The daily Argus. (Rock Island, Ill.) 1873-1877, 1875-09-20
Chr: 9aitng aAargb,s,
MIR. Mccul,och,s Letter.

morning, worthy of their NEST serious at
tentlon. They have in it an explanation
OF the business prostration from which thu
country is suffering, which has the ineri
u not being theory extemporized 10 sui
the occasion. The substance of all thai
Mr.. McCulloch tells US to-day may be
found in his official report on the finances
communicated to congress in December.
1868. Ten years have not made it neces.
sary for Mr.. McCulloch to change his opin.
ions. The evils he 1oresaw have come t.
pass, land their causes are as plainly stated
I'm his report of ten years ago as in his let
/ ter of to-day. These causes NAV be
snmmed up In three WORKSHOP much
debt. AT the bottom of 4hat Indebtedness
we ind the inflated and deprecated green
back and bank-1ote currency. There is
now too much Indebtedness, because from
1868 to 1873 there was too much pape,
money An excess of paper money is al
the bottom of our present distress. 1t was
the foundation on which were erected no,
merely our recent speculations, but also
those OF l830-37 and lS5O-57, which in
turn were succeeded by the disastrous re.
actions of the following years,
From 1880 to 1887 the country was only
nominally on specie basis. Too many
banks were permitted to issue notes, their
notes were of smaller denominations than
should be Permitted to exist, and thew
were issued on insufficient security. In
his History of Prices. Tooke maiptains
| that the notes of our banks at this period
and long before their formal suspension
had practically ceased to be convertible
Fullarton says in his book on Currencies:
| Almost every coin under heaven is le-
gal tender there lin the United Statesl.
at certain rate fixed by tariff; and not
very long ago the quantity of foreign gold
in circulation there was supposed to be
as nine to one in proportion to the eircu-
lation of their own eagles.
Parties requiring supply of Spanish
dollars had to buy them in the market at
"a premium seldom under one or two per
cent, and which has been known to rise
even to u per cent" The banks in
those times paid their notes in such
coins as for the moment were cheaoest.
but it was understood that banks ought
not to be called on for coin, and however
much man might be in want of a sum
10 sLecle for expectation, he would be
deferred from applying to bank for the
supply from the fear. of becoming a
marked man in society,"" Daniel Webs
ter, in a speech delivered in the senate in
1888, said: THE circulation of paper
tends to displace coin; 1t may Danish it
altogether; at this very moment it has
''banished it." There can be no doubt
whatever that forty years ago we had too
many banks, issuing too many notes. and
the bulk OF those notes of too small denom-
nations.
We also had facilities of borrowing in
Europe, which, as it afterwards turned out
were OF more injury than benefit to us,
All serious embarrassment growing ont
of commercial intercourse between the
people Of different nations results from
failure in the prompt payment of bal.
ances, and the carrying forward of these
balances by extensions of credits" said
Mr.. McCulloch IN his report for 1865,
The evil OF too much credit is always the
accompaniment OF mania for speculation.
The one breeds the other, or perhaps we
may say that they are merely two names
tor the same thing. But here the iDaa-
tlonists, the advocates of specie payments
wlthoutsp specie and those who are clamor-
GUS tor free banking without specie re-
demptlon, unite In telling US that panics
are Just as severe IN hard money countries
as they. are IN the United States. That we
deny. Mir, McCulloeh's letter shows that
the commercial distress at this time pre-
valent in England is far less severe than
it is with us. The yellow fever is much
more formidable disease than the bilious
fever, though both are fevers. England 10
an older and more crowded country than
the United States, yet she uniformly re
covers more quickly from financial prostra
ton Mercantile, corporate. municipal.
and public credit is more solid in Great
Britain than it is with US, and one cause of
the difference is that since 1921 the notes
of all British banks have been worth
neither more her less than the specified
weights of gold which they promise to nav
The evil which Mr.. McCulloch calls over.
production is the consequence of the ex.
cessive creation of debts. Copsumption
and distribution have been crippled bv
abuses of the debtcreating power. One
class CT the community is practicing econ.
Omy because it has debts which it feels
called upon to nay, Another large class
is thrown out of work and forced to beg
because the enterprises which gave it EN-
pioymeDt can no longer borrow, the capi
tai already obtained by them having in
many cases proved a total loss to the lend
ers: The bankrupt western railroads fall
under this head. A third class has moth
ing to do because the lavish expenditures
OF spectators and Adventures who fancied
they were rich have been nipped in the
bud. All classes are severely bled to sup
port the extravaganza of national, state,
and local governments and to pay the in
terest on enormous debts which have been
contracted for bouleyards, public build
ings, railroads, and political plumber, for
it is now recognized fact that public
tunctionaries steal, or permit to be stolen.
ten times more than the whole body of the
governed would be able to filch without
their aid We venture to dispute that
production ever did or could outstrip con-
sumption were debts and taxes kept withip
proper limits. People are neither too in
dustrious nor too saying. They are, how
ever, too much 10 debt. Those who can
not pay would do we'll to compound with
their creditors and start over again. More
paper money will make things worse in
stead of better-N Y. Tribune.
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go hn