The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1867-05-30
FIN A N CIAL.

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- oS"~' - Nv.
FIN A NJ CIAL.
Tho Evils Of Metallic Currency shown In
the Past History Of tie United Stntes-Ad-
vantnses Of Paper Money.
TO THE EDITOR OF TIE HERALD. es.
The circulating medium Of nation " TO the political
body, what tho blood to the human body Ar in the
latter case health and yigor are tho results when tho
circulation free health, and regular and progressively
increasing with the growth Of the Frame so 10 II
in the political body when the national circulation 10
proportonae to the public requirements and IN free
healthy and regular movement Subject the circulation
In either TO inadequate supply or 70 irregular
action, and sickness distress Is the consequence.
Subject total obstruction, and death must ensue In
tho case, and national bankruptcy in the other
The national OF tho United States are practi
cay ,mitable, and the energy OF her people is untr
ing but those resources and that energy however great
| may be for umo impeded and paraiyzcd by any
wooden headedness the management Of the circulate
| ing medium.
We, therefore, think that IL will be both interesting
and instructive TO offer remarks relative 10 our
monetary policy the years lsl217 1887 and 1885, and
cndeavor dcduce thcrefrom lessons to guide
| at the present most critical period.
WAR WITH ENGLAND IN 1872
When the war broke out between this country and
England in 1912 great portion OF the banks in this
country suspended specie payments. During that war
the paper currency increased about nifty per cent.
AND It's value, compared with bullion deprecated
about twenty per But ignorance that time
Of the real Of this difference It determined by
the bankers, at their meeting at Philadelphia in Janu
ary 1877 70 simultaneously specie payments at
mint prices all the Unions which II
supposed would be greatly assisted by the importation Of
large Of bullion by tho newly established
United States Bank This course followed by such
contraction Of their issues tho part Of private
bankers occasoned great and widespread mmsrcia
Distress Debts contracted in the deprecated currency
became suddenly payable 1t their par value while the
facilities usually obtained from the bankers for thor
liquidation a. suddenly stopped by refusal
Of discounta This distress was 10 degree
mgated by partial Of specie payments, which
OF the banks availed themselves of avoid the
expense OF being obliged 70 every commercial
demand for specie Very shortly after the opening Of
the United States Bank, 1915, the directors found
themselves under q continued necessity Of this kind
CAUSE OF TEE SUSPENSION OF CASE PAYMENTS At rms
PERIOD.
We win endeavor 70 show that suspension Of cash
payments was the inevitable Consequence Of taxation
levied on commodities and that properly understood
and provided for the difference between paper and gold
which occasons IL q desirable condition for the pro-
ductve classes as afording them the best Of
being relieved from those burdens which the first
thrown upon them for IL could not be the in
tention OF Congress that taxes levied certain CON-
mobiles should be paid out OF the profits capital or
Of the persons who trade in produce those par
cuar GOODS that by being added to former prices
the axes levied shonld ultimately fall tho consul
Of all commodities President Jackson recognized
this truth his farewell address to Congress- Narch
1887 when SAID 'The imposed goods enhances
by so mucn the price OF tho TO tho consumers
and as many Q, these duties are imposed on articles OF
people, the scd by these imposts Is drawn from
their pockets or rather y should DO said, Is drawn
from tho pockets Of the final consumers Of those
modtcs which produced by tho great body Of tho
people But here great question arises How are prices
than Is compatible with the vauo OF gold silver
commodities in transactions Of barterf II certain
arc!obe worth say dollar in unaxed country, and
burdens imposed the producer OF II In that
country when taxed, as render III necessary that he
well remunorated as before how is he 70 be occurred IN
tho receipt OF this sumY There are but three WAYS
Whereby IL can be done First 70 hedge in at
enable it to pass cnrrent for less than
rs real value as commodity, whsreby
ton price addition 10 It's equivaency in barter ~ the
metallic value, o., secondly, 70 let money OF gold and
principle Of natural value, while prices plus taxation,
represented In paper currency. which exchanges
on the whole TO return producers they pad
10 advance for consumers Or, thirdly, 10 reco gold
|
as reduction or increase In the amount OF taxation
calls readjustment Of the numbr OF coins which
make up IN weight the metallic value The arst plan,
that OF hedging In the specie, would require the enact
OF laws against taking Coin bullion out Of
the country such were tho disgrace OF the English
statute book In earlier times and these would be
found Insufficient, they then Tho second
above mentioned, viz: allowing gold and silver TO nnd
prices, Plus taxation. are represented BY
paper currency. leaves the natural relation Of
all commodities TO each other undslurbsd Wheat, FOR
ms 40
the rate OF taxation requires dollar and half. the
difference = made =, up By allowing O gold and silver a:
paper money 1t the which is found TO DO their
ket price; and, Eith properly controlled paper cur.
rency this price will always be found 10 include exactly
that additional which 10 Necessary TO the pro-
ductvs classes with another, their previous taxa
Whatever Be the degree Of taxation that price only viii
all times bs demanded for II which absolutely need
cheapest commonly BY In. third plan q change in
the size OF tho coins taxation may be represented in
prices bu. who would think Of undertaking The arduous
often a. change In the amount Of taxation should
render the operation necessary In addition 10 tho
what inconvenience would the people while the
proccss was going onf Suppose IL however, accom-.
been obtained Without trouble. expense nconven.
snce BY means Of . tan representing paper money!
srsrnyaos OF eAsu rAyxEsrs y 1881.
tx and eon sSu distress in lsT We will now pass
S %.s e ~ ne .ss s sas
panied or soon followed by corresponding increase Of
sales England and the difference accordingly became
payable In specie. This caused demand for the
prsc.qus metals from the banks Of the United states,
Which ended In he seksral srpsnsion Of specie pay.
msns the States In Nay, 1887 Blu, though tho banks
were compelled to decline paying IN specie .. Mint
prices they capable OF taking their notes in specie
q the market price, which from ten 10 twelve per
cent higher than Mint prices The extraordinary
scarcity Of money had almost put stop 70 business.
and discounts nearly a an end Things could not
continue 10 that position, and Wa had TO an
extension OF the circulation by It's depreciation, which
relieved the pressure considerably BY enabling the banks
70 discount freely, and thus give 20 merchants the
means 70 provide for their engagements.