Wyandot County Republican. [volume] (Upper Sandusky, Ohio) 1869-1903, 1873-02-13
The Currency-Specfe Payments.

we publish synopsis of Senator Sher-
mans recent speech in the United States
Senate on the occasion of reporting from
the Committee on Finance a bill in regard
to specie payments. Mr.. Sherman said:
s'The restoration of our currency to
specie standard is an object of primary i'm
portance. The present condition of our
currency governs and controls all other
questions Of political economy, and until we
make 1t conform to and be the equivalent of
money-of gold coin, the recognized stand
ard OF meney among all civilized nations
we cannot rest upon solid basis for any
kind of business or for public or private
credit. Every man now buys or sells upon
fuctuating standard of measurement.
Every man who borrows feels that he may
be compelled to pay in different money
than he receives. Every producer feels that
to the uncertainty of supply and demand he
must also speculate upon the kind and value
of money with which he is to be paid. The
merchant must not only guard against dan
gers BY fire and water, but against "corners"
or artificial stringency of money. The people
at large, while boasting Of their restored
credit, Of vast payments on their public
debt, yet must feel that the public debt.
held by them in the form of United
States notes, is less valuable than gold, which
1t promises to pay; it Is less valuable than
any other form of public debt, and forces by
its own depreciation the depreciation of the
notes OF banks able to pay in specie. 1t Is
currency rigid, inflexible in amount, and
therefore Of variable value-to day worth
four per cent. year and tomorrow worth
two per cent. month.
eft is the basis of banking circulation
that is practically irredeemable because the
United States notes are themselves irredeem-
able.
sAnd yet, with all these defects, the cur.
rency Of the United States is so much bet
ter, safer, and more satifactory than any
we have had before that our constituents
dread when we deal with acknowledged
defects, lest in curing these defects we de
prive them OF q currency under which they
have made greater progress than ever before
In our national history. 1t is the fear that in
some way we may impair the vast benefits
we have gained from our national currency
that so many oppose raising it to a specie
standard. While they acknowledge that
paper money that is irredeemable, that on its
face falsely promises what it does not per-
form, that is subject to artificial speculative
fluctuations in value, that lacks fexibility in
amount to meet'the changing wants of COM
merce, yet they fear that to correct these
evils by making it equivalent to gold coin
will produce other evils of greater injury to
trade, and especially burdensome to the
debtor class. It is feared that specie pay
ments will produce contraction of the cur
rency and those kindred panics which in our
past history caused widespread ruin and
disaster. It is for Congress to determine
whether it is possible while maintaining our
present system of national currency to bring
1t by wise legislation to the standard of gold
without producing the evil results anticipat-
ed from resumption Of specie payments.
mo one in dealing with such question
on which there is so great a diversity of
opinion, and SO varied an interest, should
speak with assured confidence. The only safe
way is to proceed slowly and take no step
that Will not tend in the right direction, and
to reject all measures the practical results
OF which cannot be clearly marked by exper-
ience."
Mr.. Sherman said that a resumption of
specie payment was demanded by public
faith, public policy, and the spirit of our
laws. Individual hardship was not sufi-
cient reason for violation of public faith or
disregard Of the general interests or policy
of the whole country. The effect of specie
payment is greatly exaggerated as to the
persons it will injure. Our business men are
not only debtors, but they are creditors. If
they are injured by adding to the burden of
their debts, they are benefited by the in
creased value of their credits. No one en-
gagged in production merely, whether as a
fpancier or manufacturer, a. mechanic or Ia
borer, is injured, for if the nominal value of
his production is diminished, cost of living
and all that enters into the cost of produc-
tion is diminished in the same degree. Expe-
rience has shown that deprecated money
is most injurious to the laboring man. 1t
produces false standard of value, the effect
of which is not noticed by laboring man,
or by trader or merchant, even upon cur
rent debts and credit. The effect of specie
standard will surely be appreciable, for the
nominal loss will be discounted in ad-
vance, or be divided during the gradual ap-
probation of paper money. The greater
burden will fall upon debts running for a
long period of time and upon corporation
bonds and mortgages. As to those in ex-
ictopoo of fbo tom dora nj eff oct
it is but right they be paid in specie, while
those contracted since have been issued in
expectancy of specie payments before this
time. Still, while the effect of a specie
standard upon debt is greatly exaggerated,
it cannot be denied that if it is followed by
contraction of the currency it will cause dis
tress and embarrassment to very many who
have contracted debt on currency basis.
But this argument of hardship will apply
forever. If we are controlled by it we can
will not make it easier. Our financial condi
tion is now SO much stronger that we can
afford to do right, and yet in such way as
to injure in the least possible degree those
who contracted debts on currency basis.
Again, the effect of specie standard in
producing contractions of currency is great
ly exaggerated. A contraction of the cur
rency is not necessarily result of specie
payments. Undoubtedly a contraction OF
currency would produce specie payments.
1t is the most direct road to specie pay
ments, and if paper money in circulation is
in excess of the wants of the community it
is the only road. We in 1866 and 1867 quiet
" contracted the currency by funding over
$500, ,OOO, 600 debt of compound interest and
other notes, most of which were part of the
currency. If in 1868 we had, as was pro-
posed in the Senate, authorized United States
notes to be used for five per cent. bonds at
par, we would have long since been at specie
payments. The notes then could have been
paid out again for the payment o. current
expenses and the purchase of bonds pre-
cisely as now, when gold is sold for notes
and notes applied to the purchase of bonds.
In this way we could have reached specie
standard the moment our five per cent
bonds were worth par in gold. The advanc.
ing credit of the nation would have lifted
our currency to par in gold precisely as il
lifted all forms OF bonds to par, or when
par in gold, and now, when our credit is
generally impaired by rapid payment OF
debt, as induced by advances in the value Of
our notes in gold, we can raise their value
to specie standard much more readily than
four years ago.
One fallacy lies at the foundation of the
objections to specie standard, that it neces
sarily compels the withdrawal of paper cur
rency. This depends entirely upon the
amount necessary to conduct the business OF
the country and the degree of public conf
dence in the redemption. Mr.. Knox, the
-SOMptTOlItI VI Gut OuTIoHCy3 III LIS iitSI al
nual report shows that in January, 1862
when specie payments were suspended, the
aggregate circulation Of coin and paper was
$448, ,671 .218, or ratio of 2.71 per cent. oi
the wealth of the United States, and that
the circulation in the United States in 1870
including United States notes, bank notes
fractional currency and specie, was $3.50,
0O0, 900, or 2 60 per cent. of our wealth. The
circulation in the United States per capits
is now less than in France and greater thar
in Great Britain, but greater than in either
in proportion to wealth. When we consider
the vast extent of our country, its rapiG
growth, the value of its productions, and
the general use of paper money, it is no
unreasonable to suppose that all of it nov
outstanding can be maintained in circulation
on specie standard 1t must be remember
ed that the total amount of United States
notes is now 1856, ,O00, ,O0O, that very larg'
sums must be retained by the banks as thei
reserve, that large gold reserves are nov
held in the Treasury, that notes are widel,
circulated. is evidence that we hav,
the confidence of the people ant