The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1865-10-19
The Condition and Prospect OF Oar
National Finances.

The Condition and Prospect OF Our
National Finances.
We agree with the Secretary of the Treasury
in the abstract principles which he expressed
in his Fort Wayne speech with regard to the
public finances. A redeemable and convertible
paper currency, just adequate for the healthful
demands of trade, and no more, is what I'VE
wish to see a. soon as ever we can be safely
brought to it, We would not prolong the
period in coming to that desirable end one
hour longer than is necessary to prevent
greater evils. If we differ with the Secretary
at all as to the manner and time of coming
back to specie payments or a convertible
paper currency we do not upon the principle
But his views may not be materially different
from ours on the subject of returning to specie
payments or contracting the currency. He did
not lay down any plan Of action, or state what
he should recommend Congress to do. He
spoke of contraction because the volume of
government currency is too large, but
"prudently," so as not to disturb seriously
the business of the country. How far he
proposes to contract, at what time and by
what means, we are unable to say. II he pro-
pose to withdraw and fund hundred millions
of legal tenders, or any proportionate amount
Of them, or other government paper used as
currency, as the issues of the national banks
authorized by law take its place, we do not
suppose any disastrous consequences would
follow. On the other hand, il there should be
a considerable and sudden contraction Of the
amount of currency in circulation we might
apprehend the most serious consequences
Every one must feel deeply interested in this
question; for any meddling with the currency
by the edicts of government may be felt
through all the industrial pursuits and ramifi-
cations Of trade in the country. It is a subject
which must be delicately and sklfully ham
died. A person whose ideas are limited to the
transactions of q banking house cannot grasp
it. The subject of national finance is a pro-
found one. It can only be understood
thoroughly by those who have the qualities Of
mind and historical information of q statesman.
We should not look to the present only, or to
the temporary expedients for the day. but to
the future, in any action we may take with
regard to our financial condition.
{ With reference to the question Of contracting
the currency it will be well to bring the light
of history to bear upon it. We may learn
something from that Though our situation is
anomalous, and though there is no parallel in
the life of other nations to our own, there are
certain general principles which apply to all
alike.
Alison, in his History Of Europe, speaking
of ancient Rome, says:-"The great contest
between Rome and Carthage, which Hannibal
and scipio conducted, was determined by
decree Of the Senate, induced by necessity,
which postponed the payment Of ell obliga-
tons Of the public treasury in specie to the
conclusion Of the war, and thereby created an
inconvertible paper currency for the Roman
empire" This has been our case in the gigan-
tic war we waged to suppress the rebellion and
to preserve the Union. But mark what the
historian says Afterwards" Rome itself, saved
in its utmost need by an expansion, sank in the
end under still greater contraction Of the
national currsncy."
The history Of France during the revolution
ary period finds no parallel in this or any
other country. But, however exceptional it
may be in other respects, Frspce experienced
similar fate in AnaKcial distress as other
counties, only in much greater degree, from
a CONTRACTION Of the currency, after having ex-
banded Il to an Unparalleled extent In 1896
the quantity Of assignsts In circulation was
ten thousand millions Of dollars-more than
three times The amount Of our present debt.
Paper fell to thousandth part Of its nomf-
nal value. This was contracted by the issue
of mandats, one mandat being equal to thirty
assignats. Before many months the naandats
we're at nearly as great discount as the old
assignats. In July, 1895, II was declared that
the national domain should be sold at the cur
rent rate Of mandates, which put an end to
paper credit, amidst such fearful suffering as
the world never witnessed before Indeed, the
whole Of this period of attempts to contract
the almost limitless currency was one OF the
most unexampled suffering.
The history of England, in its financial dim
culties growing out Of the long and expensive
war with France, from the end Of the eighteenth
century till 1914, is more to the point and
more like our own. Specie payment was sus-
pended in 1896 by order in council, was re-
newed by acts Of Parliament at different
periods, and in November, 1907, II was con-
tinued till the conclusion Of a general peace.
The obligation Of the Bank Of England to pay
in specie was never again imposed I'LL Mr..
Peel's act in 1919, was passed. During this
period gold rose TO a higher premium than
it now commands In the United States; but BY