The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1875-08-13

me boudtiosue7saua asissbaeks.s iadeca ~
Eli ba difficult to point to q, single act OF
C.,n ornss thaf has not been sbapeu, either
Jiree.iy or coverfls, by their adictation.
Closely eeunecteds In m any ways With the
Treasury Department, they haveiske wise
Influenced almost entirely whatcyer discre'
ZION was left wit.1the Secretary. And what
nas been the result? At the close OF the war
The bonded debt amounted to q .50O .o0oooo
OF this amount 1t was estimated by the Dest
authority in financial matters that near
g., 600. 900. 900 was held Ct home. a market
for few bonds had been found IN Ter.
many. but neither France nor England
had taken any of them whilst hostiiit'es
were pending. At that time, TOO, ABOUT
ope.fonrth Of the national debt was held as
securities in various shapes In the natlonal
banks and other banking INSTITUTIONS. Ipese
facts were stated ny Mr. Kelley in the House
OF Representatives IN speech Maecn =.
1874, and passed uncOntrad!cted' NOW, II
is easy to understand how a community,
when gradually restricted and curtal!eo VI
its previous facilities Of exchange. WIN one
half OF the country re6peEcd Tor oeVeiop-
ment anew. should be compelled 10 part WIN
investment OF snch a character and maShi-
tude bearing 4 lower rate OF interest tnah
that to which the national banks were au-
vancipg their rate of discount, 1n's' AZ
throwing bonds upon the market, Woulu az
feet their transportation abroad, Wnere lates
of interest were lower, and pace nad crea'
ted large demand. Such, at all events WIS
the fact, indisputsbly, and it demenslra..o
that The consequence of q contraction Vi ,lis
currency in its influence upon the oonueu
debt was to send it to England, France, anu
Prussia. Such was the hTst c1ect oi lne
policy Of contraction. But, again, tne oirrG'
effect of contraction, it Is argued, IS 10 equaf
iza currency with gold, and the consumua-
ton of this end will more than compensate
for all the Incident evil involved IN the snip.
nert of gold abroad. Let us examine tu''
Dropostion first in the light OF facts, oeAt III
tie reflected light Of reason. Inc staIstiSs
Of the yold-.abe show that gold on tne ON
dar OF August, 1864, was quoted 81 1877 psi
cent. whilst on the corresponding gay 10
1865 it was quoted at 433 per cent. Here
was an immense decline 10 gold, attributable
solely to Increased confidence 10 the Govern
,neut and its issues. Contraction bad nolh-
iny TO do with it; nevertheless, gold went
down more than one hundred per cent. I'D
one year.
rThis is that almost universal biuncer
which we have been trying for years 10
correct. Mr. BRowS means to say tha'
inasmuch as gold sold at 2533 in August,
1864, and at 1434 in August, 1860. 1t Tell by
over one hundred cents out OF 2o95. but
this, let Us say, was by no means over one
hundred per ceut.-tbat is, 100 in 100. hlr.
Bnowy gives the premium only. We stale
The whole price, premium and prirclpa'.-
Dispatch
Now contrast with this striking decline
SOM facts illustrating the direct elect OF
contrac ion on the relation OF coin ana CUT
rencv. When Mr.. McCuIloch began MS
policy of contraction the volume OF currency
was estimated at over 5000, 900 900. When
he was arrested by the action OF Congress ne
had caused contraction OF 29o,oeo,o
III round numbers; and yet the price OF Solu
was higher than when he began us ra'u
Again, when the policy OF contraction WAS
renewed under Mr. Boutwell, the same re-
suit followed reduction in the volume oil cur
rcncy, and gold rose, as it has recently again
risen from similar causes. 1T Is unnecessary
10 elaborate the figures, as the attendant rise
Indeed. it could not we'll be otherwise.
rhe stringency caused By contraction raised
the value of money, and gold was money.
Speculation also assisted, for gold tillctu'
ate: in value in accordance with the AS
>uned demand for it by the Treasury to pay
yoid interest abroad, and the known demand
,or if by merchants to ply customs duties al
aone. JUDGED, the latter alone would pre-.
dan If n IN
.as the Government itself dlscrlmnatcs
against currency and in favor of gold. refuS
ing the one and accepting the other in large
part of is revenue transactions, the attemV
10 make the two Of equal value Is absurd on
lis face. II the currency were contracted
down ruthie>sIy TO Sl000.000, or even TO
sin lie dollar, and that dollar could not fulfil
the functions or answer the USES OF a
cold dollar under Government regulations,
it could not by any possibility be
mad. colai TO it in value in the
market. 1t must be by some other process.
then, that the end, if deserted, shall be ob-
tanned. 1t has already been shown hO"
,trengi hcning confidence in the Government
credit contributed 10 such result, and II
that credit shall be still further fortified by
Issuing currency Of its own. by absorbing
At low rates the deposits Dow SO insecurely
held. and thus converting at home in three
per cent. currency bonds i large part OF it,
foreign geld debt, and, more than all else, by
receiving its grcenbacks, when issued, a.
paymeut, in whole or in part, for Gus.
toms duties, the approximation will be.
come so close as TO place it entirely
within the power Of the Treasury
to make gold ard gre.nhack> con-
vcrtibe whenever it shall be deemed
advisable No better illustration of this iac'
cou,d be desired than that found in the small
issue Of demand notes, receivable for Gus
toms, which was put tcrh by the Govern
ment at the beginning of the war. No;Wlh-
Standing the great disparity which then OBJ
tanned between gold and all other currency.
those demand notes. receivable for customs,
rose as gold rose, and. within fraction, kept
pace with god untl he whole issue was az
sorbed and Cancelled by the Treasury De-
paitment.
Contraction does mean, however, increase
of the purchasing power Of money, whether
coin or currency, and a corresponding de.
preston in the prices Of mining, OF manu-
lectures. and of agricultural production.
Whist the banker and the Oondholdcr may
be getting richer. every one who tolls to
create wealth is sure to be getting poorer. 1t
is only fair 10 assume, then, that sincere ad-
yocates of such a policy DO recognize it
to be a good thing for the country that the
power of money should he enhanced, its use
in the hands of borrowers curt1iled. and its
supply rendered uncertain. 1t is clearly eyI-
deni, however. that one immediate result is
to discourage all new industries, to compel
old enterprises TO suspend, to Concentrate mo.
ucy upon speculative onj-c.s in frantic
struggle for large gain, cau-ing it to aban.
don the currents OF ordinary trade that yield
moderate profit, and, above all else, by
causing general stagnation, to put the debts