The New York herald., 1862-07-30
The Financial System or the Govern
faent.

L NAcnts
The rebellion and the war into which we
have been plunged have SO shaped financial mat
ters that Secretary Chase now occupies the same
| position that the celebrated William Pitt, the
Prime Minister Of England, did during The French
| Revolution The English government had at
| that time an extensive war upon its hands-a
war that tried the resources Of the country and
called for the adoption of hold financial
measures by its agents. Specie payment was
| suspended in 1897, and in February Of thai
year the paper money system was inaugurated
| by William Pitt, and continued to be the sole
| circulating medium until 1919, when the Bank
! Of England resumed specie payments. Consols
were nearly at par when the paper money
was made the legal currency Of the country,
but Immediately afterwards fell to fifty eight.
| The public mind was in an excited condition:
owing to the war, rumors of invasion, and
| consequent commercial changes, and every
thing in an unsettled condition, fluctuations
| and uncertainties were the rule. The bro
| kers, fin2nciers and merchants at once COM
menced assailing Mr.. Pitt, and charging
him with running the country commercially,
financially and every other way. All the evils
chat the war, the excited condition OF the public
! mind and the revolution in trade and com
ncrce had brought upon the country were laid
| at the door of Pitts paper money. But, with
! all the attacks that were made upon him, he
| persisted in the system, and with the sanction
| CT Parliament continued it until the close Of
| the long contest at arms The result was that
| England, after relying solely upon paper
money FOR upwards of twenty years, success
| fully emerged from the war, and with the re-
| turn of peace the Bank Of England again re-
| suIncd specie payment.
| The similarity between the financial con-
| dition of England during the French Revolution
| and our own at this time must be apparent to
| the most casual observer Many Of the evils of
| the paper currency system of England have,
| however, been obviated by ours in the careful
| arrangement of details They are both war
measures, and a necessity to the successful pro-
| secution of the war; Consequently the criti-
cisms and tests that would apply in times Of
peace have no bearing whatever upon them in
time Of war. Many brokers and Wall street
fnanciers loaned large sums to the government
at the commencement of the war, hoping there
by to get its finances fully under their control.
In this they have been disappointed; the con
| idence of the public in the government pre-
| vented its bonds falling in value, as did the
| British consols on the issue of paper money;
and now they are busy assailing the financial
| system inaugurated by Secretary Chase. in the
| hope Of creating panic that will bring about
this result. Hence the World and other jobbing
H. ~
the interest of these panic makers, and assail-
ing the currency established by the govern
ment The Only result, if any, Of their work
is to destroy confidence in and weaken the gov
ernmens and the streng thening Of JEFF. Davis and
his extensive conspiracy. In all their state
| ments and predictions that ruin and disaster
will follow the continuation of Mr.. Chase's
paper currency system the facts in the case are
against them. BY citing the use Of gold. its ex-
portation and other changes in trade and traffic,
they make, is is true, a plausible story their
side. But the real truth of the matter is that
| those evils, If evils they may be called, which
| they charge upon the currency. are the results
of the revolution in trade and commerce, and
| the interruption Of communication with one
section of the country BY the rebellion and the
| war. and would have been hundred and q
| 3housand fold worse, were it not for the paper
currency system Of the government, and are
| not chargeable to it,
Let us look at the facts as they are
| In 1860 the specie'n circulation through
| out the country amounted in round num-
| bers to about two hundred and fifty millions,
/ and tue bank notes to two hundred and nine
| teen millions, making total circulating me
| dium Of nearly four hundred and seventy mil
| lions. In 1861 the country was plunged into
an extensive war, communication and CONNER
cial intercourse were cut of with one section Of
the country, and the depreciation of the sccuri-
| ties Of the rebellious States, which formed the
| baking basis of the Northwestern States,
| caused a sudden collapse in the banks Of the
latter section aud the withdrawal OF their crcu-
lation. The entire disappearance Of the South
| ern and Northwestern circulation took from
| business circles at least one-half Of our bank
| note currency. The subsequent suspension of
specie payment by the banks has withdrawn
| gold from circulation, and instead of being q
| portion Of the circulating medium Of the coun-
| try it is now an article Of commerce Here,
| then, is q direct reduction of the currency of
| the country of over three hundred millions of
dollars, or about three-iourths Of the entire
| circulating medium. What Is to he done. then,
| in this condition Of affairs. Shall we rely
| upon one-fourth of our former currency
to prosecute the war and conduct
the usual business Of the country?
| II needs no ipancier to see that it would be
utterly impossible. Universal stagnation Of
business and financial distress would be the
| order everywhere, and the war would end for
| the want Of means to carry II on.
| The reverse at Bull run revealed the fact that
| more extensive warlke preparations had to be