Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1865-12-12
upon trade, and be quite likely to preeip-
i ff.afa. 4, sst ,,tsa.ss

j
on itate a financial crisis.
mt To this ii may be replied that prices
IL articles of Indispensable necessity are
Il, ready so high a. TO be severely Oppressi'
ut to consumers, especially to persons
% fixed and moderate incomes and 10 q
M poorer classes Not only do the interes
if- but the absolute necessities Of the mass
eh require that the prices Of articles need,
re for their use should decline.
is Nor is there any reason 10 apprehen
if by any policy that Congress may adop
so rapid reduction Of prices as co pr
dUce very serious embarrassnlents
"A trade. The Government currency ca
- only, 70 any considerable extent be witt
40 drawn by a sale of bonds, and the u,
= mand for bonds win be so affected b
n the state Of the market that a rapi
~ contraction will be difficult II not i'm
(. possible, even If it were desirable Ther
l. is more danger 20 he apprehende
- from the inability Of the Government ;
N reduce its circulation rapidly enougl
n than from a too rapid reduction of IL. l
= IL, IN part, 10 prevent financial crisis
,r that Is certainly 70 come without 10 ina
N the Secretary recommends contraction
! Prices are daily advancing. The lOnge
~ contraction il deferred the greater mus
I, the fall eventually be, and the more Sc
y riOus viii be its consequences. 10 is no
4. expected that a return 10 specie pay
a ment viii bring prices back to th'
/, standards Of former years The great IN
+ crease OF the precious metals and hlgi
4 taxes viii prevent this hut this consid-
, GRAFTON makes il the more important thai
] all improper and unnecessary influences
in this direction should be removed.
Again it is urged that a contraction OF
the currency would reduce the public rev
enues.
II is possible that this might be the inn
mediate effect, but it would be temporary
only. The public revenues depend upon
the development of our national re-
sources, upon our surplus productions; in
other words, upon labor. The revenues
derived from transactions based upon a
false standard of value or from interests
that can only flourish in speculative
times, are not those upon which reliance
can be placed for maintaining the public
credit. What a healthy and reliable busi
ness requires is a stable basis This il
cannot have as long as the country is in
flicted With an inconVertible currency,
1 the value of which, rs well as the value
/ Of the vast property which is measured
bv it. il fluctuuUng and unreliable, and
may be in no small degree controlled by
/ speculative combinations.
It is also urged that the proposed policy
would endanger the public credit, by
preventing funding; and that it would
compel the Government and the people,
who are in debt, 10 pay in a dearer cur
rencV than that in which their debts
were contracted.
The Secretary isUuahlc TO perceive any
substantial ground for this objection. He
cannot understand how the process OF
funding is likely TO be aided by the con-
tinuance of prices on their present high
level or how the credit Of the Govern
ment IS 10 be restored by the perpetuu-
ton Of an irredeemable currency, espe-
cially as that currency consists largely Of
its own notes. While il Is hoped that
early provision viii he made for the COM
mencement of the reduction of the na-
tional debt, an early payment of il is not
anticipated Nor is it understood that
those who are apprehensive Of the effects .
OF contraction, entertain the opinion that .
The present condition of things Should be .
continued until any considerable portion .
Of this debt shall be paid. IN
So far As individual Indebtedness Is re-
garded 10 NAV be remarked that the
people OF the United States, if not as free
rom debt rs they were six months ago,
are much less i'm debt than they have
been in previous years, and altogether
less than they will be when the ineyita-
bic day of payment comes round, If the
volume Of paper money is not curtailed.
4 financial policy which would prevent
the creation Of debts and stimulate the
payment of those already existing, so far
from being Injurious, would be in the
highest degree beneficial
II is further urged that reduction Of
the Government notes would embarrass
the national banks, If it did not force
many Of them into liquidation.
To which il may be said that ID is bet
ter that the banks should be embarrassed
now than haukrupted hereafter. Their
business and their customers are now
under their control. What viii be their
condition in these respects If the eNpan-
sion continues and swells a year OF two
longer, it is not difficult 10 predict. While
tlere has been no unhealthy expansion
1f credits in the United States for which
the banks have not been largely respon-
-ible, there has been none by which they {
have not been ultimately the losers. d
-nless their sentiments are misunder-
stood by the Secretary, the conservative j
bankers Of the country are quite unani- 5
IIuusIg lIs favor of p rIIrlailneuH OF the .
currency, with a view 10 an early .,-t,.,It {
to specie payments. ]
Again It is said that the excessive
creating and sustaining high prices as a 4
currency. This is un-
true; but ii is also, true that !
excessive deposits are the effects Of eXccs- {
-ive currency, and that whenever the ,
currency H. reduced there viii he, at least, /
a corresponding, if moi a greater reduction j
Jf deposits
The last objection which viii be no /
iced to the measure recommended is, /
that il would by reducing the rate of for
.ign exchanges, reduce exports and in !
,rease imports.
Ii is doubtless true that a high rate of ,
exchange did fOr time increase the eX-
DOrtations of our productions, and dimin-
-h the importation of foreign articles, but /
Ibis advantage was much more Than l
:ounterbalanced 10y the largely increased ]
expenses of the Government and of the ,
people, resulting from the very cause that ,
produced the high rate of exchange. Be
.ides this apparent advantage no longer
exists. The advance of prices in the n
United States, notwithstanding the con-
.inued high rate of European exchange, /
Is now checking exports and inviting inn
ports, and is creating "a balance in favor
lt Europe that is likely 10 be the greatest
obstacle in the way Of an early resump
lion of specie payments. Nor must il he
forgotten, that while the export of our
was stimulated by the high
rate of exchange, this very high rate Of
exchange enabled Europe to purchase
them at exceedingly low prices.
Unless am unusual demand for Our pro-
ducts is created in Europe by eXtraor-
binary causes, it will be ascertained, 10y
reference 10 the proper tables, that our
imports increase, and our exports dimi-
ui-h, under the influence of a redundant
currency But reference 10 figures is
hardly necessary to suhstantiatc this pro-
position. 1t is substantiated by the state
ment of it. A country i'm which high
prices prevail is an inviting one for sell
lers, but an uninViting one for purchas-
ers. Such country Is unfortunately the
United States at the present time. In
order, however, that there may be no
misapprehensiOn on this point, the at
tentiOn of Congress is respectfully called
10 a clear and interesting paper from DR..
Elder, statstician of this Department,
accompanying this report.
Every consideration, therefore, that
has been brought to the mind of the Sec
retarv confirms the correctness Of the
views he has presented. If the business
of the country rested upon stable basis,
or if credits could be kept from being still \
further increased, there would be less oc-
c;tsion for sulictude on this subject. But 1
such is not the fact. Business is not in a
healthy condition; it is speculative, /
fcverish, uncertain. Every day that
contraction is deferred increases the difll- /
Guilty Of preventing financial collapse. /
Prices and credits will nOtremain as they /
are. The tide will either recede or adj |
vance and it will not reoede without the /
exercise Of the controlling power of Con-
gress.
RECOMMENDATIONS.
The Secretary therefore, respectfully
but earnestly recommends
First. That Congress declare that the
compound interest notes shall cease to be
a legal tender from the day Of their ma
Uurity.
Second That theSecretary be author
lied, in his discretion, TO sell bonds of
the United States, bearing interest at a
rate not exceeding six per cent, and re-
deemable and payable at suclI periods as
may he conducive to the interests Of the /
Government for the purpose OF retiring /
not only compound interest notes, but 4
the United States notes.
IL is the opinion Of the Secretary, as has |
been already stated, that the process of /
contraction cannot be injuriOusly rapid; /
and that it will not be necessary 10 retire /
81. A.. 4.... 4