The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-01-02
Oar Present Financial Ceudition-Its Causes
and Oar Financial Future.

teen millions Of dollars with an internal
revenue system the administration OF which
eats up large percentage Of It's receipts, leav-
ing nothing for the Treasury except the bones
after swarms Of buzzard officials have feasted
and fattened, and with bold and bungling
mismanagement Of the affairs of the Treasury
itself, our financial condition is getting to be,
in the words Of Joey Bagstock, "topgh, sir
devilish tough" Commercial values have been
depressed below the cost Of manufacture by
systematically managed mistake on the part Of
the Secretary Of the Treasury, who has tugg cd,
Dennis like, at the halter Of contraction until
trade is throtled; q national banking system
which annually picks the pockets of the people
of twenty-five millions has been persisted in
and defended with the utmost official sophistry,
and the clamor for specie paymentsis still kept
up in banking and Official circles. The Score
tary Of the Treasury walks to and fro and up
and down, like Tom O. Bedlam in his cell.
and mutters-"Specie;" Comptroller Hurlburd
takes up the cue and repeats-"Specie;" every
Treasury official in all the land rolls his eyes
very carefully up into the top of his head, and
murmurs the slbilant dissyllable-"Specie;"
and the fact is maugre all this cant, that the
cause of all our difficulties just now is specie.
If the idea of specie had never entered our
heads we should be vastly better of. This,
and not the legal tender currency, as the
Comptroller has been at some pains to insist,
has been the disturbing element Of business,
and it is simply stupid to argue otherwise
Precedent, to be sure, is in favor of specie; but
precedent in This case, as in many others, is
fallacious.
History never exactly repeats ITSELF and
every age and phase of civilization has its own
political economy. There is no greater fallacy
than that a specie basis is essential to the
validity of paper currency The idea of un-
forms the basis of coin as we'll as paper, and
the whole theory based upon the notion that
gold must be made the ultimate measure of
commercial value is falacy. Both gold and
paper are necessarily representative-tho ugh
the latter is, perhaps moro uniquely represen-
tative of credit than the former. II that credit
| be absolute, then the value OF the paper which
represents 1t must be absolute also if it be
merely relative, as is the credit of banking
association, then the value and currency Of the
paper based upon it is merely relative and in
this lies the philosophy Of the distinction be-
tween greenbacks. which represent directly
the credit Of the government, and the paper OF
any ordinary banking house the credit of the
former being stable and solid, and that of the
latter being subject to sudden fuctuation.
Hence follows the superiority of national paper
for trade purposes; for with a circulating
money panic like that of 1857 is next to i'm
possible, while with a circulating medium
based upon the credit Of twenty thousand or
more OF banking associations panic is liable
to supervene at any time.
That this idea of basng currency upon the
most stable of credits attainable is necessary
to the prosperity of any commercial commu-
| nifty is sufficiently obvious. All trade is
founded upon it, and without flexible system
OF credits trade cannot exist; and that the
whole tendency Of business is in this direction
is quite apparent. Paper is and must be the
circulating medium of trade, and is and must
be, moreover, the representative Of the credit
system. Nor is there the least necessity for
any equality of values between paper and
gold, since the latter is now, and will forever
be, practically, commercial commodity.
Specie payments are not necessary to the pros
perity of trade, nor even to practical converti-
bility, which is the special hobby of Comp
troller Hurlburd Any one representative of
value is always convertible in form into any
other representative of value. Greenbacks
can be converted into real estate. into bond
and mortgage or into gold, at the will of the
holder. Convertibility in small sums, with a
paper based upon stable credit, is neither
necessary nor desirable, and the argument of
the Comptroller, though of no validity and a
trie stupid, is, in this respect to quote another
Of joey Bagstock's habitual phrases, "Sly,
sir-devilish sly"
Emerson would call the perfection of things.
We like stupidity, il it be only perfect stupid
ity, like that of joey Bagstock, who went
"to the bottom of things - and we cannot put
our hand upon our heart and say that this
stupid twaddle about "specie payments" and
"convertibility" at all dsappoints our ideal in
this respect The fact is, the question of our
financial future is simple enough and would be
the most manageable thing possible could off,
cials be induced to stop prating about pre-
cedent Practically, the old theory OF financial
economy, like Tyrawley, has been dead-dead
for years-and has let nobody know it and
the sooner certain notions which have been
pcrsistently taught are cut loose from the
better ii will be for our financial and CONNER
cial future. The true political economist de-
duces his system from the phase of civilza-
ton to which Il Is Intended to apply, nor will
the financial crudities Of the past prove sufii-
cient for the complicated demands OF the
present. We want more wisdom for the age