Wood County reporter. [volume] (Grand Rapids [i.e. Wisconsin Rapids], Wis.) 1857-1923, 1876-03-02
Gen. Garfieid's Views.

ablest and most estimable of our public
men, and his experience has been such as 10
give peculiar value to his financial views.
The object of his present article is to show
how far We, as o nation, have drifted from
the sound principles held almost unanimous
~ up TO the close of the war, and to enforce
the reasons for returning to those principles
as soon possible.
Gen. Garfield shows that the father of our
present financial policy, Secretary Chase,
knew perfectly well the dangers to which he
was exposing the country by the adoption
of the system of irredeemable paper cur
rency to which he was driven by overwhelm-
ing necessity. In 1862, when some one in
conversation had defined motion as "the
spirit of God made manifest in matter" the
Secretary said " If that is a good defini-
ton, then legal-tender notes must be the
devil made manifest in paper; for TO man
can forcsee what mischief they may do when
they are once let loose.' Quotations are
made from the Congressional speeches of
Thaddeus Stevens, Senators Fessenden and
Sumner, and others, to prove that the legal
tender system was only regarded as an alb
solutely necessary war measure, to be relin-
pushed as soon as the danger should be
over. Even in 1865 the House of Represen-
tativcs reiterated the same position;
but since then there has grown up a
soft-money party which, without much con-
sistency in the views of its several subdivis-
ions, will concentrate its forces for the final
battle of 1876. Gen. Garfield then quotes
from the soft-mouey champions, like Judge
Kelley, Gen. Butler and others, showing
those fallacies and extravagancies which are
sufficiently familiar to the public. He
shows, too, that every one of these absurdi-
ties is not new-they have all been put
forth by English theorists in former times,
and nearly all have been practically exploded
as thoroughly as John Laws schemes.
Against them all stands the impregnable
doctrine Of hard money, which Gen Garfield
elucldates with such admirable directness
and force. The functions of coin in general
are well understood; but the relations of pa
per to cOin-the point where the dangers of
excessive paper-issues take their rise-are
rarely so well statad as in this article It
is pointed out that credit is not capital, but
the permission given to one man to use the
capital Of another. Gen. Garfield SAYS:
Frequently, however, the capital loaned is not
actually transferred to the borrower, but awritten
evidence of his title to it is given instead If this
title is transferable it may be used as substitute
for money; for, within certain limits it has the
same purchasing power. When these evidences of
credit are in the form of checks and drafts bills
OF exchange and promssory notes, they are largely
used as substitutes for money, and very greatly
facilitate exchanges. But all are based upon con-
fdence, upon the belief that they represent truly
RI
tai, measured by real money, to be delivered on
demand.
These evidences of credit have become in mod
ern times, the chief instruments of exchange The
bank has become as Indispensable to the exchange
of values as the railroads is to the transportation of
merchandise. 1t is the institution of credit by
means of which these various substitutes for
money are made available. 1t has been shown
that not less than 80 per cent of all the exchanges
In the United States accomplished by means
OF bank credits. The per cent. in England is not
less than 95. Money is now the small change of
commerce. 1t is perhaps owing to this fact that
many are so dazzled by the brilliant achievement
OF credit as to forget that is the shadow of capt.
tai not its substance that it is the sign the brill
liant sign, but not the thing signifed Let it be
constantly borne in mind that the check the draft
the bill of exchange, the prOmissOry note are all
evidences of debt, Of money to be paid If not.
they fictitious and fraudulent If the real CAP
ital on which they are based be DESTROYED they
fall with it and become utterly worthless If con-
hdence in their prompt payment be impaired they
immediately depreciate in proportion to the dis
trust.
\Of that character is our greenback. It is
an evidence of debt, promise to pay It
is not money, and no power on earth can
make it money. 1t is a title to money, but
can only be made equal to money when the
de.tor performs his promise FWhen that
is DONE" says Mr.. Garfield, "and when the
community knows, by actual test, that it
will continue to be done, them and not until
then, this credit-currency viii in fact be the
honest equivalent of money" When that
point is attained reasons of convenience
will ordinarily make paper preferred to coin
and will give it its highest efficiency. Any
thing short of this complete convertibility
depreciates the paper currency, drives away
gold, introduces constant fluctuations of
prices, cuts down our foreign trade on both
its export and import sides, gives stimu-
lus to the widest speculation, and ruins the
laboring man. There has not been a finan-
clal evil which has cursed the country since
the war that has not been due to this cause
of an irredeemable currency, though other
influences have sometimes co-Operated with
it,
Gen. Garieldscloses his paper-of which
we have given but mere sketch--with
powerful statement of the duty now resting
upon the Government to restore the con-
vertibility of paper and coin, to redeem its
promises, to give the people sound money.
The hardships of the process, he believes,
have been grossly Ovcr-estimated. He says:
Z" l am not able to see why the approach 20
specie may not be made so gradual that the
fluctuation in any one month will be less
than that which we have suffered from
month TO month since 1869. We have trav-
eled more than half the distance which then
separated US from the gold standard. A scale
of appreciation like that by which England
resumed in 1921 would greatly mitigate the
hardships arising from the movement.
Those who believe that the volume of our
currency is but little above its normal level
need not fear that there will be much con-
traction; for, with free banking, they may
be sure that all the paper which can be an
actual substitute for money viii remain in
circulation. No other ought to circulate"
Resumption, he thinks, could have been ac-
complished more easily in 1867 than it can
be in 1879, and it can be accomplished more