Evening star. [volume] (Washington, D.C.) 1854-1972, 1878-09-30
Secretary Schurz's Speech on The
Finances.

Secretary Schurz delivered his promised
speech on the national finances, in Cincinnati,
Saturday night. lie covered the whole ground
with great thoroUghneSs, and made vigorous
plea for sound currency and the strict main
tenance OF the public faith. He set forth the
real causes Of the crisis and the conditions
TT ceS>ary to sound condition of affairs, and
advocated specie resumption and the reten-
tiOn Of the national banking system as not
only the best for banking purposes, but a use
full auxiliary to the government in the process
of main aiming the currency on a specie basis.
He commenced by saying that from time
fmmemorial, in all countries, it was the habit
government with the responsibility of business
depression and distress. So they do now. 1t
is charged, he continued, that the business
collapse OF 1873 was brought on by contraction
OF the currency. The facts are, however, that
there was contraction from 1855 to 1865. The
collapse did not occur until five years after
during those five years the currency of all
or $56.Cg0G00 more than in lS69. The fact, then,
Lands thus: The currency was contracted be-
tween 1868 and ISIS, and several years of pros
1869 TO 1873 and the collapse of business oc-
CURED. From 1873 TO 1874 the currency was
expanded from $l50 O62,336 to $7Sl i9l 9l6, but
the depression was not only not relieved, but
grew in distressing severity.
Referring to the causes of the disaster of
1873 he directed attention to the fact that at
the same time similar crisis swept over Eu-
ernment could not have been responsible for
all that. lin none of the countries of Europe
was IL currency contraction. There was rather
an expansion, especially in Germany. The
real causes were great wars. resulting i'm i'm
mense destruction and waste of wealth: large
industries ministering TO the work of deStruc-
ten instead OF producing additional wealth:
Tie sinking OF vast capital in undertakings
that could give no immediate return such as
the building OF railroads where they were not
needed; the Introduction of new la6orSavfug
machinery, and melting excessive manuFac-
lures beyond present demand, while speculat.
ing and dealing in all sorts of imaginary val
ues an lmme number of people practically
stilN.ilg TO make money quickly by any means
except solid work; an infatuated faith in the
success OF windy schemes, and an unnatural
Straining of the credit System and finally a.
most everybody believing himself richer than
lie was. and therefore spending more than he
could afford hence wide-Spr extrayagance
and improvdent habits.
If We inquire, Mr.. Schurz continued, what
the currency had to do with this, We shall find
mat IN this country our irTedeemable cur
fency, oy running up prices TO a fictitious
point, stimulated the spirit of reckl .Ssness
and gambling in almost all branches OF enter
prise, thus strengthening all the bad and de-
m0raiizing influences which are usually
active at such period. Such things are apt
TO go on SWimmingly for some time, but ilu-
Sl0ns and lies will not last always especially in
business matters. After While it viii turn
out that 100000 men engaged in active war
fare have consumed wealth and not produced
any: that railroad running from Point No
Gends; that the value of real estate does not
depend on the imagination of the owner; that
corner lots In paper towns, where nobody
lives and nobody intends to live, will not bear
heavy mortgages; that shares in joint stock
companies, however Skillfully ballooned, will
at last become worthless if the enterprise
bears no profits; that men who borrow more
than they can pay must at last break, and
that those who spend more than they earn
will finally become paupers. This light, the
light OF sober truth, usually breaks all OF a
IN hn nrln
To furnish that sound foundation without
which business can have no healthy develop
ment, three things are necessary good ma
tIonaI and individual credit, based upon ma
currency OF real and stable value; safe and
reliable banking system as the depository of
business funds and the machinery of business
In regard to the "siIver dollar of our
fathers Mr.. Schurz said silver coin is the
money for the small transactions of the retail
make it a legal tender FOR lir7ited amount.
But it is not the money for the great transac-
tIonS OF commerce. Is is not the metal 10
serve as a standard measure of value i'm those
transactions. Its weight and halkineSS is one
reason, and the fact that in our times lis
value is subject to violent fluctuations is
another reason for this
The speaker closed with an elaborate de-
tense OF the national banking system. 1t has
passed, he said, through a financial crisis
more distressing perhaps than any that has
ever swept over this land, and not a single
holder Of national bank note has lost cent,
and the whole loss to depositors in national
banks during the period of their existence
amounted to about s6,00o,0O, loss less than
that suffered by depositOrS In state banks and
savings banks this year alone. He then COM
mented upon some of the favorite arguments
against the national banks, such as that they
enjoy privileges oppressive 20 the people that
by their system of drawing interest on their
bonds deposited with the government and
lending out their notes and drawing interest
on them also, they were growing rich at the
monopoly and the embodiment of the money
power. He combatted these points, aud
showed that the national banks were popular
institutions that there are 20S, coo shareholders
in them, more than half of whom hold shares
to the amount of $1,000 or less, and presum-
ably people of limited means who have thus
invested their little surplus.