The Cairo bulletin. [volume] (Cairo, Ill.) 1872-1878, 1873-11-29
THE FINANCIAL SITUATION,

To tho Editor Of TIE BULLETIN
Tho question of the ourreney-N all
times important--is pre-eminently the
onos which at this moment engages
the public attention. Ono hundred days
ago the industrial activity Of the country
VA, immense sll our energies wero ON
ployed in production and exchange; The
signe Of q busy and profitable fall and
winter trade were never moro abundant
and decided-when suddenly, without
warning, 40 if by the action OF some force
devastating storm, our industries we're
laid PROSTATE our energies were para.
lived and we found ourselves in the
mids, Of widespread business disaster and
destruction. II has seldom happened
tina, o financial revolution so rapid and
extensive has taken place in the history of
any people.
Naturally, the public mind CAS-" about
for . remedy. Naturally, too, there is
great diversity Of opinion IS 20 what
remedy will safely and certainly effect
cure and most probably prevent a re-
currencs Of like disasters in tho future.
A large and influential class in the com.
munity declare the infallible specific to be
an Immediate resumption OF specie pay
>mens; while another cl~sp, perhaps
neither so largo nor so influential, declares
in favor OF an addition TO the legal tender
paper. intermediate between these are a
variety Of propositions for "free
banking" and convertible bond"
systems-whicb, however, bril-
liantly they may operate in the the
ories of their projectors, are too uncertain
in respect OF actual practice 10 deserve
any very serious consideration in = time
like the present. There is still another
body Of citizens, both large and inhuen-
tial, which 10 content with the existing
system; 80 modified, however, as to meet
the changes suggested by the experiences
OF aow more than half-score of years.
1t is no doubt desirable that We shall re-
turn to specie payments but the import
ance Of resumption has been greatly
overestiunatsd by those who favor it.
However certain and permanent it may DO,
q cash paying system ia no eGectual safe
guard against calamities like that which
sssailed US in September. On the con-
trary, repeated experiences provo that in
flexible adherence to it intensihes
panic periods and makes them more lasting |
and destructive. When-in England
psnics have been relieved by tho timely
interference of government, it has been
not by clinging to-but by departure
from the cash system. And 1t may be
laid down as fixed truth, that under tho
modern credit system, some method for
judicious extension OF the currency in
periods of financial excitement and dan
ger, is necessary to prevent a pcriodios
recurrence OF the present condition OF de-
preston aud ruin.
But resumption is At this time alike in
expedite and imprscticable; inexpedient
because il would be uni ust and oYpressive
TO av.st majority OF the people and i'm
practicable, because Of the political and in
dustrial circumstances of the country
We may dismiss all schemes OF gradual
resum ption as unsound for coin and pa
per will never como to par in tho natural
course OF business and without tho inter
vention OF arti fetal stimulantsi and that
the premium on coin is but five or three
or even but one per cent is noprooi to the
contrary. The ratio por cent. Of the pre-
MUM is--in a word-no even remote in
dex either Of tho power Of the country TO
resume, or OF the change tina, would he
wrough, in prices If resumption we're per-
msnently effected.
The government pays interest upon
a large portion Of the public dob. in
coin, and in order TO procure Il supply ad.
oquate to this purpose it requires payment
in coin Of the duties levied upon imported
goods The effect Of this requirement Ia
70 support steady demand for gold, and
TO compel the constant presence in the
country OF an aggregate fund OF a, least
ono hundred millions Of dollars. This
compulsory presence of so large sum
serves as continuous s,imulant 20 its
price. IL the governments Requirement,
were removed, this one hundred millions
would rapidly exported; and in the ab-
sence OF demand the premium would sink
70 . merely nominal rate; perhaps 70 but
TWO OF three per cent. We should thus
sec 'he apparent anomaly OF a far lose
stock OF coin in the country and at the
sAme.time materially lower rate Of pre-
MUM, But will any person insi., th,,
because in such circumstances a. these
coin and paper approximate to within tive
oe three per cent. Of each Other in nominal
value, the government will be in posI.
ton 70 redeem In coin, paper TO the amour,
OF four hundred or seven hund red and forty
millions Of dolIsrs2
Tho truth 10 this: The government and
tho banks suspended cash psyments in De-
cember 1851 because the equilibrium be-
tween coin and paper had been destroyed
Under the pressure Of the war the cash Of
the country had been exported, and nis,her
government nor the banks had il in guam.
tity sufficient TO redeem their issues, ard
accordingly - the best-and in point OF
fact, - the only thing they could do
they suspended. They have continued in