New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-07-10


ysucing and speculation Is increasing which must be
contracted II similar disasters would be avoided
There are indications Of real and permanent PROS
pcrty in large nporaons or foreign fabrics IN the
heavy operations at our commercial marts In the splen-
did fortunes reported to be made by sklful manipu|
tons at the gold the stock board no evidences Oh
increasing wealth in the facts that railroads ana steam
boats are crowded with passengers and hotels WIN
guests that cities full TO OVERLOOKING aud rents ana
the prices Of the necessarcs Of life well IA luxuries
daily advancing, All these things prove rather thH'
u foreign debt is being created; that the num-
Der Of producers Is increasing, aud that productive
industry is bong diminished. There is no fact more
manifest than that the plethora o. paper money Is not
only undermining the morals OF tho people by enconr
aging and extravaganza but striking al the root
of our material prosperity by diminishing labor INC
er is not al present beyond he control iegislohon oW
is daiy ncreasng anil II not SpecdHy ch'cked TH az
no distant day cumiade in widcsprcdd disaster inc
remedy and the only remedy within the control OF Ton
grcss is in the opinion OF the Secretary to be iouu !"
the reduction Of the currency.
The above paragraphs were written nearly
ten years ago. We believe that few intelli-
gent. unprcjudiced business men will now dis
pute their truth. or deny that the restoration
of specie payments by gradual contraction OF
the paper issues, as recommended by MI. Nc
CullOci. was the proper one. AS long as the
war continued the initiation of the currency,
being accompanied by a genuine distrrst OF It's
future value, owing to the uncertainties OF
the result of the great struggle, rather dlmIn-
ished than increased the aggregate OF private
and corporate indebtedness. TO the truth OF
this statement we have not only the concur
rent testimony of Mr.. McCulloch and Mr.
Carey, who are at swords poiuts on almost
every question relating to the currency, Dut
also ample statistical proof. In 1850 ana
1866 the National banks were OvcruOwing
with unemployed money, and they held besides
a hundred million dollars in United States
stocks, which they subsequently converted
into cash. Let ~ consider for a moment
few of these statistics.
In Aprii. 1866, the total Of the loans and
discounts, exclusive of United States bonds
and including the amounts due from other
banks. was S646, 100000. Adding the United
States bonds, the total was S1,OSS,OOo,OO0.
At the end of April 1875, Us appears by the
last report from the Controller of the Cur
rency, their loans and discounts, exclusive OF
United States bonds, were 81, 136, 100000, be-
ing an increase of 70 pei cent. With the United
States bonds added the total was 81 OOO,-
900. In 1866 the banks held Sail ,j0O,O 900 i'll
United States bonds and securities, OF which only
S315, $4,000 were Oh deposit as security for
circulating notes. In 1879 but SlO6,oOo,Ooo
in United States stocks were held, OF when
1877, 0OO,O0 were for the security OF the
circulation. In 1866, $24S,90O,O0O in crcu-
lating notes were outstanding. In 1879 the
total was $500, 800, 900. In 1866 the legal
tenders, fractional currency, and National
bank bills, constituting the true cash
reserve of the banks, amounted to %2ll.-
100000. In 1870 they amounted TO
$I66, 600, 900, including SD, 100000 charged
against the Treasury Redemption fund. In
1866 the deposits, including the sums
due TO other banks, We're SG7l,SoO,OOO.
I'm 1879 they were 1898, 100000. TO sum mp
the foregoing comparisons with all possible
brcyitv, there l. not an item IN WLich me chdnJe
since 1866 is not IN tie direction Of intuition.
Speaking generally Of the banks rs whole,
their circulation is safe but their liabilities to
deposors and shareholders are far from being
a. well secured ~ they were nine years ago.
In 1860 1t WIS objected to Il reduction OF the
paper circulation that it "wOuld ombarrass the
"National banks" Mr.. McCuloch's rcjGnder
was:
II t. better that the banks should he embarrassed now
than l,aniruped hereafter Their business and their
customers are now under their control. What Will he
their condition la these respects if the expansion conn
ucs and s0ells year two longer 1t is difficult to pre-
diet. While there has been unhealthy expansion OF
credits in tho United States for which the banks have
not been largely responsible there has been none by
which they have not been Ultimately the losers.
Every day that .Iacon is deferred increa.s tho DIFF
fculiy of preventing financial collapse. Prices ana
credits ,c not reqia they The tide viii either
rccec advance ana it will not Tcccde without the
crcise of the controlling power of Congress
We must bring this article to a close with
out touching Mr.. McCullocl's views Oil the ill.,
portant subject of foreign Indebtedness. We
trust however, that we have sufficiently es-
tabilshcd the fact that the evils of which Mr.
McCulloch gave us timely warning Ill 1865
are the consequences of imitation and not of
contraction, as the infiationists have the hardi-
hood to assert. Mr.. McCullOch, in the
same report from which we have nil along
been quoting, expresses his fears " that the
"inabiliiy of the Government to reduce its cir
EQUATION rapidly enough " will he more peril
GUS than contraction. The Bank of France for
nearly two years has been steadily contracting
its issues vet the total of lis loans, far from
increasing. has fallen to less than one-half it's
amount twcnly-Onc months ago, when the re-
duction of the circulation was begun. History,
science, and contemporary facts are against
the infationists. Will The people consent to
take their poison a second timcl 1t is for
Ohio TO answer.