The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1865-12-12


cQpRt1. il slEi11 on " e sSeAee r. COR.
i 'i.Sed, 4, see sos rns.r;asiy i.
dictate on which side tho balance exists.
LII W sr1r cSE1.xf 4 ~ iSSE
The great expansion of 1885 and 1885, end
ing, With the tszible fpapSi9 SQl1eele ct
1851, from the directs u which Che country
did not rally for years, was the consequence
of excessive baak circulation and discounts,
and an abuse Of the credit system, stimulated
i rs S s ar. and
credits until, under the wild spirit Of specnla.
ton which pervaded, the, country, labor and
productions decreased to such an extent that
| the country which should have been the great
| food producing country of the world became
an importer Of breadstufs- "a .ss,s, -uaa
The balance Of trade hasbeens Tor . long
time favorable to EsOpe and against the
United States, and also in favor of the COM
merciaicities dftAe saah1ard and egainstthe
| interior, but vicious system of credits pre-
vented the prompt, settlement OF balercee
| The IMPORTERS established large credits abroad
I by means Of which they were enabled to give
| favorable terus to jobbers The jobbers, IN
turn, were thus, and by liberal accommoda-
tons from the banks, able to give their own
time, to country merchants, who In turn SOLD
| TO their customers on an indefinite credIt 1t
then seemed to be more reputable to borrow
money than TO earn it, and pleasanter, and
apparently more profitable, to speculate than
to work: and SO the people ran headlong into
debt, labor decreased, production fell OF and
ruin followed.
The financial crisis Of 1857 was the result
of similar cause, namely, the unhealthy ex-
tension Of various forms of credit. But, as in
this case the evil bad not been long at work,
and productive industry had not been seri-
oAsly dimini shed, the reaction, though sharp
and destructive, was not general, nor were
the embarrassments resulting from it pro-
tracted.
Now, in both these instances the expansions
occurred while the business of the country
was upon specie basis, but it was only nom.
inally so. A false system of credits had in
teryened. under which credits were deferred,
and specie as a measure of value and a regu-
lator of trade was practically ignored. Every
thing moved smoothly and apparently pros
perously as long as credits could be estab-
lished and continued, but as soon as payments
we're demanded and specie was in requisition,
distrust commenced and collapse ensued. In
these instances the expansions preceded and
contractons followed the suspensions, but It
will be recollected that while the waves were
rising specie ceased to be regulator, by rea-
son Of credit system which prevented the
use of it,
THE PRESENT DANGEROUS INITIATION.
The present initiation following the suspen-
sion Of 1861, Isl he result of heavy expend-
lures by the government, In the prosecution
of the war and the introduction of new meas
ure of value in the form of United States and
Treasury notes as lawful money. The coun-
try. as a whole. Notwithstanding the ravages
Of the war. and the draft which has been made
upon labor, is, by its greatly developed re-
sources, far in advance. IN real wealth ofwhat
it was in 1867, when the last severe financial
crisis occurred. The people are now con1par
atively free from debit the banks. with their
secured circulation aud large investments in
government securities. although not in an easy
condition, and doubtless too much extended
are it is believed generally solvent; but the
same causes are at work that produced the
evils referred to-. There Ia All Immense vol
ume of paper in circulation-under the iuiii-
ence Of which prices, already enormously
high, are steadily advancing and speculation
is increasing,-which must be contracted if
similar disasters would be avoided.
If the war could have been prosecuted on q
specie basis, there would doubtless have been
a considerable advance IN the prices of those
articles which were in demand by the gov
eminent; but inasmuch as in the condition of
our political affairs extensive credits could
not have been established in Europe, the ten
dency in this direction would have been kept
within reasonable check by the outflow of
coin to other nations, which would have been
the natural result ofthe advancing prices in the
United States. On basis of paper money
for which there was no outlet, all articles
needed for immediate use. of which il became
the measure Of value, felt and responded TO
the daily increase of the currency; so that
rents and the prices Of most articles for which
there has been demand, have been, with
slight fluctuations, constantly advancing from
the commencement of the war, and are higher
now, with gold at forty seven per cent pre-
MUM, than they we're when 1t was one hun
dred and eighty five. Even those which were
affected by the fall of gold uponthe surrender
! of the Confederate armies, or by the increased
i. supply or diminished demand. are advancing
again to former If not higher rates. The ex-
pansion has now reached such a point as to be
absolutely oppressive to a large portion of the
people while at the same time it is diminish
! ing labor and is becoming subversive of good
/ morals.
/
There are no indications of real and per-
manent prosperity in our large importations
/ of foreign fabrics; in the heavy operations al
our commercial marts: in the splendid for
tunes reported to be made by skilful manipu-
lations at the gold room or the stock board
no evidences Of increasing wealth in the facts
that railroads and steamboats, are crowded
with passengers, and hotels with guests; that
cities are overlooking, and rents and neces.
sares of life, as well as luxuries, are daily ad
vancing. All these things prove rather that
"a foreign debt is being created, that the mum.
I Der non producers is increasing, and tina,
productive industry is being diminished.
There is no fact more manifest than that the
plethora of paper money ID not ouly under
mining the morals Of the people by encoura
gng waste and extravaganza, but is striking
at the root of our material prosperity BY dimi
nishing labor. The evil is not at present be
yond the control of legislation, but it is daily
increasing, and If not speedily checked, will
at no distant day, eliminate in wide spread
disaster. The remedy, and the only remedy
within the control of Congress, is, in the
opinion of the Secretary, to be found in the
reduction of the currency.
TUE APERCIRCu IATIoy OF THE UNITED STATES
On the 3lst of October last, was substantial,
as follows
l. U1ited States notes aud fractional
Gu rrency. S4s& us o392
e. Notes Of the National Bauks..... 1855 600 GOO o
B. Notes OF State Banks. including out
standing tssueA of the etate Banks
inverted into National Banks 05OOo rdp q