San Marcos free press. [volume] (San Marcos, Tex.) 1877-1892, 1878-08-17

This phrase is associated in the minds
Of the reading world with the picture
of poverty aud the domineering plenty
which, through the characters of Grad.
grind Bounderbv and Blackpool, Dick
ems has drawn with master pen. To-
day the reality Of hard times eonirouts
with q grim visage the people Of the
whole country. Indeed, this reality
is not confined to this country.
Throughout the world there is depres.
sion, stngnation and want, variously
intensified according as local disor-
ders exist. Whatever causes Of this
state Of things may prevail elsewhere.
there appears to be no necessary,
though there is an efficient. cause here.
Profound peace, broken only BY occa.
sional Indiun outbursts, has for fifteen
years enveloped the country. No
desolating plaques have ravaged dis
tricts and withered the arm OF indus
try. No overwhelming calamity has
dried up the sources Of our prosperity.
The crops, except in isolated instances,
have ben abundant. Yet, year by
year, the financial condition grows
worse, and as the months roll by it
becomes more intolerablc. The air is
thick with the evidence. If we read
public address, its mournful refrain
is prostratiou. II we glance over the
official notices, the long lists Of adver-
tised tax sales speak expressively of
the general distress. If we open our
eyes to what is about us, we may see
stagnatiop, decay of trade, and some
times gripping want; and the conclu.
sion is forced upon us that there is q
terrible energy operating with silent
but continued force to produce these
unnatural results. What, then, is this
energy? l. is contraction. Why
should contraction be so injurious, and
why, and in what manner, is it effect.
ed? Whatever may be an individuals
substantial solvency, certain amount
of circulation is requisite to his enter
prise, just as oil, though no part Of a
machine, is necessary to its motion.
If he wishes to build, he cannot pay
for the improvement with property,
for the laborers need their recompense
in form they can make available for
living. If he owes debts and must
pay them in much dearer money than
that in which they were contracted,
he finds the debts growing and his own
values diminishing. Thus it may be
seen that a country may abound in
substantial wealth and yet experience
scarcity and depression which will
arrest improvements, multiply bank
ruptoies, discontinue employments, and
and produce straightforward distress.
This is how contraction is so calamit
Gus. At present contraction takes
place by the action of the treasury de-
partment, in consequence of laws pro-
viding for resumption in 1879. Atthat
time the government must be prepared
to redeem its issues as demanded aud,
with this view, desires to have in cir
culation the minimum amount.
This is the official reason why contrac.
ton takes place, and the manner CT it
is thus: The treasury is authorized
to sell bonds for two purposes. ono to
buy coin, one to fund outstanding
treasury bonds, commonly called green
backs. The treasury has accumulat-
ed some $500, 900. 900 coin, and Is week
ly selling from five to ten millions Of
bonds for greenbacks, which constant
ly reduces the volume, In other
words, the currency is converted into
bonds. This is one way in which con-
traction is effected. Another is
through the action of national banks.
They also must redeem their issues in
1879. To redeem the volume of there
issues is, therefore, their aim and study.
Hence they are chary of renewing
loans, and make few new ones. Also
their cupidity prompts them to con-
tract. They, and others who have
means, have foreseen the fall in values
resulting from the stringeocy. and the
spsculations that may be made. Hence
their interest concurs with prudence in