Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1873-02-14
The uurtencr-specre Payments.

we publish a synopsis OF Senator sher.
mans recent speech In the United States
Senate on the occasion OF reporting from
the Committee on Finance q bill in regard
to specie payments. Mr.. Sherman said:
'VThe 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 OF private |
credit. Every man now buys or sells upon |
q fluctuatng 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 treAnd water, but against "corners''
or artificial etringeneyof money The people
at large, while bosstlng 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 notessis less valuable than gold, which
itproInises to pay9it 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. II Is a
currency rigid, iufexible in amouAt, and
therefore, OF variable value-to.day worth
four per cent. year and tomorrow worth
two per cent. month
ut Is the basis Of banking circulation
that Is pra ctieally irredeemable because the
United States notes are Themselves irredeem-
'"And vet, with all these defects, the cur
rency of the United states Is 80 much bet
ter, safer, and more satisfactory than any
we have had before that our constituents.
dread when we deal with acknowledged
defects, lest in curing these defects we de
prlve them of 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 1t to . 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 hexibility in
amount,to meet the changing wants of com
merce, yet they fear that to correct these
evils by making 1t equivalent to gold coin
will produce other evils of greater injury to
trade, and especially bufdensome to the
debtor class, 1t is feared that specie pay
ments will produce aeontraction OF the cur
reney and those kindred panics which in our
past history lcaused widespread ruin and
disaster. 1t is for Congress to determine
whether 1t is possible while maintaining our
present system of national currency to bring
it 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 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
ofwhich cannot be clearly marked by exper-
ience."
Mr.. Sherman said that resumption Of
specie payment was demanded by public
faith, public policy, and the spirit of our
laws. Individual hardship was not a suffl-
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 ipjure.l Our business menare
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
fiuancier or manufacturer, mechanic or Ia.
borer, is injured, for If the nominal value of
hisproduction 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. II
produces a 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 APP
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'
istence before the legal tender act took effect
it is but right they be paid in specie, while
those contracted since have been issued In
expeetancy.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 a currency basis
But this argument of hardship will apply
forever If we are controlled by it we car
never pay our pensioners. The last time
will not make it easier. Our financial cOndi
tion is now so much stronger that we car
afford to do right, and yet in such way al
to iniure in the least possible degree thos,
who contracted debts on o currency basis.
Again, the effect of specie standard il
producing contractions of currency is great
ly exaggerated. A contraction of the cur
rency is not necessarily result of speci'
payments. Undoubtedly contraction o
currency would produce specie payments
1t is the most direct road to specie pay
ments, and if paper money in circulation il
in excess of the wants of the community i
is the only road. We in 1866 and 1867 quiet
ly Contracted the currency by funding owe
$3OO,0OO,000 debt of compound interest AM
other notes, most of which were part of tn
currency. If in 1868 we had, as was pro
posed in the Senate, authorized United State
notes to be used for five per cent. bonds a
par, we would have long since been at speci
payments. The notes then could have bee
paid out again for the payment o: curren
expenses and the purchase of bonds pre-
cisely as now, when gold is sold for note
and notes applied to the purchase of bond:
In this way we conld have reached speci
standard the moment our five per cent
bonds were worth par in gold. The adyanC
ing credit of the nation would have lifte
our currency to par in gold precisely as
lifted all forms OF bonds to par, or whe
par in gold, and now, when our credit
generally impaired by rapid payment c
debt, as induced by advances in the value {
our notes in gold, we can raise their yalu
to a specie standard much more readily tina
four years ago.
One fallacy lies at the foundation of tn
objections to specie standard, that it necei
sarily compels the withdrawal of paper cul
rency. This depends entirely upon tn
amount necessary to conduct the business c
the country and the degree of public cont
dence in the redemption Mr.. Knox, tn
Comptroller of the Currency, in his last al
nual report shows that in January, 1856!
when specie payments were suspended, tn
aggregate circulation of coin and paper wa
$44S,67l ,21S, or ratio of 2.7l per cent. {
the wealth of the United States, and thG
the circulation in the United States in lS0
including United States notes, bank note
fractional currency and specie, was $3.50
000,00 or 2. .62 per cent. of our wealth. Tn
circulation in the United States per capt.
is now less than in France and greater tina
in Great Britain, but greater than in eitht
in proportion to wealth. When We considC
the vast extent of our country, its rapi
growth, the value of its productions, an
the general use of paper money, it is nc
unreasonable to suppose that all of it no
outstanding can be maintained in clrculatio
on specie standard. 1t must beremembe
ed that the total amount of United State
notes is now 1856, 900, that very larg
sums must be retained by the banks as the
reserve, that large gold reserves are no
held In the Treasury, that notes are widel