The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1865-12-06


States securities. ........... 427,13i, 600
- sofa, 045 500
DANGEROUS FINANCIAL CONDITION COUNTRY
These figures history in themselves, exhibiting
only past and present condition OF tho country,
in matter cdins interest but indicating uncr-
rney the dangerous direction in which the financial cur
rem IS sweeping.
1t Of January of the memorable year 1887 the
bank note circulation Of the United States was
$l49 lsj $780, the deposits Sl27 1877 000 the loans
S525 lis 600 In January, 1857 the year of the xt
grea: crisis the circulation was the depos Is
$3.50 COO the loans 1854 000 TIL re are no
statistic t. exhibit the amount OF spcce actually In cir
cua,ion In those periods but would be liberal cs
u 1t at $50 0O0 for 1887, and $4,000 700
Tor 1857.
These were years great inaton the effects OF which
have been already referred ohe revuision Of 1887 not
only producing great immediate embarrassment, but .
prostra on which continued until 1S43, at the m
incnccn mt Of which year the bank note circulation
Cd only T. s5S, ,0o0 deposits TO $50, los, 900
osns S25i,541. 900; flour having cncd in New York
from rs per barrel on the Ist Of January 1851 10
50 60 The Isl of January, 1S43 and other articles in
The reaction IN 1857 severe but, for the
before q d. less disastrous and protracied
On tn Joth Of september last the deposits 81 the ma.
oansestihia'ing their national sec rites as loan
to the government-to $el3,Oa5, 629; both Of
which items must have be II increased during
the month Of October; while on the 3ist
thai month tho circulation, bank and national, had
reached the star ling amount OF upwards $7OO,O0O
600. Nothing yond this statement is required to ex
abt the present imitation or explain thc ca scs OF the
current and advancing prices. II disaster followed the
qucnces Of the present expansion unless speedily
checked and red ccd !.
Ii IS undoubtedly true tina. trade Is carried much
largely for cash than the case previous to
1861 and that there is n much greater proper demand
for money than there would DO II sales were made Us
hereto ON credit II also true that there Is
larger demand than formerly for money on tho part Of
manufacturers for the payment of operatives But
making the most liberal allowances for the increased
wholesome demand arising from these and IRON
the advance OF the country In business and population
Is apparent from the foregoing statements the ad
t.riea .i,I u0f bp
latng medium OF the country Is altogether excessive
onIEcTioas TO REDUCTION OF TIE CURRENCY ANSWERED
Before concud ny his remarks upon this subject II
may be proper for the Secretary at the expense Of
repetition, notice briefly some OF the popular and
Frs.-Tnat, by reducing prices 1t would operate in
juronsly, If dsastrousy, upon trade and be quite
likoly Ia prccipiatc financial crisis
To this IL may be replied that prices OF articles OF in
dpcnsabe necessity already high TO be severely
oppressive 10 Consumers especially TO persons Of liked
ami moderate incomes and the poorer classes Not
only do Interests but the absolute necessities Of the
require that the prices Of articles needed for their
~ should decline
that Congress may adopt rapid reduction Of prices
produce very serious embarrassment 10 trade The
tcnt, be Withdrawn by a sale OF bonds and the demand
for bonds will be affected by the state OF tho market
that a rapid contraction will be diicat II not mpoesi
Bile. f desirable There Is more danger to be
apprehcnded from the inability OF the government to
reduce its circulation rapidly enough than from too
rapid reduction u it. II Is, in part, 10 prevent inan-
cal crisis that is certain to without it, that the
Secretary ommcnds contraction. Prices are daily
advancing. The longer contraction - deferred the
grcn must the TALL eventually be- and the more serious
will lie consequences II Is not expected that return
specie will bring prices back 70 the standards
OF former years The great increase OF the precious
metals ard high will prevent this but this consid
crniion makes 1t the important that all improper
aud unnecessary influences In this direction should be
removed.
Again IL is urged that a contraction OF the currency
would reduce the public revenues
1t is possible that this might be the immediate effect.
but II would be only. The public revenues
depend upon the development OF national resources
upon our surplus productions; IN other words, upon
labor Tho derived from transactions based
upon fats. standard OF value or from interests that can
oly flourish in speculative times, are not those upon
which reliance be placed for maintaining the public
credit What healthy and reliable business requires Is
stable basis This II cannot have rs long rs the coun
try inflicted with an nconvcrtbie currency-he value
which well the value Of the vast property which
measured by It, Is uctuatng and unreliable, and may
be in small degree controlled by speculative combi-
nations
II is also urged that the proposed policy would
danger the public credit, by preventing funding; and
that Il would compel the government. and the people
who In debt TO In acarer currency than that In
which their debts were contracted.
The Secretary s unable TO perceive any substantial
the process OF funding Is likely be aided BY the
tnuancc o prices thor present high level how the
credit Of the 70 be restored ey the perpe
currency consists largely Of It's own notes While Is
hoped that early provision will be made for the com
menccmcnt of tho reduction Of tho national debt, an
carly payment of II Is not anticipated. Nor Is under
stood that those who apprchensve OF the effects Of
contraction entertain the opinion that the present cond
ton things should be continued until any consdora
bic portion of this debt shall be paid.
30 far as individual Indebtedness Is regarded II may DO
remarked that the people Of the United states II not a.
tro from debt they were six months ago, are much
hess In debt than they have been In previous years and
altogether less than they will be when the inevitable day
q payment round " the volume OF paper money
Is not curailed financial policy which would prevent
the creation II debts and stimulate the payment OF those
already existing far from being Injurious would be
in the highest degree beneficial
further urged that reduction OF the government
notes would cnbarrass the national banks II II did nos
force many OF them into liquidation.
To which II may be said that II Ia better that the
banks should be embarrassed than bankrupted
hereafter Thor business and their customers now
under their control What will be their eondt0n In
these respects II the expansion continues and swels
year or two longer ~ not difficult TO predict. While
there has been no unhealthy expansion Of credits In the
United states Tor which the banks have not been largely
responsible there has been by which they have mot
been ultimately the losers Unless their sentiments
misunderstood BY the Secretary the conservative bank
ers Of the country are quite unanimously IN favor OF
curtailment OF the currency with view 70 an early 70
turn 10 specie payments.
Again Il Is said that the excessive bank deposits have
a. much influence In creating and sustaining high prices
q superintendent currency. This Ia unquestionabIy
true but also true that excessive deposits are the
effect or excessive currency and that whenever tho
rency IL reducf there will be- at least corresponding
ofd