Alpena weekly argus. [volume] (Alpena, Mich.) 1871-1893, 1874-02-17


bullion raised in premium from one
to forty-one per cent.
BY the provisions of the bank
act the resumption of
coin payment was required to take
place within six months after de-
finitive treaty of peace. From 1910
to 1914, when currency expansion
attained its maximum, the widest
financial schemes seemed to COM
mend themselves favorable to the
hitherto conservative England
mind. An era of unrestrained
speculation ensued, unlike any
thing that had occurred since the
period of the South Sea bubble.
The bank licenses increased over
two hundred in four years. Bank
currency multiplied on every hand.
Prices of every article Of consump-
tion reached extravagant rates.
Everything seemed to float on the
high tide of prosperity, till the ban
ishment of Napoleon in 1914 prom
ised a return of peace, six months
after which it had been enacted
that coin payments should take
place. The prospect of so soon a
return to a specie payment caused
much uneasiness in agricultural and
financial circles. and was attended
by rapid fall in prices. The con-
dition of France served to increase
the alarm. Under Napoleon's wise
financial policy France had come
out of the struggle absolutely free
from debt, and that, too, undor q
moderate rate of taxation. Her
landed interest, divided among
nearly four million owners in fee,
felt none of the onerous burdens
that hung like an incubus over the
lessees of English estates. With
cheaper bread it was easily seen
that France would enter the race OF
manufacturing industry with many
advantages on her side. All this
served to add gloom to the financial
prospects of England. Prices con-
tinued to decline till gold bullion
fell from e5Ss to the ounce in 1914
to f3 18 Cd in 1916, less than one
per cent. above the regular mint
price, which was e3 lis 10 LID pei
ounce. Under this contraction
gold, which to this time had beer
exported to the continent, began tc
return rapidly, so much so that in
1917 the bank asked permission tc
resume coin payments, and called
in its issues dated prior to 1912
and afterwards called in all issues
other than that of the current year
Here was England's golden op
portunity. From 1914 to 1922 she
had endured all the adverse inhu.
ences of contraction and cores
pondingly low prices only to loose
all that the struggle of eight years
had gained, by the passage in 1885,
of what was called the small note
respite act. In 1919 Parliament
passed an act providing for the re.
demption of Bank of England
notes, in bullion, at diminishing
rate beginning with f4 Is per
ounce as the rate, from February,
1920, to October, of the same year.
After that time and up to May,
1921, the rate was e3 los Cd per
ounce, and after May, 1923, the re-
demption was coin instead of bull
lion. Another clause of the act,
and the one which added greatly to
the distress of the country, was the
provision which required the with
drawal of all bank notes after 1928
of less denomination than e5. This
withdrawal before coin of like de-
nomination could take the place
worked untold disaster. The part
of the act providing for the sliding
scale of redemption in bullion
amounted to nothing practically, as
the great supply of coin, under the
cheapening of all commodities,
caused it to flow into the vaults OF
the Bank of England, and par was
reached years before the time re-
quired by law.
This fact, however, serves to
point o moral and show the utter
folly of attempting to make by law
sliding scale of greenback re-
demption. This policy has been
talked of in Congress and out of it.
1t is only three years since prom
inent member of Congress, then
and now chairman of an important
committee, wrote letter advising
the policy of a law providing that
the government should, on the fol-
lowing January, redeem greenbacks
in gold, beginning at S1.20 and di-
minishing the premium monthly
one per cent, till gold and green
backs should be par, not seeing
that, if this body should be embod-
led in law, and the supply did not
come into depress the premium
faster than The force of the law
would operate, the gold capitalist,
availing himself of the fact that the
market rate was fixed by statute
could sell his $1,000 in gold for ST..
200 on the first Of January, loar
his 81 200 for one year, then buy
back his gold at 10s, which would
be the legal price at that time, and
pocket twelve per cent. premium in
addition to interest on all his cap
ital. With such crude financial
ideas is it any wonder that Congress
votes three ways on the same sub
ject in one weekl Had gold bull