River Falls journal. [volume] (River Falls, Pierce County, Wis.) 1872-2019, 1879-10-02

hard to make it appear that contraction caused
the panic of 1878. For these loans were all
issued before the end of 1865 none of them had
more than three years to run, so they All
matured and were paid or funded before the
end of 1868 The panic did not come till near
the end of 1878, or five years after the con-
traction was completed. Now, If this was the
contract ton and il caused shrinkage OF values,
and the shrnkage caused the panic, why didn't
the values shrink and the panic come at the
time of the con traction. On the contrary, we
are told that these very years, 90, oI ana 6S,
were among the most prosperous years we ever
had According TO their own arguments, during
the very three years that two.thirds OF the
currency was stolen from the people, the people
had great prosperity.
THE PAPER CURRENCY FROM 1868 TO 1873
was as follows:
s72o .4l2 COZ
1869. 693. 946,056
.5s'.' 80
loI2 IoS.oaoooo
I5O,O6256S
will be seen that it declined between '6S
and SO little over 26 millions, and that from 69
till f73 there was steady increase In the
amount in all to over S56,000,000 If we use the
gold value of the currency which represents its
actual business pure hasing power the con-
trast is still more remarkable. The gold value
of currency at the end of the fiscal year. June so.
1858, was $5o5, COG, 2S4i at the end Of the fiscal
years June 3d. 1878, it was S64s ,054 $50. showing
an increase of real business power OF $l43O 45 652
Still, VIC are told contraction caused the panic.
BURNING GREENBACKs.
1t has been SAID, that Secretary Boutwell,, in
his report of 1872, said 100000 600 of green
backs, fractional currency and National Bank
notes were burned in that year, and this, he
says, was of itself enough to cause the panic.
4 little attention to the law will explain that.
The law of February 4, 1865, ordered the Secre-
tary to stop the retiring or canceling of green
backs as follows:
AN ACT TO SUSPEND THE FURTHER REDUc-
TIoN OF THE CURRENCY.
mi "A ca 4l.,,
of this act the authority of the Secretary of the
Treasury to make any reduction of the cur
rency by retiring or canceling United states
notes, shall be, and is hereby, suspended; Dat
nothing herein contained shall preUent the cGrceG-
tion and destruction Of mutiLdfed United States
notes and the replacing Of the same tcf notes Of the
same character and amount"
This law was in full force in 1872, so that the
destruction referred to by Sec. Boutwell, is eX-
The above tables show that the amount of cur
rency was greater in " than in II and larger
in '73 than ~ 1t is just such miserably foolish
and superficial and false statements as these
that have muddled and bedeviled peoples
minds, till many of them think they would be
justified in Instruction.
FACTS ABOUT GREENBAcKs.
The greenbacks were issued under the three
acts of February %, and July IL, 1862, and of
March 3, 1868. Each act authorized $3.50 000, 900.
But the first act provided that 80 900 600 of that
amount should be used to take up demand
notes." so that at no time the amount of both
of July IL, 1862, provided that $500 600 of its
amount should be used only as a reserve to
redeem temporary loan certificates; the act of
March 3, 1868, authorized $3.50, 900 900, so that
$450,000,000 was the total amount authorized
S50,000,000 of which were to be issued for a
specific Temporary purpose alone and when
used for that purpose to be retired again as
quickly as possible and in harmony with all this
the law of June 30, 1864 was passed by the I'M
animous vote of both houses of Congress; ''for
shall the total amount of United States notes
Issued issued exceed
and such additional amount not to exceed $5n,-
100000, as may be temporarily required for the
redemption Of temporary loans"
The act of April II, 1866, authorized the Secre-
tary, sat his discretion, to dispose of my bonds
authorized by act of March 8, 1865 (being sos,
5-20s of 1865, and the bonds known as consols of
1865 1867, and 1869 for lawful money of the
United States and for Treasury notes. whether
bearing interest or not The law, however,
said: Nothing herein contained shall be con-
strued to authorize any increase of the public
debt" and further: 'Prorided That of United
States notes not more than sl0,0OO,00O may lie
retired and cancelled within six months from
the passage of this act and thereafter not more
than 81, 0000 600 in any one month";
Under this act S44, 100000 of the 100000, 900
were retired up to February 4, 1868, when the
act quoted above was passed forbiddng the
further reduction of the currency" But this |
81 900 was not burped or destroyed, for
$26, 900, 600 of it was issued at the time of the
panic of 1873, and the whole amount was found
to be on hand in the Treasury, the Secretary
and the President holding it to be cash in the
at rest by resolution declaring this to be the
proper construction of the law. So no green |
backs seem to have been burned to make room |
for an increase of the interest bearing debt.
THE RESUMPTION ACT.
The resumption act provided that when 400
of new National Bank notes were issued, Ss0of
greenbacks should be retired. But this did not
effect contraction, for Is per cent more bank cur.
rencyiWas issued than greenbacks retired. The
object was to reduce greenbacks to $500 600 600
to enable the government to maintain resunlp.
ton. But when the greenbacks had been re-
duced to S346 6s1 DIG further reduction was sus
pended, and that is tile amount now outstand
ing. l repeat that not one dollar of the green
backs authorized for currency purposes was
ever funded into interest bearing bonds and de- |
stroyed.
BONDED DEBT IN 1868 AND 1873.
1t is attempted to make out that the bonded
debt has been increased because it is quoted at
only little over 81 100000 then, and at over
81, zoo, 900 now. 1t is correct according to the
technical use of the legal term bonded But if
it is meant to say that the interest bearing debt
has been increased it is not correct. There was
at that time large mass of floating debt, bear
ing high rate of interest, that had not been
funded and so does not appear in the table Of
bonds or bonded debt. The facts are the total
interest bearing debt was on August 81, 1865.
81 3sl $50 29i.96. II is now 81, 797 643 70O-a re.
ducton of $685., sS6 96, instead of an increase
91T697.s7. For next year the interest will be
sS3, 77s.50or S67 203 1887 less than in 1865
As to the point that 1T is harder to pay one dol
lar now than three then. The Governments
credit never was so good as now. nor its finan-
clal condition so easy. There never was time