Delaware gazette. [volume] (Delaware, Ohio) 1855-1886, 1868-11-13
The Best Contraction.

ment of the controversy about the gay
ment OF the national bonds. It is the
resumption of specie payments. Let
the greenbacks be made equivalent to
| coin and no one viii trouble himself to
inquire whether the bonds are to be
paid in one or the other.
Resumption should manifestly be the
underlying principle OF our financial
policy and the pole star of all financial
schemes. How to resume, or in other
words, how to restore the public credit,
is the great problem now forcing itself
upon public attention.
The most noteworthy specific yet ap-
piled for the solution of the difficulty is
the contraction Of the currency, and it
is safe to say that its practical results
so far do not commend its efficiency
As the currency was withdrawn gold
increased in value and the financial
maIady was aggravated rather than re-
Iieved. The effect of this Proerustean
treatment was about like that of at
tempting to enforce symmetry upon
the human form by cramping il in an
iron bedstead. It is not meant by this
to convey the idea that contraction may
not be both necessary and wholesome
or that infatio is aughtsless than an
unmitigated evil. But tits meant, and
experience proves, that cont raction of
the currency is not an efficient means
of restoring public credit or giving coin
value to our paper.
Bonds and greenbacks are but differ
ent species of public promises, the val
ne Of which depends mainly upon other
conditions than the mere form in which
they are printed. Withdrawing the
currency neither makes the debt any
less or increases the probability of its
payment. Its volume remains substan-
TALLY the same whether in the form Of
bonds, certificates or legal tenders. The
credit of nations like that OF individu-
ais depends very much upon the
amount of their liabilities a matter
which reducing the currency can in no
wise effect.
Contraction proceeds from the assump-
ton that the price Of a commodity may
be cheapened by creating a scarcity for
that which has become its substitute
Gold has become an article of merchan-
disc and the contractionists would force
down its price by reducing the volume
of greenbacks its substitute. But as
green backs are withdrawn gold must
become more necessary and consequent
Iy more valuable and its price IS expand
ed rather than diminished.
Ifit be assumed that contraction en-
hances the value of our paper by re-
ducing its proportion to gold
it many be replied that this will
not necessarily produce such
a result. The proportion of gold to the
aggregate amount of our promises, and
consequently our ability to meet them,
remains the same. When a bank with
draws its circulation it reduces its LA
bilities, but not so with a government.
And besides the amount of specie in
the vaults of the banks, has seldom
been anything like commensurate with
the amount of their circulation when
their paper passed at par. Their credit,
or which is the same thing, the current
value of their notes depends nearly as
much upon their general reputation for
.soundness as upon their present ability
to pay them in specie.
Before the McCuIloch policy of con-
tracing the currency was commenced,
gold touched %. This was in 1866 when
we had 900 millions of currency in circu-
Iation. Now we have an estimated circu-
lation of 700 millions, and gold ranges
from So to 45. This leads to the inquiry
why gold came down without .contrac-
tion and went up with it. We think the
secret lies in this. Before contraction
commenced, and taxation was so enor-
mously reduced, we paid off over 200
millions of the bonded debt, and at this
rate We're in fair way to pay off the
whole OF it in less than twenty years
Under this regimen the public credit
improved, the promises of the govern
ment appreciated in value and gold de-
clined. We were in a fair way to reach
specie payments steadily and without
shock, in a reasonable length of time.
But with contraction came the whole
sale reduction of taxes, and for want of
revenue the good work of paying the
debt had to cease. Our public securities
declined and gold went up.
We think this experience demon
strates that there is a better species of
contraction than contraction of the cur
rency. It is a contraction of the volume
of the debt and the rate of interest it
bears, together with Kindred contrac-
tion of the expenses of the government
The best way to improve our credit is
to pay our debts, and next to actual
payment the best thing is a manifest
Willingness and an honest intention to
pay them. We cannot demonstrate
that intention more effectually than by
carefully husbanding our resources and
emphatieally notwithstanding all
forms of repudiation, whether partial or
total, open or covert. And whenever we
have the ability to pay, let US pay.
/ Contract our debts instead of the cur
rency, and our expenditures rather than
our revenues. With this policy will
come improved credit, increased pro-
duction, and in due time a currency
| equivalent to coin. We shall soon be
able to fund our debt in new loan at
three or four per cent, thus saving at
| least forty millions of the interest we
now pay as penalty for our damaged
credit. Such a policy,while it constant
ly diminishes the burden of debt, will
save to the country far more by honest
methods than can possibly be saved by
the various swindling schemes for tax
ing our own notes or paying them in
irredeemable promises.
The best contraction is a reduction of
our debts and the best expansion an
enlargement of our assets.
The Chase and Pope Murders
The New Orleans Advocate of Oct.