The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1869-01-04
Specie PAYMENTS,

ONbsh thc Vlu Dahhlub eystem VI thlS COuulEy
the periodical suspensions of specie payments
were usually, il not invariably, caused by such
arrangement of the balance OF trade as de-
pleted the American stock Of the precious
metals. Excessive importations of foreign
manufactures were continued under low tariffs
until the industrial interests OF the nation be-
came depressed, and large debts were due
abroad. The country merchants bought on
credit from the jobbers, the jobbsrs purchased
on credit from the importers and manufactu-
rers the importers negotiated as best they
could American notes to meet their foreign
obligations; and when the European demand
for gold became urgent, after our markets
were gutted with goods, shock was given to
the complicated credit system then prevail
ing, which soon led to suspension of specie
payments. As the bulk of the assets of the
banks consisted OF commercial paper, they
were compelled to refuse to redeem their
notes and checks in gold as soon as mer-
chants failed to meet maturing obligations.
The disastrous effect of excessive importa-
tions was, of course, greatly heightened by
deficient exports. If the cotton or grain crop
in European markets were reduced below the
average standard, our foreign creditors be-
came distrustful of their debtors in this
country, and in their eagerness to secure i'm
mediate payment they deranged our whole
financial system. 1t was common to trace
back the old suspensions to the failure of soma
particular bank or trust company, and to as
H. e,,I~s fa;I 30 &l,a
uplucky or unfavorable circumstances which
precpitated the first downfall; but those who
carefully noted all the influences prevailing on
such occasions, did not fail to observe that the
banks fell ''like bricks in a row' only when
the general prosperity Of the country had
been undermined by prostration of its
diversified industry, and by an unhealthy dis
proportion between its imports and exports.
The success of the manifold plans for re-
sumption of specie payments which are now
agitated hinges upon the single point whether
the export of specie can be arrested. II the
present stock Of available precious metals in
this country could be increased by an addition
of the products of the rich new mining
territories for few years, the supply of gold
would be amply sufficient to justify and main
tain resumption. The body of the American
people have full faith IN the disposition and
willingness of the Government to honestly
meet all its obligations, and but small
amount of gold would be sufficient to supply
the demand of our citizens for specie in ex-
change for promises to pay which were COM
monty held to be as good as specie, and more
| oh
however, are beyond the reach OF the legal
tender act, and they will never be content to
| receive greenbacks as a substitute for gold.
! If we continue to Contract debts abroad at the
rate of one hundred million dollars or more
| per annum, we must either pursue the suioi-
dal policy of increasing the permanent foreign
Indebtedness represented by stocks and bonds,
or make large exports of the precious metals,
and thus postpone the period of resumption.
The difficulty can scarcely be overcome by
any single remedy. II will require the COM
bination of variety of favorable Influences
Congress cooperating with the people, legisla-
tion doing something, and economy, industry,
and favorable seasons still more. II the people
cease to waste their substance for foreign luxu-
ries; If American goods and wares are generally
substituted for o:eign fabrics; if the exports
of petroleum, corn, cotton, flour, wheat, pro-
visions, and other perishable articles are
largely increased, and il the balance of trade
is turned in our favor, almost any plan OF
resumption may be safely adopted, and re-
sumption will then indeed become the true
way to resume.