The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-04-02
MONDAY, APRIL 2, 1866.
The True Flnancial Policy.

the passage of the Loan bill. A return to
specie payments is, no doubt, generally desired
both by the Secretary of the Treasury and
Congress; but there is a difference of views
between them as to the best mode of secur-
ing the end contemplated. Some persons
deprecate too rapid contraction of the cur
rency, and wish to limit Mr.. MCCUI-
LoCH'S discretion in that matter; while he,
on his side, dsclaiming any intention to pur-
sue his object with imprudent haste, insists
that, in anticipation Of unforeseen emergen-
cies, his hands should be left free enough to
successfully dispose OF them as they arise.
The real truth is that this whole matter is
not so abstruse and difficult as might be sup
posed, and only requires to be dealt with
agreeably to principles OF practical common
sense. The primary condition precedent of
any sound Improvement in the finances of the
nation, is restoration of its trade and indus
try, as speedily as possible, to that general
state of prosperity which anteceded the Re-
bellion. The enormous daily expenditures
required by the war, compelled the Govern
ment to create paper currency equal to its
hCCSoolOlSS, dlN hOh Ollbb Wiz wa
has ceased and that drain On the Federal
treasury is stopped, the reasonable tendency
of sound flnar cial policy is to reduce the
national debt as speedily as practicable, and
at the same time to raise the value of our
Treasury notes to a specie standard as fast as
that may be done, either by lessening their
amount, or increasing the demand for their
use by extending the area of their circuIa-
ton. The latter alternative is preferable, be-
cause much more easy, natural, and practi-
cally beneficial.
The experience of the last four years must
have taught most persons the plain truth,
that paper issues, to be employed as money,
have a value relatively to specie in the pro-
portion OF the amount OF the one to the other
The mean OF par is reached at the point of
perfect convertibiity. When there is much
more paper ahoat than there is specie to alb
sorb it in the practical everyday transactions
OF business, the paper must decline below
par; and that process has been long visible in
the fluctuations in the price of gold, or rather,
to speak more correctly, in the shifting value
OF "greenbacks" relatively to the specie
standard.
But it must not be supposed that the effect
of which we are speaking was entirely or
mostly attributable to changes from time to
time in the quantity of the paper currency in
circulation. The result is quite as efectually
produced by lessaning the amount Of specie
in circulation as compared with paper; and
that mode of depreciating our Treasury notes
actually took place during the war to very
great extent, in consequence of the necessity
our merchants were under of shipping heavy
remittances of gold abroad, week after week,
to pay for corresponding importations of
foreign goods. No possible modification of
our tariff could have entirely prevented that
effect during the war, nor can exercise any
very decided influence in that direction for
some time to come, if ever. 1t is not for a
moment to be presumed that ouI people, or
their representatives, contemplate the abso-
lutte cessation, at any period in the future, of
all trade whatever with foreign nations. If,
then, foreign commerce with this country is
not to cease, the principal aim Of wise com
mercial economy should and must be to turn
and keep the balance Of trade in our favor,
and thereby oblige our foreign customers, in
paying the difference, to ship specie to us.
Gold and silver would then flow back to our
shores in the degree that we bring foreign
merchants and consumers in debt to us and
as our command OF the precious metals is
increased by that means, our paper currency
will appreciate in value and our power to dis
pense with its use, and therefore 10 reduce
its quantity. will grow in corresponding
measure.
But in order to gain the balance of trade
we must begin to produce and ship abroad
those great Southern staples in which we
paid before the Rebellion for the largest part
of our foreign supplies, and saved, by that
means and to that extent, the expectation of
specie. This unquestionably is the best and
surest panacea fol- all of our commercial and
financial difficulties, and every wise statesman
OF practical understanding and temper must
no doubt be aware Of the fact, and anxious
to adopt course which would certainly and
speedily be followed by the happiest results.
But industry and commerce in the South
cannot be completely revived until the final
settlement of those questions whose protracted
discussion in Congress postpOnes the read
mission Of the Southern States and people
to their practical relations to the Federal
Government. Hence it is that the solution
of the problem of reconstruction of the Union
is really more important in its bearing on
the industrial, commercial, and financial inte-