Cleveland daily leader. [volume] ([Cleveland, Ohio]) 1865-1873, 1865-12-09
NO DANGER IN coNrRAcr1oN.

currency may IN fact increase the supply
of it.
NO DANGER IN CONTRACTION.
Nor need thele be any apprehension
that a reduction of tie currehcy-un1ess ii
, be violent one-will injuriously affect
real prosperity. Labor is the great source
of national wealth, and industry invaria-
bly, declines on an inflated currency. The
value of money depends upon the manner
in which 1t is used. If it stimulates pro-
ductive industry, it is benefit, and to the
extent only to which it does this is it a
benefit. If, on the other hand, it dimin-
ishes industry, and to the extent to which
it diminishes it, it is an evil Even in the
form of the precious metals, it may not
prove to be wealth to nation. The idea
that country, necessarily rich in pIo-
portion to the amount of gold or sill
yer which it possesses is common
and natural, but an erroneous idea, while
the opinion that real prosperity is advanc-
ed by an increase of paper money beyond
what is absolutely needed as a medium for
exchanges of real values, is so totally fall
| lacious that few sane men entertain it.
whose Judgment is not clouded by the
peculiar financial atmosphere which an
initiation is SO apt to produce.
An irredeemable paper currency may
be necessity, but scarcely can fail, if, long
continued, to be calamity to any people.
| Gold and silver are the only measure of
value. They have been made so by the
tacit agreement of nations, and are the
necessary regulator of trade, the medium
by which balances are settled between diff
ferent countries and between sections of
the same country. As universal meas
ure of value, they are commercial nee
essity.
A WAR ON A SPECIE BASIS
If the war could have been prosecuted
on a specie basis, there would doubtless
have been considerable advance in the
price of those articles which are in de-
mand by the Government; but inasmuch
as in the condition of dur political affairs
extensive credits could not have been es-
tablished in Europe, the tendency 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 of the advancing
prices in the United States On basis of
paper money, for which there is no outlet,
all articles needed for immediate use, of
which it is the measure of value felt and res
pOnded to the daily increase of the cur
rency SO that rents and the prices of most
articles for which there has been de-
mand, have been, with slight fluctuations,
constantly advancing from the commence
ment of the war; and are higher now, with
gold at Al per cent. premium, than they
were when it was at lS5. Even those
which were affected by the fall of gold
upon the surrender of the Confederate ar
!.
ished demand, are advancing again to for
mer if not higher rates. The expansion
has now reached such point as to be alb
solutely oppressive to large portion of
the people, while at the same time it is
diminishing labor, and is becoming sub
versive of good morals.
There are no indications of real and
permanent prosperity in our large impor-
tations of foreign fabrics in the heavy
operations at our commercial marts; in
the splendid fortunes reported to be made
by skilful manipulations at the gold room
or the Istock board; no evidences of in
creasing wealth in the facts that railroads
and steamboats, are crowded with passen- |
gers. and hotels with guests; that cities !
are full to overfiowiDg, and rents and the |
prices of the necessities of life, as well as |
luxuries, are daily advancing. All these |
things prove rather that a foreign |
debt is being created, that the number |
of fnon-prpducers is increasing,and that pro- |
daeti~e- industry 10 being Diminished. I
There is no fact more manifest than that |
the plethora of paper money is not only |
undermining the morals of the people by |
encouraging waste and extravaganza, but
is striking at the root of our material pros
perity by diminishing labor. The evil is |
not at present beyond the power of legis-
lation, but it is daily increasing, and, if |
not speedily checked, WILL at no distant |
day, culminate 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 reduc-
tion of the currency.
RECOMMENDATIONS.
The Secretary therefore respectfully but
earnestly recommends
First. That Congress declare that the
compound interest notes shall cease to be
legal tender from the day of their matu-
rity.
Second. That the Secretary be author
ized in his discretion, to sell bonds of the
United States, bearing interest at a rate
able and payable at such periods as may
be conducive to the interests of the Gov
ernment for the purpose of retiring not
only compound interest notes, but United
States notes.
1t is the opinion of the Secretary, as has
been already stated, that the process of
cannot be injuriously rapid
and that it will not be necessary to retire
|
two hundred millions of United States
notes, in addition to the compound notes,
before the desired result will be attained.
But neither the amount of reduction, nor
the time that will be required to bring up
the currency to the specie standard, can
now be estimated with any degree of aceu-
racy. The first thing to be done is to
establish the policy of construction. When
this is effected, the Secretary believes that
the business of the country will readily
itself to the proposed
change in the action of government, and
that specie,payments will be restored with
out shock to trade, and without diminu-
ton of the public revenues or of produc-
tetv industry.
The national debt, deducting moneys in
the Treasury, was, on the 3lst of October,
1865, 81, 74O, 1854, 100. Without attempt
ing nice calculation of tho amount it
may reach when all our liabilities shall be
uovurTJefy ascerJafnef,- II seems safe to
it, on the lst of July, 1866, at
$4,000, 100000
The annual interest upon $4,000, ,OOO, 600,
if funded at 81 per cent. per annum, would
be $I65, 100000, but if funded at per
cent. it would be Sl5O,OOO, 600.
Now, if 5000, 600, 900 per annum should
be applied, in half-yearly instalments of
600 each, IN payment of the ac-
cruing interest and in reduction of the
principal funded at the higher rate of 81
per cent, the debt would be entirely paid
in thirty-two and one-eighth years At
per cent. per annuIn it would be extin-
guished by the like application of $780,
900, 900 every six months in little over
twenty-eight years.
AT the higher rate, the sum applied in
the first year in reduction of the principal
of the debt would be S35,OOO,OO0; in the
last or 32d year, when the interest would
be diminished to little over $9,OOO,OOO,
about l9l, 900, 600 of the uniform annual
payment would go to the reduction of the
principal.
On the assumption that the debt may
be funded at per cent, $4,000, 900 would
be applicable TO the reduction of the prin-