Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1878-08-08
From the New Republic.
Did Contraction Cause the Com
mercial Crisis i'm 1873?

Samuel +. Carey, the champion organizer and
leader of the so-calltd National Greenback- Labor
party in Ohio, assembled his followers in State
Convention at Columbus on the 23d of July. As
chairman Of the Committee Resolutions he re-
ported a platform, in which he charges a. u crime
against the Republican party 'the enormous con-
traction Of the volume OF the circulating medium"
This Is the cry of the self constituted National
party wherever organized; it is the burthen Of the
charge made by the Democratic party, and by
every individual throughout the Union, who, BY
over-specuation, extravaganza, or idleuess, finds
himself without funds to meet his indebtedness.
1t is easy matter TO prefer charges, but it is an
other thing 10 prove them. In this case careful
examination Of the facts affords the most conclu-
sive ev deuce that the complaint is without even
the shadow Of foundation in truth. The official
figures in the United States Treasury show that
on june 80, 1869, the total amount OF Stale bank,
Government and National bank currency 10 crcu-
laton was S693 ,946, C566l. On June 30, 1870,
this amount was increased to 500, 1873, SOFAS; in
1871 to S7l7 ,7jl 06: in 1872, to S73S 903.-
81; and in 1878 to $3.50, 062, 1854 This was the
year of the commercial panic, during the four
years Immediately preceding which there had been
"a steady Increase in the circulation OF currency,
amounting in the aggregate to over $50 900 900.
w it'll these official figures before the public, will
Mr. aley have the candor to explain his position
or admit that his charge is a witul attempt to de-
celve his fellow citizens vital national ques-
ton In 1874, the year following the commence
ment of the panic, there was further Increase Of
S3l ,i3S, 547 %; but in the following year-lS75-
II "A .,,a- I'll 81
was no demand for money which the banks
considered 1t safe TO grant loans. Bankers SAID TO
to their confidential friends I'VE have hundreds
of thousands of dollars slowed away IN the safes,
and would be glad to let II out at low lAlerest
good paper, but we dare not do 1t on the securities
offered. We have an abundance OF calls-press
ing sppicaIons-tOr money, but we have no con-
fdence in the paper presented. Over-speculation
has produced crisis that has found every body in
debt and nearly every kind oil property heavily
mortgaged. Our banks cannot advance money on
the securities offered, unless 1t Is done al the rsk
of losing every thing and going into bankruptcy"
ln this state OF ailaiIs what could the banks do
Their safes became burdened with Government
and national bank currency, and their only relief
in returning portion OF 1t to the l nlted
States Treasury and " ithdrawlng corresponding
amount of their OVID securities there deposited III
Government bonds, causing to that extent con-
traction OF the curlency-not, however, OF that IN
actual circulation, but Of that which had failed to
ma circulation IN sale investments.
1t is unfortunate tor the true interests of the
country that people will allow themselves to be
deceived by political spectators. On great
tonal questions, anu especially on the subject of
the currency and the national credit, every voter
should read, examine, and think and act tor him
self. No political party could have been more
f.ithful anu successful imam the Republican party
has been IN the management OF the national imam
ces. 1t came into power when the Democratic
party mad nearly ruined the credit OF the Govern
ment, or at least had reduced Its borrowing power
10 such an extent that II was with difficulty the
buchanan adm nistratIon could obtao II small loan
OF SlO,00O0U0 Ia fact, 1t obtained only S9,UO0OOJ
OF the amount required and that IN small sums, Tor
a considerable portion OF which interest OF twelve
per cent. per anuum was paid. In 1862 Secretary
Chase called in these Obligations, paid the amounts
and stopped the rulnous rates OF interests paid
under the Buchanan contract. From that penud
to the present, Notwithstanding the enormous ex
penses OF the Democratic rebellion aud the burden
of the Democratic national debt, the Republican
party has steadily Increased the credit aud bonows
ing power of the Government until 1t Is to-day
funding the pubic debt al tour per cent. interest
per annum-Just one-tnlrd OF the rate paid by the
Democratic party prior to its gong out oi power.
These are results OF which few nations can boast,
and vi wblca toe world presents but very ex-
amp,es.