Worcester daily spy. [volume] (Worcester [Mass.]) 1850-1888, 1872-12-03

established, and, subject to such changes as
changing circumstances NAV demaud, they will
remain part of our public policy until the
financial consequences of the war disappear
The secretary here defends the protective policy
which, however, will gradually cease TO be
necessary, and the protective duties NAV be
gradually reduced. For the purposes of govern
ment the principles of political economy are
national, not cosmopolitan. Our tariff system
has, in the secretary'S opinion, contributed
largely TO the general prosperity, and such gen.
efal ana continued prosperity is the only basis
on which a wise financial policy can rest.
The other changes caused by the war, the
issue of United States notes and the establish
ment of national banks, are considered together.
as they are parts of the same system, and
neither could be abandoned or substituted for
the other without general disturbance. Several
important services rendered by the national
banks TO the government and the public are
enumerated, by which they make return forthe
valuable privileges they enjoy. But the system
IS not claimed to be perfect, and some reasons
are given why the business of issuing the notes
TO be used as currency should not be entrusted
entirely TO ban $, whether national, state or
private The conclusion is that the crcula-
ton OF the banks should be fixed and
limited, and that the power to change the vol
ume of paper in circulation within limits eStab-
liShed by law should remain in the treasury de-
partment. 4 degree Of elasticity in the volume
Of the currency is essential for two reasons; the
business ofthe department cannot be transacted
properly if 4 limit is fixed and the p ,wer to
raise the circulation above or reduce it below
that limit is denied This would compel the
secretary to keep on hand a large currency
balance TO protect the credit of the government
against the consequences of every serious bdsi-
ness or political crisis here or in Europe, es-
pecially while, as now, our currency eXpendi-
lures are largely in excess OF the currency reve.
nue. Elasticity is also needed to meet the
annual demand for currency to move
the crops in the autumn from the
interior to the seaboard. perma
nent increase of the volume Of currency
would not tend to remove this difficulty: it
arises from natural causes and increases with
the prosperity of the country. The additional
currency is needed at this time; it is paid 10 the
producers, and finds its way gradually back to
the commercial centers; but if it were allowed
to remain there for general use, the same need
would be felt the next year, and the process
must be repeated. The problem is to find a
way Of increasing the currency for moving the
crops, and diminishing 1t at once when the work
is done. This Is necessary power, and, since
it cannot safely be contided to the national
banks where but in the treasury can the power
be repOSed?
Being satisfied that the true policy will be
found in continuing the national banking sys.
ten combined with the issue of United States
notes, the secretary proceeds to consider the
subject of resumption of specie payments
There are, lie says, two etfectual and certain
ways of placing the country in a condition when
specie and paper will possess equal commercial
value; first by diminishing the amount of pa per
in circulation. All legislation having this Oh
jcct in view will be effectual only SO far as it
involves contraction of the currency; but as the
country is not willing to sustain a policy of
contraction, the only course remaining which
will accomplish the same end must be found in
sturdy refusal to add to the paper in circula-
ton until it is of the same value substantially
.fag1r clad,
icy OF the country the difference between the
value of paper and coin cannot permanently
increase, and an opportunity Will be given for
the influence Of natural causes, tending, upon
the whole, TO better financial conditions; and
among these are the increase of population and
its distribution over new fields OF business and
labor, the increase throughout the south of per-
sons having property, using and holding money,
and the more general use of paper in Texas and
the Pacific states. Mr.. BputwelpS observation
during the last three years confirms these views,
and warrants the opinion that under the intiu-
ence of existing causes our financial condition
will gradually improve. Cer'ain adverse intiu-
eucpS have operated during the current year
which are not TO be expected in future, but not
outstanding these, the premium on gold con-
tinued about the same as for the year before.
Those natural causes would in time produce
the result sought, but il is desirable that they
should be reinforced by the power Of the gov
eminent so far as practicable. The revival Of
our foreign commerce IS one means, and perhaps
the most efficient Of furhering this object. Ii
the earnings gof American vessels were eighty
millions annually instead Of thirty the differ
cnce would meet large part of the adverse
balance Of trade in ordinary years. Whatever
improves the channels OF trade between
the seaboard and the agricultural re-
gions of the interior helps forward
the same object, and those measures which
encourage American manufactures, especially of
iron, wool and cotton, diminish importation of
these articles, iavOrably affect the balance OF
rrade and help us toward the end
we seek. Anticipating the day when it
will be practicable to resume and maintain spe.
Gle payments, the secretary anticipates also
that the burden Of resumption will rest upon
the government. There are now more than
nineteen hundred national banks, and he
cannot expect for some wears a condition of
things so favorable that they will all be able
to at all times redeem their notes in specie; but
he thinks all that is of value will have been
gained when the treasury shall be prepared to
pay the demand notes of the government in
coin, and the banks 10 pay their notes in either
coin or legal tender notes, and then our good
fortune will clearly appear in this that our pa
per currency is not exclusively OF national bank
notes nor exclusively of United States notes.