Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1876-09-20

ana manufactures. ENeTYWheIe lht alb'a'
breadth Of land possible was used for agri-
cultural purposes, and new factories OF all
sorts sprang into existence under the ruling |
prices Of manufactured products The PEG |
pie, as well as the publcists, had forgotten
that the prices were inflated by two causes,
first, the enormous aud unparalleled demand, |
and, second, the facility with which the gov
eminent used its power for the manufacture
of currency. The margin between gold and
paper stimulated every form Of speculative
enterprise, because capitalists could com
mand from one dollar and twenty cents 10
two dollars in bonds for every dollar in gold
they loaned. Bonds were paid for in paper,
and payable both principal and interest in
gold. Hence borrowing was easy. Any
state, town, corporation, of ordinary credit.
could get all the money that was desired.
The initiation of the circulation, and th.
stimulus applied 10 industry by high price
together with the facility for borrowing, ex
cited men to invest large sums on municipal
government and corporation credit in the
wide extension Of the railroad system of the
country Old roads, finding it easy to OBJ
tain money and new roads, with brilliant
promises of success with untold mines OF
wealth in the beautiful scenery they ira
versed, or in the country they opened to set
Element, threw their bonds in limitess proiu-
sion on the market The building of new
railroads could not keep pace with the pub
lie eagemess, and thus the country, in many
portions Of it, is burdened with debts as
sumed by the people, and is borne down I'M
der the weight of taxation. Small cities,
like Portland, Maine, or Springfield, Mass
have issued their bonds for millions of dol
lars, while small towns along the routes Of
railroads have subjected themselves to a
long course of heavy taxation to foster these
internal improvements.
In many cases, this increased taxation has
no appreciate advantage to offset it, In
other cases the burden Of it is considerably
lightened by local gains. But it is safe to
say, that the taxes will be paid 10y those who
will have the least benefit from them. Sub
sequent generations may reap the results Of
our adventures, but we shall do little more
than pay for them. And for this increase
of taxation and diminution of prices and in
come, no one is especially to blame. The
managers Of the railroads and manufactures
of the country, which are now severely suf-
fering in the reaction of prices, are not re-
sponsibe above other men. They have gone
with the tide where all men went with it
When their credit was only limited by theil
capacity to borrow and the public was evei
projecting new and costly enterprises and
asking their aid it is not strange that tn,
leading railroad corporations of the country
should have tried to keep pace in their ex
tensions with the growth of manufactures
and productive industry, and sought tn
public welfare by increasing facilities o
transportation. Theyare suffering with tn
depression Of manufactures aud general bust
ness. But they acted wisely and their worl
will stand and ultimately enhance the public
wealth and welfare. All taxation for per
manent public improvements comes back
like bread sown on the waters, after man,
days. The population and business of tn
country will grow to the dimensions Of GU
extended manufacturing and railroad sys
TENS The next generation will reap wha
we have sown.
1t must, however, be borne in mind tina
any debt that is to be paid by taxation o
otherwise is a serious drawback on the pro,
perity Of the country. 1t depletes the publ
resources by depicting individual resources
It paralyzes trade between individuals an
different sections. 1t takes so much out G
current income or disable capital. A debt
a bad thing to him who owes it and goo
thing TO the owner of it. And if the credito
is a foreigner, it is so much the worse for tn
country. A debt owed abroad is sort {
public spoliation. 1t acts injuriously upo
all parts of the country. Taxation to me,
it does not return in other forms to benei
our resources. 1t is not like the exhaatio
of water from our lakes and rivers TO /
poured back again in rain on our mountain
of lakes and rivers, without any rainfall
Hence in so far as our various debts are du
to foreign holders the taxation TO meet thel
is an injury rather than benefit to our r.
sources. They gave us paper for our deb
and we give them gold wherewith to pay i
The balance is against us and our facility
borrowing proves our great drawback an
peril now. And it looks now as if the who
debt of the government might be absorbe
by foreign capitalists at low rates of interes
1t is very serious question, howeve
whether such an improvement of the cred
of the country may not result in long an
fatal business depression. II is also
serious question whether this improyemer
of the credit OF the government will not ten
to weaken the credit of the hundreds of co
porations which are now struggling und,
low prices and diminished profits with larl
rates OF interest. tits real patriotic luxul
to have a strong national credit, aud "
after all, the practical working of it may
as when the big fish swallows all the lit
fish in the pool The Strengthening of Il
national credit will make the weak debto
of the country still weaker, so that we ma
look in the next year or two for gradl
failing Of those who cannot stand withol
support We notice that such corporate
as the Delaware and Hudson Canal CompaE
has been obliged to succumb. 1t would NJ
be singular if other companies of still larg'
resources and liabilities should soon folio,
The serious difficulty in the way of all co
porations which have been borrowing on Il
hope Of future gains, and extending the
enterprises in expectation of larger bushes
is that their rate of interest remains Il
same, while the government credit is stiffe
ing. Their liabilities increase faster tina
their resources. As il becomes certain thu
government can meet its debt by taxatio
its credit improves and all the weak
credits 60 to the wall. 1t is like the pre-
ence Of an iron kettle among earthern ware
That which can be shaken and broken W
disappear II is quite likely that the shall
and uncertain securities of the country W
very soon vanish out Of sight. We know
men now who have hundreds Of thousan'
Of such securities in their pockets and wou
L. La A. e.. &