Delaware Republican. (Wilmington, Del.) 1843-1874, 1866-01-11
For the Delaware Republican.
WILL THERE RE A CRISIS.

inete appears 10 Do singular eenumout
prevailing, that the abundance Of money 10 an !
evil Now, money is synonomous with CAPT I,
tai, because it is the representative OF accumu-
lated labor Can there be too much capital
in a bation7 Capital naturally seeks invest
meat to profit, aud thus again gives employ
ment TO labor or as we say 10 @ general increase
Of business. Consequently the greater the iu-
crease OF capital, the more business 10 done
and the better 1t 10 for all parties. II is a
great mistake to consider gold and silver the
only money. Anything 10 money which 10 the
common medium Of exchange for value re-
ceived. What this will be at given time or
place, Is regulated by the material qualities
of different substances. Whenever there Is a
sparse population or general insecurity,
gold and silver are the most suitable sub
stances. This was illustrated in the earlier
history OF the world. But 10 modern civilized
States, paper has been found more suited to the
\ wants aud needs of trade. Trade when let
alone will regulate all the things for itself All
it asks is security and protection. 1t ia the
duty of governments then, TO go with and not
| to counteract these natural tendencies. Any
at.empt then In the present age of the world,
| TO make gold and silver the only money 10 in-
furious. That paper Ia the most convenient
aud suitable substance for modern money 10
shown by Its universal use, the metals, even
during specie payments, being chiefly held
as security for the paper. We're specie pay
ment resumed to morrow very few would use
| the metals. II has been generally received
that gold is the standard Of ali values. I
| think our recent experience would cause Its
most ardent supporters to doubt the validity
Of this doctrine. Ii cannot be 100 strongly
urged, that supply and demand are the only
| regulators of value. The abundance of any.
thing, withouts correspo ndiug increase of do.
wsud, lessons its valae in comparison with
other thpgs, and gold is as much regulated by
| this law as anything else. So an increased
demand for any article, without an increased
supply will raise its value or price. In euch
case the tendency is to produce more OF such
article, till the cost Of producing it corresponds
with other values. Cost meens time and Ia.
Dor The price of commodities In general, un-
der the stimulus of Increased production, will
soon assume their natural standard, but gold
will continue high IS long as 1t is scarce, that
is in the hands OF few who will make the
most of it. But no one has a right 10 put up
the price of goods because gold Is up, nor can
such fictitious values be maintained. Now let
US apply what has been said to present co ndi-
tons. 1t is held In high financial oircles that
the abundance OF money, or as II 10 mostly
termed, expansion Of the currency, is necessir-
lily followed by q commercial crisis or crash
Secretary McOulloch takes this view and illus-
srates bis position by referring to the disasters
| Of 1887, al and ST, There is really but little
analogy between the cases cited and the pres
ent time. Expansion Of the currency it is
true, is common to both, and that is ALL But
the causes of expansion were widely different.
For the one case 1t was caused By an extended
Increase of loan, which, being followed by
prosperity, induced still further extension, Of
ten i'll prudently, until debt became abundant;
then necessarily came the crash. In the other
case 1t wss caused by money paid for value
received, attended with less debt than usual
among the community. have shown that
properly stamped paper is money. During the
years OF war tho Government stood In the re.
iation OF new customer, spending profusely
and paying mostly cash, and causing, not a
iancied, but real commercial prosperity In
mat part OF the country which was not the seat
of the war. The effect on prices would have
| been much the same, had some foreign custo-
mer in the same time speut the same amount
| Of money among US. 1t is the abundance of
debt, and not the abundance of money, that
Is an evil, and will produce a crisis. As the
amount Of personal debt 10 said to be much
| less than common, there can be no crisis The
Secretary proposes to reduce the volume of
the currency, by Withdrawing the legal tender
aotee. can see nc good resson Tor so doing
| nor eIectly how be can do it. 1t will not re.
| duce the volume to withdraw one kind aud
issue smother. de cauaot take legal tender
from man without giving him an equva ient,
and Ihat equivalent must be transfer able anu
therefore money. If be gives it in the form Of
bonds, he makes ii en- interest bearing debt
thus increasing taIes. The community asea
n" more money than is required Tor the pur-
pose of commerce. The raie of interest is this
| real lest OF the abundance of monsy, and ..
that rate is high enough at present, any new
customer in the Market would tend 10 raise IL
and produce injury. AS there seems to be an
increasing demand for all the money 10 circu.
lation for profitable investment, in productive
industry, think II would be injurious to
withdraw it from these channels; and CONVEX
II into interest bearing debt
ECONOMIST,