The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1873-02-13
CHEAP MONEY AND HOW TO Or
TAIN IT.

lain 1E
THE WAY TO FORCE THE BALANCE OF
TRADE IN FAVOR OF THE UNITED
STATES-SHIP BUILDING, ETC.
Extract from n Letter of Horace
II. Day, First vfce.Irestdent Of
Fernando Wood, December !, 1879.
The great want of this country to-day is
cheap money, a low rate of interest to
those obliged to borrow for all the devel-
Oping industries of the land. You know
England pays on her consols three per
cent. interest, and has thirty-seven hum
dred millions in these ~consols, held almost
exclusively by her citizens at home, af-
fordinga circulating medium, being read
lily convertible into meney and also into
c%onsols, thus affording almost an unlimited
circulation, supplying every want of the
this nation has only such quantity of cir
rate OF interest, which the present very
limited developing interests of the country
must pay, at from twelve to one hundred
per cent. TO enable US to produce fabrics
to compete with other nations and find a
foreign market, we require such an album
dance of money, accessible to the people,
as will bring the rate of interest nearly as
cheap as in Great Britain. We contend
that the government has no right to deny
her industrial citizens the use of money at
as cheap rates, as do the governments of
those countries who compete with us in
the markets of the world.
To-day no civilized nation bases its cir
c~ulation upon gold alone, and the old Benz
ton Bullion age is past beyond return.
We should have, to make us equal to
Great Britain in financial advantage, at
least 81, 000, 000, 900 of United States bonds
drawing only three per cent, with the
ability to convert them at will into smaller
non-interest bearing greenbacks--not bank
notes. Under this system we might easily
open our ports to free trade with all the
world, and this cheap and abundant money
would stimulate production and then find
in foreign markets an outlet for our sur
plus productions, as do England, Germany,
France, and all our intelligent competing
nations. Nations are competitors as we'll
as individuals, and if one nation has a sys-
tenn of production twenty per cent. cheapir
than another, then she can supply the
world. Our tariff laws can reach no
further than the territory of our own ma
ton. Here then is just our difficulty.
The rate of interest which the legal cur
rency of a nation bears determines the
value in that nation of everything meas
ured by that money-bonds are in fact q
currency. To illustrate: Before our late
war a house and lot was saleable at say,
$4,000, which to-day sells for $4,000, and
could be originally mortgaged for two-thirds
its value. To-day the same house will not
accepted by a money-lender as security
for much over $4,000. What is the cause
of this change?
THE MONEY LENDER
before the war, was glad to take G per
cent. and ever then had to pay II state
tax on his bond and mortgage and the idle
money thus secured and invested to him
netted only a per cent. To-day under
the operation of our existing system his
money invested IN United States bonds at
9 per cent. and free from taxation, gives in
effect 8 per cent, or double hat which
he could receive under our old system,
besides bonds are in effect ready money
convertible in an hour, while a mortgage
might take six months to forcclose, hence
the advantage is not alone in the double
rate.
The average annual increase of the ma
TONS wealth has never reached 81 per
cent. No nation on earth ever increased
its wealth as much as 4 per cent. The
case of the horse illustrates the whole.
The rate of interest determines the value,
and government determines the rate of in
terest.
1t is this fatal financial system, born of
war, which deprives the people to-day of
their necessary tools money to work
with, and the whole country of its right
full inheritance of prosperity.
1t is claimed that three to four hundred
millions of the national debt has been paid
since the war, under Grant.
We claim this is in one sense a great
mistake, for at the close of the war, we
did not owe abroad five hundred million
dollars, whereas their claims of ever kind
against us to-day exceeds 50, 800, DOC, 900.
This is getting out Of debt with a ven-
geance /; pay off three or four hundred
millions at one end and add five times as
much at the other end.
And yet great as this increasing debt is
there would be nothing alarming in its
aggregate if there was any hope of a
change of policy to give promise of arresting
the evil. There is
ONLY ONE WAY OUT OF THIS,
that is, in cheap money, plentiful, to slim
ulate~ production, and over production, and
forcing us to sell abroad our surplus, and
at as cheap rate as our competitors, and
thus turn the balance of trade in our favor,
and stop this increase of debt. Here is both
tho work, the mission, and the duty of the
honest Democracy. There is no other way
to save our country and restore a republic,
now destroyed and swallowed up in
the merciless embrace Of a money
oligarchy. The financial platform of the
labor reformers will accomplish just this
result. 1t is also a practical balance wheel,
which in its very nature prevents huctua-
ton in values, for no matter how much the
country called for, it could use no more
than to keep the rate Of interest to 3 per
cent. or 3 65-100. If the Government
wanted specie, buy it as it would timber to
build a ship, until the balance of trade
brought it back. It is and mus, in the
nature Of things, be a fatal policy which
operates to send all of gold, or any other
commodity. out of a country. Let us,
therefore, stimulate production and send
products abroad to pay for what we want
to import.