New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-02-24

although IN time OF war there rs often apparent
prosperity. such appearances are always dcluslve.
War is destructive process and the country as
whole cannot grow rich ont OF ID for the simple rra-
son that 1t cannot make something ont Of nothing
rather, perhaps il should be said something out OF
less han nothing.
The other mi take made in England was in at
tributng he distress Of the times and the scarcity
of money to the course of the Government IN con-
tracing the currency. Perhaps il is sufficient
refutatiOD of this error to say that in 1916, when
the greatest distress felt. no contraction what
ever of the Government currency had occurred
Possibly II would be enough to show the fact that
in 1873 the Government notes in circulation were
10000. 000 while in 1916 they were 80 900, 00O
increase of 100000 But Notwithstanding
this increase in the amount of Government paper,
It is of the greatest importance TO notice that the
amount IN active circulation was now enormously
diminished I'm what way7 By one of the simplest
laws of commercial intercourse. In times OF dis
trust and frequent failures, every bank draws
IN its issues, for the simple reason that 10
IS afraid Of securities When commercial houses are
falling, the banks always increase their deposits:
and this increase Is Just so much drawn from cifcu-
latlon. The Government NAV have out ever 60
much paper and money NAV be ever so much
needed. he people can no more get those deposits
into circulation before confidence is restored than
secretary sherman could get rid Of his bright silver
dollars before the Government began to accept
them. 1t was for this reason that ia England the
currency was for all practical purposes enormously
contracted Just for some years past II has been
in our own country not because of the
Withdrawal of Government notes, Int be-
cause of the accumulation OF money ~ the banks.
oNiiE ~ WIFI ol iUdi filhN tifldi olubbiAl Nh'h
must always precede real commercial prosperity.
The whole matter may be sharply stated IN tins
way. I'm times OF commercial distress what -
wanted rs not more money. hut the means of getting
the money ont OF the banks into circulation. Money
can only be got out Of the banks by means OF col
laterals Anything. therefore, which destroys col
laterals makes hard times No hing IS 50 destructive
OF collatcrals war aud NJ the end of war, hard
times are OccasiOncd by too few collaterals rather
than by too little money.
HORNER's FINAL VICTORY.
In England, at the time Of which we are speaking
u considerable class of men. nc the head of whom
was William Goblet, desired an increase of Govern
ment issues lin short believed that the remedy for
the evils Of the day was imitation When the mat
ter came before Parliament, Homer showed by an
array Of facts and figures which nobody tried 10
question. that what was popularity considered the
cause of great strinIen was really It's result In
the course of his speech he declared con-
ring the proposed measures that the cur
reucy which was 90 prevail was not only uncertain,
but cruel and unjust in its operatons-at one time
upon Those whose income was fixed in
money, AMI 10 all creditors; at another time, when
by some accldeu II was diminished IN amour, TO
all debtors. As long" continued he. rs We had no
standard-nO fixed value Of mOuey-but II was sui
fercd TO rise aud fall like the quicksilver IN
barometer. no man could conduct his property with
any security, or depend upon any sure ana certain
profit"
In lighting this heroic battle Horner wore him
self out. In less than yc?T after tins speech was
made his remains were followed To the grave hy
circle of devoted friends. For time the Nation
needed not his cOunscls, but n ~ satisfaction 10
know thatin the end Parliament and people JOINED 70
render him complete, though tardy, justice. WITHIN
a few years the es'lul necromaEcer NansittaH
was turned over az a laughing stock 10 al future
statesmen and economists while to the temporarily
unsuccessful HOTner they gave their highest aw ara
"A monument IN Westminster Abbey
The next step III advance after the debate Just re-
fcrrcd 10 was made IN 1917. In the previous year,
Horncrs teacher aud friend Ricardo, had published
his work, - Proposals for an Economical ana Secure
Currency On the 2ith Of May, sir Robert Peel
brought forward q set of ministerial resolutions IN
an elaborate and remarkable speech. In the course
of his discussion he declared that he was ready
without shame remOrse 10 av0w that he went into
the committee with very different opinion from
that which he at present entertained; Tor MS views
of the subject were most materially different when
he voted against the resolutions brought forward IN
1911, by Mr. iIorner, as chairman OF th" Bullion
Committee. Having gone INTO the inquiry delcT-
mined To dismiss all former impressions that
he might have received. and TO abolish
from his memory the vote which he had gwen
some years SINCE when the same question was dis
cussed he had resolved TO apply 30 1t bis lndlvld-
nal and uupreiudiced attention, aud adopt every
Inference that authentic information or mature l
reflection should offer TO his mind; and he had no
hesitation in stating that he now with very litte
modification. concuued IN the principles laid down
i'm tho first fourteen resolutions submitted 10 the
House by that very able and much-Ialnented In
thus. even Horner's most vigorous and nfuen-
v,
mngated in 1911. had been correct. At length,
after six wears of cropping IN byways and iungle~,
Parliament began Ia see that the road pointed out
by the Bullion Committee was. after all, the Only
road out into light and prosperity.
THE RESUMPTION OF SPECIE PAYMENTS.
The resolutions now reported were the first
measures taken that indicated conviction of the
necessity Of making provision for resumption at a
period definitely fixed They declared first of all
that it was expedieut to fix time for the resump.
ton of cash payments for notes and then proceeded
20 designate the means by whicr9tbe desired object
should be accomplished. The most important of
those provisions were, that the Bank should ba
Obliged to give in exchange for its notes gold ne
saved and stamped in quantities of not less than
sixty ounces. at tho rate Of Sis per ounce that
from October |, of the same year, 1t should pay
gold in the Same manner ut the rate of 79s Cd. per
ounce; that after May l. 1921, the rate should be
77s Cd. per ounce and that from the first of May
1923. the bank should pay It's notes ON demand m
the legal coin OF the realm.
Here then, was financial programme to extend
over period Ol seven years winch the people could
definitely understand. II PROVIDED lor me con-
traction of the currency but at the same time as
provisions were free from all vagueness that the
con iidence of the community was restored, anu a.
for this reason, the banks gave cut their notes The
more readily, money was more abundant IN the
hands of the people than 1t had been before. 30
successful were the measures that The bank was anle
10 antlclp;Ut lnt tllu' pi"'.N' ~
Two fuli years. On the first day OF MAY. 1921,
therefore, II commenced giving out cash ioi itS notes
in whatever amount they were presented.
In must not be supposed. however, that the years
which preceded resumption were years of placid
prosperity On the cOntrarytt is surprising IN what
accuracy our own recent history was anticipated
in all ITS general characteristics. AZ the beginning
of the year 1919 the fall OF prices had been greatly
accelerated 10y excessive imporiations: The number
of failures consequently, between February and
July. was double the number IN ordinary years.
The glut in tho market of commodities stopped
many of the mills and everywhere clOgged the
wheels of trade. Many operatives were thrown out
of employment others were employed for half
time, or on haf-pay. Wages. in. consequence
fell though the prices Of provisions remained
nearly the same. Wheat which waSwOTth ~ 80 a
bushel in February was worth no less than - - IN
August after the new harvest was gathered. A. we
raised under the influence OF an irredeemable cur
rency so now we see that they were the first to de-
cline when confidence was on the point of being