The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1874-05-06
The English Press on American Credit.

The London Spectator of April IS contains
an elaborate review of what it styles the ''cur-
rency battle" in the United States. The fol-
lowing passages on the "infation mania" have
not lost their application by reason OF the Pres
idents veto:
'sTo Englishmen the sudden outburst of
mania like this is almost incredible, but the
average American elector, though he thorough
ly understands business, is apt to get puzzled
by apparently simple questions of finance. Nor
can we forget that imitation has advocates
among ourselves, or that Sir Robert Peel was
for years denounced as a robber because he
would endure no currency not based on instant
convertibility on demand. We believe it on all
the evidence to be but too true, that with gold
at 113-that is, with paper deprecated more
than ten per cent.--tbe western men still think
that more paper is panacea for the distress
under which they suffer. 1t seems incredible,
for instance, but 1T is. we fear, too true, that
they think depreciation can be avoided, that is,
that corn can be too plentiful and yet no cheap
er, and that they think two sixpences worth
more than one shilling. Their notion is that if
paper is plentiful they can borrow it, 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 quarter OF wheat IS
| worth, whether to hire or buy, exactly tw o
notes which will only purchase the same guam
| tity We are ashamed to state such PROPOSE
| ton, but it 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 productivenesS, and its
hourly increasing business will, sooner or later,
| require 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, 000, 900, from 40 to 112 so. if we
initiate that sum to $500, 100000, we shall in the
course of years find 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 Yves
is acting. apdsit y thus far true.
| /, rs Il we're certain that an ultimate limit tt
/ the issue of paper had been reached, the pros
perity of America might in generation rais'
Its currency to par, just as the new prosperit.
| of firm might give credit to its previously dis
credited bills. But the western men GU, hit t,
see at what price they are purchasing this ap
parent advantage. The larger portion of in
terest on the debt is paid in paper, and ever
measure of initiation cheats the public credIto
of so much of his money. He lent, believing
that he would be paid in paper, issued only t,
the legal limit. and to be replaced as soon a
possible by gold, and finds himself paid in
paper to which there is no limit, and which
not to he made convertible. What is Amer
can credit worth, if its payments are to b
made in coin which may be debased at will?-
| and that is what an initiation of bank notes o
ereenbacks really means. Again, not only
He expected to be paid in gold, or paper wort
ten per cent. less than gold, and perhaps find
himself paid in paper worth one-third les
than gold, that is, he is taxed twenty -thre
per cent. of all the money owing to hin
Where is the justice of that? 1t is not jus
even in war time, when it is so frequently done
but in war time, of course, justice may b
overrdden by necessity. But for legislators i
time of peace, with their eyes open, to tax a
creditors, while relieving all Debtors is conf
cation-that is, robbery disguised under til
forms of the law. We do not believe the west
ern men see this, believing them to be entirel
possessed with notion about cheap money
but it is true for all that, as they will speedil
find in the universal collapse of credit ana ri:
of price tor everything except corn. They wi
get little more for that, for the price of corn
limited by European competition, buyers lool
ing to Odessa and Alexandria, instead of Oh
cago; but they will be able to buy nothing, e.
cept at prices sufficient to protect selle
against tie declining value of their paper.
is, however, of DO use to preach political ecol
omy to men who will never see the argument
or seeing, will not believe them. The Unite
States must learn its lesson as France an
England did in the Mississippi Scheme and tt
South Sea Bubble, and our concern is witch OF
own people"