The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1873-11-08
From Pennsylvania Engineer and Manufac
turer, October 10th, 1871
THE FINANCIAL (RISIS

mas passed, ana very considerable p0r.
ton Of the press try to persuade them.
selves and the public, that it is not much
of an affair after all that no one is dam
aged particularly, but a few bankers and
brokers, and that ere long we shall be
under full headway, and as prosperous
and as happy as ever. Let no one be de-
luded by these false guides! This is a
very serious business, the end of which is
not yet, and the effects of which. will be
felt by many an enterprlsing man for the
remainder Of his days. Better far, and
more manly and sensible is it for us one
and all, to face these difficulties, and to rise
to full realization Of the position of the
country and of business, and 10 endeavor
to ascertain the cause of the trouble. Hav-
ing found this. we may also find remedy,
and, apply it, bring about cure.
The close of the war in April, 1866,
found the loyal portion of the country
more thoroughly and more widely prosper
Gus than it had ever before been known to
be, and the people generally out of
debt--the only great debtors being the
governments, national, state and munici-
pal, and the railroad companies. Hugh
McCulloch, now of the firm of Jay Cooke,
McCulloch & Co., London, was then sec
retary of the treaSury--in our opinion the
most important Office in the country.
Gold had been at 200 on March 1st, while
it had fallen to $50 by March 30th, thereby
reducing the value of an bumense amount
of property, especially that imported from
abroad, no less than 25 per cent. But the
early part of May all of the rebel armies
had surrendered, and the government,
with as much expedition as possible, COM
menced to discharge its armies, and
bringing to an end its extensive purchases
of materials Of all kinds, became instead,
an extensive seller of supplies. The south
was PROSTATE, its currency was devoid of
value, and it was ruined, bankrupt, dis
loyal and bitter.
Here, then, was condition Of things in
the bodY polite, demanding the highest
and the truest craftsmanship in the treasu-
ry department; but out of which might
readily have been brought, order, prosperi-
ty, happiness and power, alike to north
and south; with such loyalty in the latter,
as it had not known for quarter of a CEN
tury. A man of the stamp of Alexander
Hamilton would have grappled with such
difficulties with delight, and would have
surmounted each and every one of them.
But, alas, no Alexander Hamilton was
there--only Hugh McCulloch!
Apparently dismissing from his mind
the weighty considerations and circumstan-
ces by which he was surrounded, Mr.. Nc
Culloch at once commenced cry for con-
traction of the currency and specie pay
ments, and this cry he kept up until finally
he retired from office on the advent of
Grants administration, March 4th, 1869.
The practical result of this policy was an
actual contraction Of the currency of the
United States of over $270, 100000 up to
the latter date, and he would even have
made it $50, 100000 to $75, 200, 900 more,
had he not been prevented by Congress, or
had not financial crisis ensued, ere he
had reached such point. And, as if this
contraction were not crushing enough, he
demanded that he should be permitted to
retain war taxes, such as would eXtinguish
the national debt of over 81, zoe, 900, 900 in
twenty-eght years.
Strange to say, the country survived this
doubly terrible ordeal, and, after severe
uphill struggle, in which many man was
ruined, our Industries had a month ago,
reached a more promising position than
they had ever before held, although with
each forward step, the increasing power of
the money-lender became more and more
apparent. The country had outgrown its
currency, and at last the crisis came, and
here we are to-day, with an active enter
prising population of over 10000 900,
with resources, both natural and acquired,
beyond those Of any other people in the
world, and paralysis and death more and
more surely settling upon the land.
1t was in the power of the government
to have stepped into the breach and to
have arrested this crisis almost in mo-
ment, and this aods its plain duty, seeing
that that crisis was&due to former ad-
ministration of the government, in retiring
currency. The banks, SO far as it laid
in their power, with courage and an
intelligence which the government might
we'll emulate, in measure arrested the
crisis in its onward progress, and saved
the land from becoming ascene OF universal
"greenbacks" now held by the treasury
department should have been promptly
issued, in order to save the country and
the revenues. They will yet be issued,
not because of any regard for the needs
of the people, but more becausetthe en-
barrassment Of the national treasury, ow-
| ing to decreased revenues, will render them
absolutely necessary.
But the practical question which now
most naturally arises, is, must we moi
have some reform which will render such
crisis. impossible in the future? How,
then, is this important result to be reachedi
BY hacing a full supply of national papel
money, hari'ag the Feature of interchaagea
bility, at the option Of the holder, aoal
government bonds bearing .fned rate o.
interest, so that at any and at all times, tn
supply of money can be increased o
decreased, according to the wants of tn
people and the requirements of business
In such interchangeability there is subtl
principle that will regulate the movement
of finance and commerce as accurately a
the motion of the steam engine is regulate
by its governor. Such paper money token
would be perfect measures of value whic
gold and silver never Lave and never can BIZ
The use of gold or other merchandise Q
money is a barbarism unworthy of thea ge.
SOME new obituary verses have been di
, | cnyarad hv the Hamilton (On,r \ Cnaototo,