The sun. [volume] (New York [N.Y.]) 1833-1916, 1875-10-09
WENDELL PHILLIPs ANSWERED.
Carl Schurz showing Up the Brilliant Nom
sense Of the Grcat Bostonian's Financial
Theories-Also, n Dash ut GOV. Allen.
n Iotsta not

| ST. LOUIS, Oct. ..
| To ne Eh,or or the C.ncfpndn Commercial
DEAR SIRE Last night l returned from
Ohio, and found your despatch intimatng de-
sire that I should promptly reply TO the letter Of
MIR Wendell Phillips, published In the Neic York
Hcfuld of Oct 0. I have just read that letter.
and consider 1t scarcely necessary that should
answer 1t. still, II you desire 1t Will devote a
few hours to the task.
Mr. Phillips Is not known as an elegant
writer. but the tone Of his letter Is so nippant,
offensive. so small and supercilous in personal
attack. that should have been inclined to con-
slider It hoax had l not found in IL fair col
lection OF those crudites and startling misap-
prehenslons OF principles and facts distinguish
ing all Mr.. Phlips's productions on the subject
Of finance. l Will take - seridtim the four
points of my speech which Mr.. Phillips attempts
to disprove.
First, quote the following passage from Gov.
Aliens speech at Marietta; "These men "
| (meaning his opponents), 80 about and cry,
There is too much money IN this country' |
wish to God we could nnd soms Of It. Laugh
teri Thcy say IL Is IN the banks. Is n3
IL might lust as well for the pur-
! bottom Of the Pacific Ocean, for II II IL not in
circulation II is no more money than so IN ny
culate as medium for carrying on the ex-
changes Of the country" Then proceeded by
! OF the business transactions OF the country are
effected by the transfer Of bank accounts through
! checks, notes, and bills Of exchange-that, I'm
fact, the circulation OF money tak kes place mostly
through the binks-to show the brilliant non
sense sense OF Gov. Aliens statements Mr.. Phillips
tells US that he and Gov. Allen were aware Of
those facts. IL they were, could they still be
guilty OF so earine an absurdity as that money
| in bank might Just well for the purposes OF
money and currency be AT the bottom Of the
Pacific Ocean2 Although have never been an
admirer Of Mr. Phillips financial theoiies, yet
always considered him far less foolish than
Gov. Allen: II he insists on stepping down to
| Gov. Aliens level, be itsO.
But here Is something still moro curious. Mr.
Phillips says the very fact that large a pro-
| portion OF the business transactions OF the
country are effected by means Of checks, notes,
and bills through the banks, ts the corner stone
| OF their grayest charges against our present
system OF finance. He argues that as checks,
notes, and bills of exchange are 30 performing
the functions Of currencv the banks are able at
will to initiate and contract the currency, and he
and his friends mean to break this " aristocracy
OF money manufacture" by introducing their
system OF greenbacks and inconveruble bonds,
which he says will leave this power Of initiation
ana contraction In the hands Of the whole mass
OF business men.
There Is so monstrous an accumulation OF Alb
sutdlties in the proposition that scarcely know
woere TO begin and where to end In dssecting
them. VINO Is H. that draws cnecks and makes
notes and bills Of exchange2 Who creates that
KIND OF currency winch consists In checks,
ton and Imitation OF which Mr. Phillips speaks2
Il Is not done oy the banks, outi Is done by
that same "wnole mass Of the business men
to whom MIR. FhilDs speaks OF giving that
power, as II tEey now were deprived of II. IL
the business men did not do Il under our pres
ent system. 1t would lot be done at ALL
In the year 1873, according TO Clearing House
pissed to the amount OF sas,coooo.ooo @ in New New
YORK alone In making purchases aud payments;
ths, medium u se,ns IN 'sS ssao Si
tic transactions, his System of greenbacks and
In ffe9ntrovertible bonds wipe out these facil-
itite which the genius Of modern civilization
has developed, and reduce the immeasuraDlo
compass and the endless variety OF our business
n ehaa n.HI NAn Als.s.
band to hand Of greenbacks. Mr.. Phillips pre-
tends to be a msn OF progress. What Is this but
return 20 the clumsy methods Of barbaIism7
Or does he want To facilitate those business
Transactions with his system of ntercontroverti-
Government to discount notes and sell sills ,S Of
exchange and accommodate private business
with time loans7 Is that possiblel
Second, sir. Phillips impugus my statement,
or rather the doctrine ot every respectable
OF an irrcdeemable paper currency will result IN
its depreciation. lie saws " suppose W. double
ne rem currency 1meanng greenbacksl viii
mat oi ltseli necessarily Increase prices, and es-
peciayEhe price Of gold - and then lie proceeds
TO quote NJ. Carey 70 show that during the war
the premium on gold went up or down ire
spectye OF the quantity OF the paper cur
TI.ency Issue During the war OF course
the FIRST principles governing the value OF
an irfedeeuable paper currency consisting Of
be affected by two things-the ctecit Of tue
G9veInmeht Issuing II and the relation the
ments OF the business OF the country. What ia
II the credit Of the Government depends UPON
Its honest intention To redeem its pledges and
Its present or prospective ability to do so.
But car Mr Philips really De IN earnest when he de
will OF necessity sci upon its value as 10 soid or 10 ~
Suee EersIS ~ purshasins power as soon the
mould ,r9o circulate in gold and notes convertDle
promise. to pay Of a Government must necesSarily
lose 10 value the greater their amour. and lsss the
1, sone oi Argument sogIa inform him iha. there
redesmable paper currency led Continental money
Which vac Increased IN quantity until u 'hrunk in value
had an irredeeina1le money called "assignsis" which
potato There country called Russia and one called
deenAble paper money, concentrating the same prnci
sir Phillips has probably heard Of those things but
there eyidently vast ned Of study left for him
@ st @ Un Of IAN a asI1 hs ssTss also
laon has no connection with prices, aud support OF
Hcouo@y 1e fos sTaf spPheH NM That Uana
noits' bills or checks. as such, DO not
on prices credit Whatever shape gwen and she,ner
passing INTO clrealsli9n or not" hen Mr.. Phiips
eoetrine cannot, 1t seems expect Mr. PHILIPPE 70 be
RoH.r pnt ! Migh! ehpeet h,n 70 bq c4noid Does
quoted, does not speak OF an irreds mlJle paper
6e into coin Is Mr. fs snorsnt 81 Gse' the aI1yss
between an irredeem9be paper money aad currency
so%S9 @ Sss o %osa M SsSs % PrfySasa @ from Sqo
ring to the other
Answering Mr.. Phillps's question as to what
VIII be thought Of an lrreGeemhble currency
Mr. schurZ quotes second volume Political
Economy;
To the Increase OF an inconvertibc currency II per
mted py law, there Is no check The issuers my add
10 u lldcnntey lowering its Vdue and r.sng pucc, in
proportion TnrY may Ia otncr words, depTeciate the
currency without hmit.
Concerning the assertions that paper money
won the battles VI Waterloo and Gettysburg
MT. Schurz says:
Tho question Is not whether irredeemabls paper |
money hAs been used to advantage IA times OF public
emergency when other resources seemed exhausted
put "hethtr an emission OF the large quantities OF
MredeemaDle paper currency will promote extraya-
gance aud corruption.
MT Schurz then argues that history shows |
tnat expansion Ia followed by extravaganza, |
clllng England, Russia, and the United states |
as examples. lie answers the compaI ison oe- |
tween Germany's and Frances financial cond- |
uon by explaining that tue causes OF Germanys |
distress are over-prOducton, oVer-speculation, |
ana overstr' lining OF the credit system; also by |
sweeplng cnanges In tho monetary system.
france, moreover, owes her prosperity, not to a |
supply OF money, for soon as the war calls |
were paid France began sh4rp contraction Of |
her irredeemable currency with a set purpose as
quickly as possible TO return to the same sys-
TEN OF specie payments, which Mr.. Phillips |
wants To run away from.
hr. schurz adds MIR. Phillips attacks my assertion
thai no other system than specie Pigments w
ourtnl values from the arbitrary power OF the 6egern
ment no other can to rent values that stability
NhhOut Nhlcn no sale business calculations