The workingman's advocate. [volume] (Chicago [Ill.]) 1864-1877, 1870-07-09
SECTION /.

oBJECIIuRs ~ PAPaR cuARKECY ON ACCOUNT on FOR-
EiGN TRADE CONSIDERED.
When the adoption of & paper currency
within our own limits is advocated, ques-
tons arise concerning the adjustment of our
debts with foreign nations among whom
gold ana silver IRE the only legal tender.
Great embarrassments are apprehended be-
cause our paper money would not be re-
ceived in payment of debts contracted and
payable abroad.
The exports and imports Of the United
States are nearly equal; probably our
whole exports do not amount to more than
a twentieth part, or five per cent of the
yearly productions of our labor. Certainly
the disposal Of five per cent Of or produc-
tons is not a sufficient reason for maintain
ing a metal basis for our currency, which
must inevitably affect the market value, and
disturb the regular and Just distribution
among ourselves Of ninety-fve p cent. Of
our productions. The chief object of
currency is to effect the internal exchanges
of products, with facility and justice Such a
one could not impair foreign trade, nor do
injustice to other nations. The following
illustrations will make it evident that the
use Of paper currency at home, instead OF
disturbing foreign trade would greatly facil-
itate it, Trade between nations is carried
on by individuals and not by governments.
The governments simply make the laws,
and fix the standards by which the value,
weight and quantity Of articles Of trade
are to be determined, as also the tariffs OF
duties on imports and exports. Individ-
uals, then, export or import goods as their
interests dictate, and receive tor them the
money in use where the goods are sold
For instance, importers Of goods for the
New \ FORK market, take in payment for
their sales the money current in the city
They do this when the banks pay specie
They did the same in 1887, when the banks
had suspended specie payments. If they
must remit the proceeds of the goods, they
buy cotton, or other produce for shipment
and sale abroad, or bills of exchange, or
specie, as may subserve their interest
English exporters to New York receive in
payment for their goods our current-snoney,
ard invest the money as they deem most
profitable. If we had none but naYcr
money, English ezDyftars to New YorI.
wa1ld seli Their goods f.. chr paper money
tuyng with TIE yfolaeI our products, BOT.
tVu, flour, VI tUUacco, or bills of exchange
on England or bullion. Or, they could
lend the money here as they now do and
purchase products for shipment to Englaud
with the interest, or relOan the intescst II
our paper money would bEv our own cali.
Goes and broadcloths, it,ice certainly would buy
English calic92tcs and broadcloths in ouI
owh I l1arAeI; There is no reason why VIC
so 1C.l 10 1fovide a currency to pay for tSc
products of foreign labor different from
that which pays for home labor.
If VIC import fifteen millions more thar
we export, this balance will draw interest
against us until we can pay it in specie o.
products. If State or United States stocks
be sent abroad and sold to pay the debt, il
is still form Of credit for which we must
pay the interest. There is certainly no
greater necessity for our Government 10
provide means for our merchants to pay
their debts to foreign merchants, in such
cases, than to provide means for southern
merchants to pay their debts to eastern
merchants, in cases of a partial failure Of
the cotton crop. When in any year south
ern merchants buy Of eastern merchants
more goods than their crops will pay for,
the latter must wait for the next crop, mean.
while receiving interest on the amount due.
Ii our Government maintains a currency
which a balance Of imports over exports
demanding a shipment of specie must
necessarily deraDge, and subject debtors
to eztravagant rates of interest, this legal
act must cause greater loss 10 the people
than the failure of the crops which would
turn the balance Of trade against them. The
only embarrassment which could occur in
our foreign trade, from the use of paper
money, would be delays in payments when
the exports should exceed the imports and
the occurrence even of this would be rem
dered much less probable by the use Of pa
per money, at low rate of interest, than it
is with our banking system, and high rates
of interest. The greater facilities afforded
to production would yearly save an immense
amount of imports an the difference in
the interest account between the United
States and England, would save our people
many millions Of dollars every year.
If we had a sound paper currency, and
did not depend on gold and silver, to make
our internal exchanges, we could send all
our gold and silver coins out Of the country
to adjust our foreign balances, without de-
ranging our monetary affairs, or enabling
foreign or native capitalists to cmbarrass
the exchanges Of our products among our
selves. If we now have $50,000,OOO Of
coins, written previous to the introduction
Of gold from California; we could ship
them, and cancel this amount of our debt
to England, BY paying our government and
State bonds, and thus save $4,000, 900 in
terest, annually paid to the foreign holders
Of our bonds, for the use Of a representa-
tive Of our own property. The money, too,
on which we pay this interest, goes mostly
into the vaults of our banks, and lies there
dead, while our bank notes make the ex-
changes. 1t previously lay idle in the
vault Of the Bank of England, while the
notes Of that bank performed the exchanges
in England.
But suppose, upon its arrival her every
dollar OF the specie should 90 into active
circulation, what service would it render US (?
II would only assist US to effect our inter.
nal exchanges we should still be OBLIGED
70 make all our products by our labor, az
mucn as II we bad used our own paper
money 70 make our exchanges. If tbo
Bank Of England should send $50, 900 600
Of her bank-notes to the United States and
our laws should make them tender ~
debts, they would be no more useful to us
than $50, 900, 900 Of our own currency; and
we should be compelled to pay England
S3,000,0O0 worth Of our products yearly,
80.