The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1862-08-02


croakers and the opponents os the financial
system established by the administration to
! carry the country through the WARFARE still
| indnstriousy at work endeavoring to bring
| discredt upon the issue of legal tender notes,
| or paper money, and thereby weaken the hands
| Of the government and thus embarrass its ope-
rations in this its trying hour. They are con-
| stantly assaiing the system at every point, and
charging upon IL all the existing evils. With
their eyes upon the Sub-Treasury and bullion,
they are continually asserting that the paper
money Of Secretary Chase is running the conn
try. If our army is defeated Chase's paper
money is the canse; If merchant fails, Chase's
legal tender notes ruined him; If Wall street
is thrown into excitement and the bulls and
bears are frantically running up the price Of
gold, Secretary Chase's paper money Is respon-
sib'e; and so on. through long catalogue Of
evils imaginary and otherwise 1t matters not
what may happen, it is all laid at the door Of
the government currency. But with all their
denunciations, long and laborcd articles, mis-
construction Of facts and efforts to destroy pub
lie confidence in the financial system Of the
government the fact still exists that its adop-
ton was necessity and It's continuation indis-
| pensable at this time. We still maintain that
| it is the best system that could have been
adopted, and the only one that is adapted to
| the present crisis In the labored efforts Of the
panic makers to prove that the same fate awaits
| it that followed the issue Of the paper money in
| the American Revolution, OF France in the
| French Revolution, and that there is no resem-
| blance between the present system and that OF
| England under the auspices Of William Pitt
| they are in every instance lame and wide of
| the mark, as any person who will take the trou-
BILE to inform himself will see.
The paper money issued during the Ameri-
can Revolution had no basis for its support. no
provision for redemption. We had at that time
no commerce, national tax or revenue. With
| sparsely settled country, and about three mil
| lions Of inhabitants struggling for their indie
| pendence against almost the entire world, this
| paper money was put forth. and formed the
circulating medium Of the nation in its struggle
| for existence With its use we were successful
in obtaining our independence. But, there being
no basis for its issue. nor provisions for its re-
| demption, 1t was never redeemed, and millions
can be to-day found among families who have
| inherited it from their Revolutionary ancestors
In no particular was this like our present issue,
| as we shall soon show.
The financial system of England under Viii
liam Pitt-which the panic makers and those
WHO are at work trying to break down the
credit ofthe government have been trying to
| prove does not in the least resemble Mr. Chasc,s
| systern-grew out of the necessities Of the
| contest Of England with the continental Powers
and the first Napoleon, during what is termed
the French Revolution. The important epoch
in the financial operations of Pitt was
1877. In the early part Of that year,
owing to the events connected with the
| war in which England was engaged
| and to the advances made to the government
by the Bank of England, which prevented the
directors from having full control over the
issues Of the Bank, the public mind at the time
in an excited condition about the war, the pro-
vincial bankers failing in every direction, all
England was thrown into panic, and the bullion
of The Bank was fas: being reduced, with pros
| pect OF general run upon that institution In
this emergency council of the government
was called on Sunday, February &c, and an
| order issued prohibiting the directors from
| paying their notes in cash until the sense of
Parliament could be taken upon the subject.
Parliament Immediately considered the matter,
and, after discussing it at much length, APP
proved OF the prohibitive order Of the govern
ment council and ordered that the restriction
should continue until six months after definite
treaty of peace had been signed. The Bank
was under this prohibition of the government
until the passage Of Sir Robert Pecl's act In
1919, declaring that cash payments should be
resumed In 1925. The directors, however,
commenced specie payment in 1921. During
the period that the government prohibited the
Bank from redeeming It's bills it or
dered that the notes Of the Bank should be
received at par for all government dues, and
also in payment of all taxes. Although not
declared to be legal tender in every particular,
they were rendered SO in fact by being re-
ceived and paid out ne cash in all transactions
OK the government The value of these notes,
as measured by the price of gold, fuctuated
during this government prohibition from par
| TO twenty per cent discount. But these fuc-
tuations were the result of cheering or
| depressing news in regard to the war and
the failure or success Of the crops OF the
country. The greatest discount was when
the success Of the British arms looked
| the most doubtful. These facts are conclusive
that the government of England is responsible
| for making paper money the sole currency of
the country. By its means they were success
full in their long struggle, aud came out OF the
contest the leading nation of the world
Our present financial system is unlike that of
the American Revolution for the reason that our
currency now has national revenue and pro-
visions for its redemption. 1t recognizes the