The Worthington advance. [volume] (Worthington, Minn.) 1874-1908, 1875-10-08

graded to ''middle TENOR Then thav
were stratified into new tenor :irst', and
''new tenor second" In l740 the paper
issue Of Massachusetts reduced to sold
tenor over f2,46G,7 About l740.
Parliament ransomed Louisbourg from
the colonies. The share of Massachu-
setts was f138,649, which, at eleven for
one. as the currency was then degraded,
4 would nearly extinguish it. It was pro.
posed to use>this SUN, as far as it would
60, for that purpose, and to call in the
rest by tax. 1t was so done, and the end
thus being reached. prices adjusted them
selves to the new order. Trade revived.
Ship building was renewed. The people
ceased to move away. 80 ~
The history of the other colonies is so
nearly the same that it would be mere
reiteration to repeat it. - =! !;
Then came the continental currency
increase from time to time, under such
arguments as you adduce. 1t was never
redeemed.
The history Of our country during the
present century is gloomy with the record
! OF periodical panics, such as struck US.
when Jay Cooke failed in 1873, all caused
by over expansion by the banks. These
happened in 1915, 1919. 1925. 1884, 1887,
1889, 1853, 1857. For time before these
dates everything seemed prosperous. The
people were tempted into abnormal busi-
ness operations. Those operations filled
the volumes of the currency-em employed
it ali-were conducted largely on credit,
and when the day of the payment came,
as come it must to us of this generation,
suspension, distress, want of employment
followed. -, I do not say that expansion
was the sole cause of these troubles. It
waS.. however, coincidcnt with and the
main cause Of them all.
Passing to other countries, we have the
same language from their history.
The suspension Of the Bank Of England
in 1907, which continued, I think, until
1921, eventually unsettled values, pro.
duced distress, and threw men out Of en-
ployment.
In dealing with the situation the sturdy
honesty Of the English character was
fully shown. In 1910 the famous Bulli.
on Committee made its report and formu-
lated the following axioms Of finance.
l. The amount of gold in the world
will perform the exchange
of the world. If there be
more or less it will only affect the aver
age level of prices the world over. ::
2. Every nation will have that porto
of the stock ofgold in the world which is
proportioned to it's trade. Each nation
will have just as much as it needs.
3. A better and worse currency can.
not circulate together. The worse will
drive out the better.
This report, which was revelation
financial philosophy delivered at an un-
propitious time, was hotly assailed by
every argument which was used at De-
troit. 1t was said that paper had depre.
ciated; that it could be made money by
common consent; that sovereign was an
ideal unit-a ''barren idcallty' at that
that paper money was capital and would
cause prosperity by being plentiful; that
the country had ''grown up" to the in.
creased currency. Every sophistry
which has ever bewildercd finance was re-
peated in a thousand different shapes,
and If the volume Of paper money had
then been fixed in Eng land as it now is
with us there can be no doubt that the
elastic theory would have been broached.
/ Mr.. Van Sittart moved in Parliament,
as counter to the resolution proposed by
the convention, that t'the pound sterling
has no relation to any weight of metal Of
a given fineness; that bank-notes have
hitherto been, and are at this time, held
in public estimation to be equivalezt to
the lcga! coin of the realm.'' This reso-
luton was adopted. Parliament solnme.
ly decided that guinea was equal to 4
one-pound note and shilling, when E10O
in paper, would buy only ESQ IN gold.
Expansion then began, and distress
rode close behind it. In 1919, Mr.. Peel
recanted the opinion which he had ex-
pressed in 1910, by voting against the
Bullion Report, and a statute for resump.
ton was devised. passed and executed.
From the time when resumption became
a certainty. the PROSTATE industries of
the nation began slowly to revive.
Austria and Russia have for many
years been endeavoring to extricate
themselves from the same position
in which We now are, by every
device of a ''new way to pay old dcbts.'
You refer in terms Of great impressive
ness to the distress now prevalent. I
think you have overdrawn the picture.
1t seems to nae that We have passed the
point of extreme distress. We have
often been afflicted in tho same way and
survived. and again become prosperous
without communistic riots or spoliations.
But the extent of the distress does not
and cannot vary the principles Of finance.
When infringed, as We have infringed
them, they work out rctribution without
Ditv unon tho 6iStracx which cauSed the
infringement.
You admit that these resolutions do
not prescribe that the bonds or the green
backs which they call for shall be re-
deemed in gold. You no doubt stated
your personal convictions when you said
in the convention that they should be re-
deemed in: gold or its equivalent. The
country will interpret the resolutions diff.
fcrently. The fourth resolution proposes
to redeem the igrcenbacks in bonds, but
| nothing is said 'As to the redemption of
the bonds themselves. But concede. that
thai. it is implied that the debt thus to
be created is redecmable in specie. What
is such an implication worth when no
time is fixed for the performance Of the
implied. promise! Even if the currency
is Increased to the full measure demand.
ed BY, the resolutions the concurrent
voice Of all experience tells us that bust, ,
ness will soon absorb it. Will We be any
better off than we are to-day! On the
contrary our condition will be far worse.
Our disease will then have progressed be-
yond the remcdy-we shall die Of slim
ulus which has lostiits power to revive.
We ca7, handle the present debt, in.