The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1875-10-06
Wendell Phillips I'm Reply 20 Carl
Schurx.

Club, OF this city. General Buffers letter
IS brief and may be passed without comment,
as there will be an opportunity to review his
opinions in detail in connection with his
promised address to the Board Of Trade two
days after the Ohio election. But Mr.. Phil
lips letter is an aggressive answer to the re-
cent speech of Mr.. Schurz, and it will attract
wide attention by its ability and ingenuity,
as well as by the standing of the writer. 1t
IS designed to counterfeit the great effect OF
Mr. Schurz's speech on the public mind, and
IS the ablest argument yet made on that
side OF the question. Mr.. Phillips Is
equipped for such controversy by his
knowledge of the best literature of the
subject and his wonderful facility in per-
verting and misapplying economic truths
He is not ignorant or stupid, like most OF the
infationists, but crotchety and wrong
headed, with unequalled skill to make the
worse appear the better reason" We will
attempt to apply a logical corrective to some
of his positions.
On the first Of his main points Mr..
Phillips argument would be specious If he
did not misapprehend the fact on which it is
based. The fact in question is equally mis-
apprehended by Mr.. Schurz and the dis
putants on the other side, and it is worth
while to point out the error. 1t seems to be
accepted as an incontrovertible truth that
the actual money employed in commercial
transactions is but an insignificant frac-
ton of the ordinary machinery of
payments, the greater part of bust
ness being done by bank checks. Both
parties to the controversy are misled into
fallacious reasoning by accepting this state
ment as fact. In former letter of Mr..
Phillips, published in the HERALD several
weeks ago, he put forward this assumed fact,
and argued from it that an increase of the
greenbacks would nat lead to dangerous infla-
ton because paper money is mere bagatelle
in the whole amount of the currency, which
consists chiefly in bank checks, bills of ex-
change and other forms Of paper credit Mr.
Schurz made use of the same assumed fact
in his recent speech, as means of proving
against Governor Allen, that additional green
backs would not bring money into the hands
of the people, since the first thing done with
the new money would be to deposit it in the
banks, to be afterward transferred by checks.
Mr.. Phillips, in the letter we now publish,
claims the merit of having first introduced
the topic in this controversy, and says IF
Emperor Carl could have afforded to come
home little earlier from his European fes-
tivities and inform himself of the actual
state of the discussion he filings himself in
the middle of, /" he would know that the in
fation side were aware of this fact, and were
'the first to bring it out in this discussion.
Neither side seems to suspect that the
pivot of so much augmentation is no fact at
all but only one-half Of fact and that all
this reasoning on it is irrelevant by oversight
of the neglected half 1t is true enough that
checks are the chief medium of payment in
the commercial centres, but it is not true
elsewhere 1t must be conceded that hardly
any actual money passes in transactions be-
tween dealers and dealers, and if the statis-
tics Of banks and clearing houses covered the
whole business Of the country the amount Of
paper money in circulation would be really
of small consequence. But the truth is
pass from dealers to dealers by checks
are also twice paid for with actual
money in the circuit Of business. Food
and raw materials are for the most part,
purchased at first hand, with actual
money. The farmers do not receive checks
in payment for their wheat, cattle, swine,
wool, fax, cotton, &c, once in hun
dred thousand sales, and the same is true
of teamsters, who carry farm products to the
railroad stations or other points of shipment.
Wages are generally paid in money, and
NEUTRALITY-SUSPICIOUS. of the retail trade of the
country is transacted without any use of
checks. The articles which are transferred
from dealer to dealer by means of checks have
been previously paid for in actual money for
raw materials and wages, and will be again
paid for in actual money when sold
to consumers in the retail trade.
The droyer, for example, pays money
to the farmer for his oxen, and
the butcher sells their flesh for
money, except to a small class of rich Gus
toners in large towns 1t is only the inter
mediate transfers that are made by checks.
1t is, therefore, great fallacy to reason on
the currency, and estimate its necessary
amount on the assumption that transactions
between dealers and dealers in the CONNER
cial centres is type Of the general business
Of the country 1t is superhuous to exam
inc whether Mr.. Phillips or Mr.. Schurz rea-
sons most correctly from premises which we
have shown TO be false, and which both have
accepted on trust from some prominent Eng
| lish writer's
The use which Mr.. Phillips makes Of the
recent financial history Of France and Ger
many rs an argument against Mr.. Schurz is
speoious sophistry which will collapse like a
elittering soap bubble the moment it is
! tnuched. He asks with an air Of triumph,
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