Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-05-06
OUR CREDIT ABROAD.
The English Press on American FL
nanceS.

LOuuOn SpCClatoE-
To Englishmen the sudden outburst
of a mania like this is almost incredi-
bic, but the average American elector,
though he thoroughly understands bust
ness, is apt to get puzzled by apparent
" simple questions of finance. Some
of the ablest Americans have been pro-
tectionists, as Canadians and Austrah-
ans now are, and We cannot forget that
the late Mr.. Horace Greeley, man on
many points elear-headed to a degree,
died in the faith that if the exports
exceeded the imports, the country
was prosperous; that Is, that 1t was pro-
ftable to sell goods without being paid
for them-Or, to put the matter IN the
usual way, that it was possible to sell
goods without accepting the goods Of
fered in return. Nor can we forget that
initiation has advocates among ourselves,
or that Sir Robert Peel was for years
denounced as a robber because hewould
endorse no currency not based on in
slant convertibility on demand. We
believe it on all the evidence to be but
too true, that with gold at ll3-that is,
with paper deprecated more than ten
per cent.-the Western men Will think
that more paper is a panacea
for the distress under which
they suffer. 1t seems incredible, for
instance, but it is, we fear, too true,
that they think depreciation can be
avoided-that is, that corn can be too
plentiful and yet no cheaper, and that
they think two sixpences worth more
than one shilling. Their notion is that
if paper is plentiful they can borrow
1t, say, at FIVE per cent, instead OF ten,
quite forgetting that if the paper will
buy only half as much. they are paying
precisely the same interest. A note
which will buy a quarter of wheat Is
worth, whether to hire or to buy, exact
ly two notes which viii only purchase
the same quantity. We are ashamed
to state such proposition, but 1t is
certain that the Western men do not
see it, and we presume their governing
| idea is this: "The immense growth of
the Union, its yearly increasing pro-
ductiveness, and its hourly enlarging
business viii, sooner or later, require a
much greater amount of currency than
she now possesses. As gold sank after
the war, when the paper currency was
in round numbers $3.50, 100000, from
40 to 112, so, If we initiate, that sum
to $500, 000, 900, We shall In the course
of years find that notes and gold come
nearly to par once more. All that
gradual rise in the value of paper will
be to our benefit" This, we say, must
be the theory on which the West is
acting; and it is thus far true.
If it were certain that an ulti-
mate limit to the issue of
paper had been reached, the prosperity
of America might, IN a generation,
raise its currency to par, Just as the
new prosperity of firm might give
credit to its previously discredited bills.
But the Western men ought to see at
what price they are purchasing this ap-
parent advantage. The larger portion
of interest on the debt is paid inpaper,
and every measure of initiation cheats
the public creditor of so much of his
money. He lent believing that he
would be paid IN paper, issued only to
the legal limit, and to be replaced as
soon as possible by gold, and finds him.
self paid in a paper to which there is
no limit, and which is not to be made
convertible. What is American credit
worth, if its payments are TO be made
in coin which may be debased at will?
And that is what an imitation of bank
notes OF greenbacks really means.
Again, not only is the public creditor
| cheated, but the private one. He ex-
pected to be paid in gold, or paper
worth ten per cent less than gold, and
perhaps finds himself paid In paper
worth one third less than gold, that is,
he is taxed twenty-three per cent of all
the money owing to him. Where is the
Justice Of that9 1t is not just even in
war time, when it is so frequently
done; but in war time, of course,
Justice may be overridden by neces-
sity. But for legislators in time of
peace, with their eyes open, to tax all
creditors while relieving all debtors, is
confscation-that Is, robbery disguised
under the forms of law. We do not
believe the Western men see this, be-
lieving them to be entirely possessed
with a notion about cheap money; but
it is true for all that, as they will speed
ily find in the universal collapse of
credit and rise of price for everything
except corn. They Will get little more
for that, for the price of corn is limit
ed by European competition, buyers
looking to Odessa and Alexandria, in
stead Of Chicago; but they viii Be able
to buy nothing, except at prices sutfi-
Gent to protect sellers against the de-
Ginning value of their paper. 1t is,
however, of no use to preach political
economy to men who will never see the
arguments, or seeing will not believe
them. The United States must learn
its lesson as France and England did
in the Mississippi Scheme and the
Southern Sea Bubble, and our concern