New-York tribune., 1868-11-10


- oduced political economy to science, ana WIN
nav ,.o,,e in seven seconds that all known imam
80 ore fools and that he alone understoOu liio ''
,, Of money and how 10 deal WIN the h"''Oi,'
am He was out at elbows. greasy, lur%S So
I'll hair uncombod, linen unwashed' HIS poN'
,ook lined with board bills. and his Draih lao'i'ns
,,ndor double attack of Adam Smith anu 'no 'o,
Zoo of which we thought the effects OF Au'.in i''"
o, "eo, ~, the whole. the more painful We have wit
osed the avatars or incarnations OF TINS 'lshu Vi
FINANCE very frequently during the past nVe years
"a olr,vs with the lugubnous interest due to the
rr;ol of a personage who gives nine indications i'll
.a tbat he is a madman, and the tenth that he Is
,ronbet The latest avatar OF the Spirit OF flnahce
.otes known its revelations in this httle Voiuine'
lis doughty and not doubtful. 1t scorhs uhceI-
.e;n.,, and hesitation In all the positions taken It's
author assures us with profound dignity tha' no 10
.cock sure and yet that person mas hau 'ne
wisdom TO conceive or has the brains 10 app'e
bend his position There is disagreeaoieheos
about writing books for the next generation 90
few of the present day may appreciate the'h 'N"''
serchance, copies may remain over loi tnoso n0
will Tn the hope to aid in rescuing Mr. Potter
book from the oblivion to which the indifference Oh
this generation would cOnslgn 1t, we preserve us
essential points By adding the amount OF the de-
nosts in hanks 1856 800 4S0 to the amount OF legal
tender notes National bank notes, and State pahK
notes usnalv styled currency t$65441.%3l lie estl-
mates our paper currency at $l2l0Sn,413 Deduct
ing the lepaltender OF the banks ana adu-
ing the deposits in State banks and the gold currency
IN use in California aud Oregon, he arrives at total
currency of S91 577, which estimating ourpopu-
laton at 3j O0O00 is equal to per capita circulation
Of $40 in currency value He then assumes that the
actual or gold value of our entire currency IS no
greater in 1868 than il i'll lSGO and that our entire
currency Including specie, circulating bank notes,
and deposits) then amounted to $l71,960,000, and
hence that this is the actual gold value of entire
currency to-day; that our greenbacks though
Relljng in the market for rs cents in gold per
dollar. are really worth only SS cents, and that the
fnre-al for our financial diseases is simply TO ex-
,banee and redeem our present currency at 80 cents
per dollar The first objection TO this theory Is, that
like the Catholic miracle of transubstantiation, II
asks us to accept hairsplittng hypOthes.s against
the evidence OF our eyesight we See our greenbacks
10 he worth in gold in the market Is. That is all the
evidence we con have that they, or anything else,
has any value whatever. Theories are admissible to
explain why known facts are facts but not to prove
known facts to be falsehoods The value of a green
hack is a material fact TO be determined by observa
ton. not a theory to be deduced from argument. If
Mr. Potter can argue himself into the belief that
greenbaeks are worth only 80 cents IN gold, he VIII
.e us what he has at that price. If he cannot per
,nade himself of the truth of such theory why
print book to persuade Others of what he himself
Goes not believe. But Mr. POtters facts are lmpeT-
feet The total amount of what he classes as curen-
cy in the United States January l, 1861, was as
follows:
Circulating banl, notes 2o2OOs.7c7
ACKNOWLEDGEMENTS. 257 229,562
specie estimated by Secretary Chase in
his report for lSGl)..- 2I5,oOV,ot0
Total. .....-- -s1ji,255'329
This important addition of the specie in estimating
the total amount and value of our currency in lS6
would raise the present value of our currency t.
about 55 cents the dollar, according to Mr. Potter
own worthless mode of argument. But, in fact, tn
principal elements which determine the value O
our currency are nowhere referred to in Mr. Potter
N book Our Legatender act levels the value OF a
private debts to that of the egatenders, dollar
. dollar. They are worth only that in which they al
redeemable. Our National Banking Act does the san
thing for the bank notes issued under that system
Being redeemable in the legal-tenders, they can b
worth no more than they Thus the entire money o
account on which business is transacted depends TO
its value ON the value of the legal tenders
What determines the value of the lega
tenders They are the promise of th'
Government without interest, to pay money
at an indefinite time. If the Government owed nc
other debt than these legal tenders they would be
worth par. But in addition it owes s22O0OOOOOO OF
bonds and these, forming the main bulk OF ITS debt
are the criterion which determines the value of all
its promises as the hight of the water in a large
reservoir will determine its hight in a smaller one
which is subteTraneousy connected with it. The
promise of Government without interest must bear
aneary fixed proportion to its debt due time with
interest This we see to have been true. When ON
bonds were worth only 40 cents on the dollar in gold
tbev ,ere stlI at from IN - cents above par in cUr-
rency Just as they are now. Our bonds and
currency rise and fall in gold value pdri
yassa and our bonds must come TO par IN
gold before any currency based the credit
of the Government can be redeemable in specie
This dependence of our currency upon the credit OF
the Government Mr. Potter wholly overlooks; yet II
is the very gst of the matter He adorns his margin:
with the names of Mill Burke. McCulloch lthe Brit
fish economist), Adam Smith, Say, and other writer:
on political economy; but none of these had to dc
with legal-tender currency deprecated like ouI
own-not BY its bulk, but by the relation in rhich il
stands 10 national debt not capable Of being Immediately
brought 10 par. Mr.. Potters book commits the com.
mon error of applying the texts of buried political
economists Of England to conditions wholly different
from those which they discussed or acquainted
with. Hence his very natural discovery that the
men whom practical experience in the management
of our national finances has divorced from these
buried idols are all fools discovery which involves
the counter-agreement Of practical fnanciers that
Mr.. Potter has got nothing of any value to reveal
Many of the incidental statements in this book are
as seriously at war with common its main
position For instance on page 81. speaking Of gold
the author styles il " the cheapest currency that
human ingenuity can devise" and that its utmost
cost the loss of interest" AS if the loss of interest
not cost enough The annual interest on the