are more and enabled to combine their efforts for
the promotion of The common gooiin which population
and wealth increase in which the land becomes more
productive-in which the prices of materials tend
10 rise, and those of finished commodities to fal-and
in which, consequently, the power to purchase the
precious metals augments from year to year.
That power, and the tendency to decline in the rate
Of interest exist in every community, in the precise
ratio o. the activity of the circulation of labor aud its
products. The more perfect tho existing supply of
money and the ii is utilized, the more rapid is
the circulation and the greater the tendency to in
crease in the ability for further purchases The less
the supply and the less il is utalzed the soweris the
socetary circulation and the greater is the tendency to
lose the money that had before been purchased. Ia
the ore case .bor obtains power over capital and
tie rate of interest falls. In the capital ob-
tanning increased control over abOrthe rate of inter-
est rises Tie first If these classes of phenomena OBJ
taiLs in all those countries that follow in tae lie id Of
Francc-impCrting raw materials, aud exporting the
products of their soil in the most perfect form. The
second is found in all of those that follow in the drec
ton now indicated by England-exporting the rude
products of the soil, and reimportDg them again in
nlshed state; as is the case with Irelaud, India, ia
maca, Portugal, Turkey, Mexico and all the States
Of Southern America.
In further proof of tkis, may take the various
phenomena prcschtcd by ourselves our policy has
changed from time TO time within the last half cen
fuYy In tba rfni Of froe rqEQ in nrad fh.
clo,e Cf the great European war, circulation almost
ceaseG-abOr was everywhere wasted-productOn
was small-and money was scarce and high. In that
which followed the passage of the highly protective
act of 1928, everything different-the circulation
having then been rapid, labor in demand, production
great and money low in price. The scene being once
changed, production declined, while money rose
with great rapdity-becomng, at length, 50 entirely
unattainabe that banks suspended States defauited
ard the Federal Government was wholly bankrupt.
The protective policy being again adopted production
increased with great rapdy while the rate of inter-
est fell 1t has now been high for years, and for the
that production has been SeadHyGRd regularly
deciHiRg IN uS ratio 10 he popuIatoa. In proof OF
this, have, Mr. President, the fact that the
sumption of food, cloth and iron bears now smaller
proportion to the numbers of the people than it did
ten years since. The facts Of the past three ye4rs
thus correspond exactly with hose observed in those
that followed 1886. Money was then high-tor.isn
.oans were large and emigration to the West was
great Speculation then rife as il recently has
been; but daily dimnution of production laid the
foundation Of the distress aud ruin that became 80
universal in 1912.
That cal prosperity is totally inconsistent with an
advancing rate Of interest, is fact whose truth Is
proved. by every chapter il the worlds history Ia
that direction, lie Capitalization and Slsyery-in-
creese in the charge for the use Of money being evil
deLce of growth In the power Of the accuulstons of
the past the labor Cf the presentof capitaloyer
labor. In proof Of this We have the fact that
throughout an important portion Of the Union, the
Pro-Slavery feeling keeps steady pace with the ex-
haus'on Of the land consequent upon the export Of
it, products their rudest shapeswth the exoort of
the precious metals-and with the increase In the
price OF money.
Money is often spokenof capital and thus we are
told that interest is high because capital is sc arce
There would, however, be as much propriety ia say
ing that rents, tolls freghts high because cap.
ital Interest is always high when money
from whatsoever cause is srce aud the high price
then paid for its use causes a deduction from the
profits Of the trader from the rents OF houses and from
the freghts Of ships The Of money then profits
at the expense of all other capitalists. Interest il the
compensation paid for the Of the instrument called
money and for that alone. In countries in which it il
high the rate Of profit is necessarily SO, because the
charge for the use of money enters go largely into the
trader calculations.
The high profits Of our Western States ars said TO
be the cause Of the high interest that Is paid; bat
here az everywhere modern political economy sabst
tutss effect for cause. Interest there il high because
motey-the thing Il which alone interest is paid
Is scarce and because its scarcity enables the men
VINO can &C mmand the use Of machinery Of exchange