Staunton vindicator. [volume] (Staunton, Va.) 1860-1896, 1878-06-07

long experience in public life, and the wis
dom you have exhibited ia the past are so
| well fitted TO the task, to give us now your
views on the prospects Of the country for
| Il revival OF it's life and return of its pros
perity.
Respectfully,
VIM. L. Balthls, w. L. Rush,
e. Julian Pratt, Geo. A. Bruce,
John Paris, Alex. III. Fultz,
VIM M. Tate, A. B. Lightner,
Il G.. Stout, Jos. A. WaddelI,
| ID. Beard. N. z. Catett,
Geo. w. Swoope, A. f. Kinney,
+ u. N. Van Leaf, Jno. W. Todd,
r. Turk, William A. Burnett,
d. W. Fauber, Henry J. Churchman
| and others.
STAUNTON, ,
June 3rd, rs. !
| To Messrs. VIM. l.. Ba1ttis, G.. Julian
Pratt, John Paris, Wm. M. 1ate, Z. G.
Stout, d. Beard, e.. W. Sauoope, d. N.
Vamlear, Il. Turk andsothers:
| GENfLEMEN:-I have had the honor to
receive your letter of 2sth Of May, in
which you refer to the gloomy condition
of the financial affairs OF the country, and
the distress which has resulted therefrom,
and ask me to give you my opinion Of the
probable duration of this state Of things,
and of the prospects Of change for the
| better.
Recognizing among the signers Of this
letter many OF my most valued friends and
intelligent neighbors, and properly appre-
ciating the motives which prompted you
to send it, cheerfully comply with your
! request.
Although l lay no claim to the spirit Of
prophecy, yet. having passed the age of sew
enty years, for more than fifty OF which
have been an attentive and thoughtful OBJ
server of passing events. it would be
strange il l had not prOfited in some degree
by my long experience and observation.
Periods of financial revulsion and bust
ness depression, ike. that under which we
are now suffering, are not without prece-
dent in our history-on the contrary, they
frequently occur in countries where great
commercial activity and enterprise exist.
Hence we have seen them prevail from
time to time in England, France and Ger
many, as well as in the United States.
Sometimes they result from what is called
''overtrading," or the injudiciuus invest
| ment of too large an amount OF capital in
| some branch OF business, and sometimes
from unwise legislation; but more frequent
| ly they follow long and exhaustive wars.
! In all cases, however, the Immediate cause
| is the sudden contraction of the currency,
which had been previously unduly expand
! ed. Their CONT. uance is in proportion to
the magnitude Of the causes which pro-
| duced them.
We have had four very distressing revul-
tions in the United States, since the
achievement of our National indepen-
| dence.
| THE PANIC AFTER THE REVOLUTION :
| AIRY WAR.
| The first followed the close of our revo-
| lutionary war, during the progress of which
| contest, the resources of the people were
taxed to the utmost limit. A large debt
was contracted, and the country was food
ed with continental money! which
steadily Deprecated, and finally lost its
purchasing power, leaving our fathers
| without the necessary pecunlary facilities
to carry on the ordinary business, between
man and man. This contin ued until 1871,
| two years after the inauguration of the
government of the United States. In that
year, under the auspices of Alexander
Hamilton, bank of the United States
1 was chartered by Congress, to continue
for twenty years. British capitalists sub
| scribsd literally to the stock of the bank,
and its wise administration contributed
largely to the relief of the people. and the
revival of business. Gradually the traces
OF the devastation occasiOned by the war,
were obiiterated and comparative prosper
ity was restored. This occurred in the
latter part of the eighteenth century. 1t
will thus be seen, that it required the Ia
Dor of ten years, to recover from the effects
of this war.
THE PANIC OF 1919.
From the close of the last century, until
1911, mainly through the agency of the
bank of the United States, the country
was blessed with sound currency, CONVEX
tible at the pleasure of the holder into
gold or silver.
In 1911 the charter of the bank expired,
and for reasons which I need not pause to
consider, congress refused to charter it.;
and hence the country was left without an
Institution competent to provide a safe
and uniform currency. AS might have
been foreseen, state banks, as substitutes,
Sprang up like mushrooms, in all sections,
which flooded the country with irredeem-
able paper money. Under the influence
| OF this expansion fictitious prosperity
was created. Prices of every species Of
property rose to fabulous rates, and spirit
Ut gambling speculation pervaded the
whole country. In 1872, war was declared
against Great Britain, and the demand
! fd the products of agriculture created by
it, intensified the popular delusion that a
plentiful supply OF $50 called) money, and
nominal high prices for every thing were
evidences Of real prosperity.
In tue beginning of 1915 the war closed,
| and sagacious statesmen like Mr.. Calhoun,
Mi Clay and Mr., Lowndes, detected the
cheat, and with the view of restoring a
healthy condition of affairs and the bless
ing OF sound currency, introduced into
congress bill to incorporate the Second
Bank of the United States. In 1916, I'M
der the lead of Mr.. Calhoun, the bill was |
passed and received the sanction of Mr.
Madison.
The bank with capital of $35 OOO 900,
tWo-fifths of which was owned by the gov
eminent of the United States, was or
gained early in 1916. 1t at once addressed |
itself to the duty of restraining the extrav-
agant ISSUES OF the State Banks, by calling
on them to redeem their notes and thus
opened the Way to the resumption of
State Banks to curtail their discounts and
call on their debtors for payment.
A distressing contraction of currency
ensued and there was a general shrlnkage
of values, very similar to that which We
have recently witnessed. This process
of contraction continued from 1917 until
about 1925. During that time the price of
-four declined from $l4 and SIS to So and
81, SO per barrel.
Elhaiiy Cuo oulle lloy "do ieuuCtu WlChln
proper limits and specie payments We're re-
sumed. From that moment business re-
vived-bank notes were equal to specie.
because they were eXchangeable for sptcie
gambling speculations ceased, trade was
established on solid basis; entire coufi-
dence was felt i'll the currency. and every
farmer knew when he sold his proiGcts
that he was getting actual money and not
mere promises TO pay in exchange. /
Thus the second great crisis in our
financial affairs was safely pa ssed, mainly
through the conservative agency of the