The Burlington weekly hawk-eye. [volume] (Burlington [Iowa]) 1860-1876, 1862-11-29
Our Financial Affairs from an Enxlist
stand Point.

Our Financial Affairs from an Enxlish
stand Point.
Excepting in the error made in regard to the
imposition of q tax as a basis for the revenue
policy of our Government, the article below,
from the London Globe, is most excellent re-
view OF the financial situation of the country
We have before remarked that, in this coun-
try, two errors are prevalent a. to the monetary
and commercial position of the Northern States
of America. We have said that it is unfair to
impute the whole evil whatever it may be, to
the Federal Government, and that the real cause
s rightly assignable to the faulty system of pa
per money issued by the State Banks Some
thing, therefore, is due in defense Of the Federal
policy in their expsdient (under the very diff
cult circumstances which presented themselves)
of substituting their own paper money for that
of the suspended banks. We further stated, At
the same time, our difference with those Who are
of opinion that this operation is likely to induce
an early collapse or convulsion in the CONNER
cial body of that part of the world, and We are
now about to offer reasons for our own opinion.
But we would premise that, whether the bad
consequences, which all agree 10 anticipating
be near or distant, the exceedingly arduous ma
ture of the tax imposed on the American finan.
ciers ought to plead in mitigation of the sen
tence finally to be pronounced upon them BY
European critics. Desperate circumstances may
ia public affairs, be an excuse for desperate
measures, although those measures may not ter
inmate in entire success With this reservation
We proceed to discuss the second error to which
We have sdvsrted.
As the paper money issued BY the Federal
Government is at any time convertible into q six
per cent. stock, the arrangement is, to certain
extent, an invitation to the whole community to
become the creditors of the Government in per.
petuity. This, at the worst, is not very hone
less stustisn. The foreign debt Of the United
States can not DE large, and the domestic hold
ers Of obligations seem to be abundant,y conf
dent of the regular payment of dividends, as
We may gather from the quoted prices Of the
stock, which are about the same as those of the
obligations Of the city of New York. Bearing
this option of conversion in mind, we readily
perceive that, 80 lorg as the waste and expendi.
ture OF war is going on, the Government con-
tractors are being enriched, and not oaly they,
but those wLo supply the contractors with labor
or materials-alI, in short, who can, directly OF
indirectly, make the Government their Dc btol
The expanding currency causes rising prices,
and the trader really gets the three elements
which trader wants, . good demand, a good
price, and good paymastei. An occasional
check there may bs; that is possible enough;
but, while the war lasts, the course of trade will
certainly produce very large fortunes aud very
few failures.
In our own history it was exactly the same.
In 1877 the Bank of England, under the author.
ity OF the State, suspended specie payments, and
from that time until 1915, when preparations
we're commenced for the return to metallic mo-
ney, the progress and the profits of commercial
on
themselves in the possession, not indeed of mo,
ney itself, but of inscriptions in the bank books
of perpetual Government annuities, readily con.
vertibls into money in all future time. So east.
" and rapidly we're fortunes of this kind ac-
cumulated, that the 'nouced,lz riches" we're con-
tinually applying at the Heralds' College to be
made acquainted with the ancestry, and one of
the officials stated in court of Justice that II a
man could tell them any thing about his own
grandfather, il was rather rare occurrence, -
We need not, however, turn our attention from
America to contemplate the course of revulsiops
in the value of money Mr.. McCulloch has point.
ed out that mo instance is to be found in the
history Of commerce, Of such wanton over-is.
sue OF paper money as took place in the United
States In 1885 and 1886, when all individuals
how bankrupt soever in fortune and character
had no difficulty in obtaining credit with which
to embark in the most gigantic proiects.n The
reaction in that case came at last surely enough
and the distress caused was proportioned 70 the
magnitude of the evil, but it was not until the
years ls4l and 1912 had passed that the conse.
quences ceased to be experienced OF course
the interruption of industry, and the expendi.
ture of war, cause great destruction of materi-
al wealth, but to exhaust the material wealth of
the United States would be the work OF many