The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1868-08-07

renee of war or panic in the European mar
kets. No matter how healthy our move
ments towards specie, sudden fright might
be produced there by causes not to be con-
trolled in America; and would result in
rapid and large depreciation Of our currency,
as indicated by the premium on gold
But such panic would not be OF long dura-
ton. In 1866, when the war broke out be-
tween Austria and Prussia, New York was
suddenly drained of thirty million dollars in
coin. Gold rose nearly thirty per cent. But
the evil soon corrected itself. War in Europe
did not really injure confidence in the credit
of the United States. 1t was felt at once that
gold was too high; as soon as the first fright
was over our bonds were in demand again,
and gold declined, though slowly, until the
end of the year, when the premium was
lower by seven per cent. than at the begin
ming.
This experience confirms what reflection
would indicate, that a panic in our bonds re-
sulting from any merely European cause can
not ipjure our currency seriously, nor for
long time. In any given condition of the ma
tional credit, gold will be taken hence to Eu-
rope SO long as it is in greater demand there
than here; and sudden stringepcy there will
necessarily draw a supply from us, until the
price of gold here shall be high enough to cor
respond to the demand abroad. Beyond that
point it cannot 60.
that the premium on gold cannot, by dis
turbance of the foreign markets be forced for
time beyond it. But the crisis OF 1866 has
unquestionably had great influence in
Europe in extending and strengthening con-
tidence in American securities. Were our
condition as strong and as hopeful at home as
| it then was, it is certain that such a strin-
gency as was then felt in England and Ger
many would affect us far less than it did them
| The people throughout Europe have been
rapidly learning to trust the United States,
| and that trust is now harder to shake than it
| ever was before.
| But we are subjecting their confidence in US
to severe trials. We are quietly postponing
return to specie payments; and apparently
acquiescing in permanent failure to meet our
obligations. We are openly discussing, as
| political question, the propriety OF repudi-
| ating our debt. We are giving utterance,
through our leading statesmen, and even
through Congress, to the crudest and most
worthless plans-now for paying our debts
without bearing the burden of them, and now
| for evading them in part or altogether. And,
to crown all, we are exhibiting in our own
markets deeper distrust, either of our ability
or Of our disposition to be honest, than
Europe is ready to entertain.
! Here is the really weak point in the situa-
/ tion. 1t is not in the commercial relations OF
| the country so much as in the financial policy
of the Government. 1t is not in the danger
| Of panic abroad so much as ia the certainty of
| distrust at home. Were there no question
| anywhere Of the determination of the United
States to meet its obligations, or of their wis
| dom in the use of their resources, our bonds
might still be shipped by hundreds of millions,
not to pay for luxuries only, but in exchange
for real capital to build railroads and to subdue
| the wilderness.
| But although panic in Europe from Eu-
| ropean causes could not seriously harm US,
panic there from distrust of our credit might
| overthrow our whole financial system. 1t is
such panic which our long delay in returning
| to specie payments renders possible. It is
| such panic which is now threatening us, and
| the vague apprehension of which is the chief
support of the steadily advancing premium on
| gold. Should 1t once become probability in
| the minds of our European creditors that the
New York repudiatiOn platform may be sus-
tanned by the popular vote in November, there
would inevitably be general struggle among
| them which could first turn their bonds into
real money. No man who has any knowledge
of the subject will believe it possible that
| Governor Seymour should be inaugurated
next March, with gold at as low figure as
the highest that has been reached since the
| war. ....... -.r. ..
The true obstacle to resumption, then, does
| not lie in the mere fact that eur bonds are
| largely held by foreigners. Were our cur
rency sound Europe might hold them all
without endangering us. 1t is not correct to
say that the exported bonds make it unsafe
to resume payments, but rather that our fail
ure to resume makes it unsafe to export the
bonds. The remedy for the whole evil is in
restoring the currency and building up our
| credit.
Let the currency be gradually contracted by
the substitution of interest'bearing notes for
the greenbacks. Let gold contracts be made
| legal. Let banking be made free, with the
issues secured by deposits of bonds sufficient at
the market rate to redeem them in coin, with
a margin of ten per cent. These simple msa.
sures, as the Eveaing Post has repeatedly
proved, would bring us back to specie pay
ments in from three to five years, unless inter
rupted and delayed by a crisis in Europe OF
unusual severity. But above all, and as the
condition not only of resumption, but of avoid
ing sweeping and speedy calamity, let the
nation show its determination to meet all its
obligations in "uttermost good faith"