New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-06-29
THE ADVANTAGES or GOOD MONEY.

THE ADVANTAGES or GOOD MONEY.
There is a cheap philosophy which looks on
panics and commercial crises as inevitable,
aud holds that paper money has nothing
to do with them. That there are expansions
and contractiOns of credit not connected
with expansions and contractions OF an
inconvertible paper currency is undeniable.
To a certain extent the doctrine of periodical
crises and panlcs is, therefore, true. 1t is,
however, very far from being the whole truth.
There is Winter and Summer every year,
but if in Winter you have only Summer
clothes, and In Summer only Winter clothes,
YOU will find the heat and cold much more
severe than you would if suitably attired.
The "best currency we have ever had" is very
bad in this respect. 1t is cotton in Win
ter and wooden in Summer. 1t intensi-
fes the heat of speculation and af-
fords no relief from the searching
cold of the reaction. We could prove
all this by statistics; but it would make this
article too long, and would repel those whom
we wish to read it. We could show that the
great panics depress our foreign trade in
proportion five times as great as that which
measures their effect on the trade OF Great
Britain, and that the same proportion holds
good in the expansion of business in years of
active speculation. 1t may be argued that
ours is new country; but that will not ac-
count for the superior vitality shown by En-
gland after such crises as those of 1857 and
1866. The aggregate trade Of tho two cOun-
tries increases in about the same ratio, but
the fluctuations, leaving out the years of the
war, are immensely greater with us than with
the English.
We think the difference is almost entirely to
be accounted for by the superiority of the
English currency. Sir Robert Peeps much
abused act of 1874 has now been in operation
thirty years, and it is within that period that
the stcadness of English trade and the growth
of that people in wealth have been so marvel
GUS. Since 1874 the true standard OF value, u
definite weight of gold, of a certain fineness,
stamped by the Government, and called a
pound sterling has never been departed from.
The word pound" has meant this and moth
ing else. Banks of Issue have not been allowed
to fill the channels of retail trade and the
pockets of laborers with notes of one, two, and
three dollars. In England nothing smaller than
a twenty-five dollar note is permitted to circu-
late, while in Scotland and Ireland the smallest
notes are for one pound, or five dollars, but
limited in amount. Money is not looked on
there as merely a "tool," but as a commodity,
having, like other commodities, value
which never varies greatly from the cost of
production, which in the case of money is
that of digging it from the earth, refining
and coming it. Money, we admit, Is tool,
and so is an AK a tool Bat the substances of
which tools are made are all important if the
tools are TO be of any use. Experience has
shown that paper promises to pay, unless the
coin can be had for them on demand, or,
in case they are forced On the people as legal
tender for debts, unless the quantity is rigidly
limited are as unsuitable for money as glass
is to make axes of. Glass axes, so long as
the objects struck at are made Of wood, if
they do no good can at least do no great
harm. But paper substitutes for money, such
as we have been cursed with for the last half
century, are like glass axes used on men,
women, and children. If nobody has been
killed by them, many have found themselves
badly cut.
England Is now passing through one of the
periodical cOntractions of credit which we
mentioned above. Prices are falling, exports
are diminishing, business is dull, strikes and
reductions of wages are universal, and there
have been some failures, But there has been