The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1863-10-29
Financial system of the United Sta tes-
Gold and Credit. --..-.--...--

that of credit and money. People will con-
found the most opposite things, such as mon
ey and capital, credit and property, public and
private credit, paper and specie, and for want of
two or three simple principles, entangle all the
subjects Of finance In the United States the
peculiarities ofour condition, confound both our
selves and the economists of Europe. Europe
laughed at the idea of our carrying on an
enormous war without borrowing money of
them. Everyb body remembers the awful pre-
dictions of the London 1SmleS-that we were
Igoing on rapidly to financial ruin and bank
ruptcy. The rebels said the same, land added
bread riots and other terrible things to the
sad picture. What a contrast with that pic
ture is the result l undertake tosay that the
| financial prosperity of the United States was
never so great as it is this very day. Never
was it's business more active; the basis of its
credit greater; or the value of property high
er. shall not stop to prove this, but it is sus-
ceptible of the most exact proof. Ishall here,
only by way of introduction TO fuller discus
sion of our financial and commercial condition,
state some of the elementary facts. In the first
place, money Ono matter of what composed) is
a mere machine to do certain piece of work
1t stands on the same footing as spinning
wheel or a cotton gin. Its business is to
make an exchanged transmutation of proper
| ty. 1t has no other business. There are two
| othe, elements involved in its use; cheapaess
and its convenience. AS between paper and
gold, paper is both cheaper and more convenient
Hence it is that all modern communities pre-
fer paper to coin, and the commercial tendency
ofthe age is to substitute paper as far as posi-
BILE for the precious metal. Why shoulda man
carry a hundred dollar RS in Lis pocket (of cap
ita) to make certain exchange, when he
can do it for five cents The common sense of
mankind prefers paper-when there is no dan
ger of loss. How completely money is mere
machine of exchange may be illustrated by
| the Journey of Dr. Barth. He leaves England,
for example, with bill Of exchange. He finds
that on the coast of Africa they will take moth
ing but SjLUer dollars. At Tripoh he converts
his paper into silver dollars. He leaves Trip
oil with bag of silver, and goes into the in
terror of Africa. But at certain point in
the interior, silver ceases to be a medium Of
exchange, and he changes his dollars int strings
of shells, called c0vTieS. From that point the
little shells paid for everything just as much
as if they had been English gold. They had
no intrinsic value, but they were the currency
of the country, and, at certain point, the sill
yer and the shells had an exchapgeable value.
Now in this transaction the paper was more
convenient than the silver, and the silver more
convenient than the shells. And (mark y the
most civilized nation used paper. Now, the
only difficulty about the paper 49, that if it has
no exchangabe value for property,it may be
loss on the Understands. This is the only
thing that depreciates paper money. We have
an example in the difference between the
notes of the rebel Confederacy and the United
States, Government. The United States notes
10 Iol Wbxr
There are two reasons First because every
body believes the United States both can and
will pay their notes; and, secondly because
the United States notes are convertible into
bonds, qclpo8e interest is payable IN goLd which,
by the well-known laws of finance, is equivi-
lent to paying the bonds themselves in gold
Nobody believes the rebel notes will be paid
and they are not convertible into any kind of
value; hence they must continually depreciate.
| Mr.. Robert Toombs says this is in consequence
of the quantity. This is a mistake. He may
make the quantity greater or less, and he can
not raise the value of note, which the hold
er knows, if left i'll his hands, is dead loss.
These being the principles by which money
is governed, the present credit of the Govern
ment is obvious. 1t rests, first, on the abili-
ty of the Government to pay its notes and
secondly,in the fact that it does pay them by
paying the interest of the bonds in gold. The
paper currency is convertible into bonds,
(Which are only larger notes. and the bonds
bear interest in gold. Thus all the paper
currency of the United States is now actually
specie paid, to the extent in which the capital
of the country can be absorbed in bonds.
What is the limit Of that absorption That
undoubtedly is vital question, and l shall
consider it at more length hereafter. At pres
-ent will mention only two or three facts,
which will serve as a generalization Of that
subject. In the first place, the property of the
nation is answerabe for the debts of the ma
ton if the people be Az honest people, and
heretofore we have been the most honest
nation in the world. The property of the 10y
al States worth, intrinsically, about four
tern thousand millions Of dOJJ0TS. 1t can I'M
doubleday havea public debt of Hirtyper cent,
or even tour Thousand millions. In the State
of Ohio, the Commissioner Of Statistics has
shown by indisputable facts, that the whole
debt-State corporate aud private--does not
exceed tacenty-6Oe per cent. Of the property.
This may be taken as a unit for the country,
and shows that the vast property of this ma
ton is capable of bearing an immense debt,
in addition to the presest liabilities. But aside
from all this these National Bonds are them
selves property of convenient kind 1t is
simply a means Of making much of the fixed
property convertible and changeable.
Now is this convertbility loss ? | should
like to see the man who will prove that the
issuing of United States Bonds is loss to the
nation. 1t is simply making it really CONVEX
IDLE, and that is process whick the country
has long needed, and is one source gifts pres
emf prosperity. When nation has arrived
at thirty millions of people, and commands the
resources of a continent; and has five millions
Of tons of shipping-exceeding that of any
other nation on earth--it needs much larger
proportion Of convertible, transferable proper
ty than we have heretofore had The war
has brought this about and is SO far bene-
fit. There are so many interesting, and as
yet entirely undiscussed points i'll our COM
lnercial and financial condition, that / must
leave them for another time. But will here
say, thot one of the greatest errors in the
minds ST most men in discussing political and
financial questions, is in failing to recognize
and consider the changed condition OF our
country and times. AS the Spaniards con-
tinue to use rope harnesses, so there are many
especially educated men, who think all things
remain as they were in the time Of the faith
ers. This is not 50. No country was ever
in the condition of ours | will mention two
facts winch put an end 10 an PioCouohCo III
regard to American finance. In the first place,
Iobor, which is the source OF wealth, is worth
much more in our country, under free insti-
buttons, than it ever was i'll any country up
on earth
In the next place, gold (Which the old econ
ornists insist upon ii, is the ultimate Value) is
in our country, so far as we know, absolutely
ilimitable. 1t stands on the same footing az
ootatoea and corn IT 10 citnnlv merchandise.
Where then is our limit in regard to credit
and money, when we have the whole world
tributary to usS -
A VETERAN OBSERVER
- -
rrzr- A great civ il snrinpinR un in Nevada