New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-02-24
NEw.yoRK DAILY TRIBUNE TUESDAY FEBRUARY "a 1890

: I i aDsTNIIPU
| forming any conclusion, even in my own mind. re-
| specing the causes of the present state of money
prices nor am / sure that have yet gained clear
and exact notion of that change, whether depreca-
ZION or not Of which the remains to be ascer-
| tanned" At a later period he wrote again " The
| several successive steps which have been observed
in every country that allowed its currency 10 fall
| into state Of depreciation are coming upon Us
faster than was to have been expected in this cou-
try and, as there will be no recovery after bank
| notes made a legal tender, the discussions
| which precede such measure are evidently of the
| last Importance"
The committee made up ofmen like Horner Aber-
| cromby. Barring and Thornton devoted themselves
| to an examination of the questions before them
| during the weeks which interviewed from February
to June. In August the report was ready. The long
expected speech of Iorner the subject before the
committee was listened to by the House of Com
mons with the profUundest attention, though Its
| length was such that in point it covers sixiy-two
| columns of Ilansard. The substance OF his recon-
mendations he embodied in sixteen resolutions,
| which he moved with desire OF impressing dis
tincty his views upon the House, though he had
little reason to hope that they could be carried.
The substance OF the resolutions may be stated as
follows The act winch suspended specie payment
ought to be repealed and the bank forced to redeem
| its notes as soon as due caution would permit. To
facilitate resumption the smaller notes first TO
| be withdrawn. IL thought that after two wears
no notes of less than Go should be allowed to crcu-
| late.
Thus it will be seen that resumption according TO
| tins scheme, TO be brought about by means of
gradual reduction Of the amount OF the currency.
The committee declared that II there was any other
way to resume than by first diminishing the amount
| OF currency 10 DC redeemed, tnty ndu Dten uLaDlc
| TO discover 1t.
| THE FISANCIAL DEBATE.
| The report at once threw a considerable number
of merchants and bankers into alarm. Great ex-
element prevailed. and, before the end of the dis
cussion, it became apparent that the recommends
tons of the committee could not be carried. In
iact the heads of the Commoners were completely
turned by the excitement of the public. Cobbet'-
Register. the great mouthpieco of the popular party
declared that the bank would never resume ; and in
vindcation of ms faith, Its proprietor placed the
picture of n gridIrOn at the head of its columns
which ne professed his Willingness TO be brOied
| whenever resumption should take place. At THIS
moment Mr. NansittHrt comes forward again INTO
nOuCe Three years before he had succeeded IN con-
vincing host OF people that by borrowing all they
wanted and putting out tenth OF the sum Dor
rowed az interest the portion at interest would
cumulate few years to pay off the rginal
debt lie now introduced the count rD1rt Of That
scheme, In the form of a resolution which
declared that, in the public estimation. bank
notes to be held equivalent TO the legal com
| Of the REALM" and 10 be " generally accepted as
such i'm all pccuniary transactions 10 which such
coin IS lawfully applicablc.' IL any discouraged
! economist ut the present moment IS disposed 60
search for comforting precedents of folly, viii
probably give hiu little satisfaction to find that
| lust after one of the abest financial exposIti0ns
! ever made. tie House OF Commons rove 10 Tie
SMILING folly of declaring that paper was the equiv
aleut OF gold, oven though gold in the market was
then worth premium OF - per cent. Verify there
! are few thing more singular than the sowness OF
! what bank note -, and 10 understand tnat IT'S
| value depends IN no way on what II Is, or even on
what II preterds 10 be. Perhaps the reason IS that
people have become accustomed to seeing 10 and
handling it die place OF money that they forget
| that it is after all merely a promise to pay, and
tlnt the current value OF promise 70 pay depends
SIMPLY on the public estimation of the disposition
! and the ability of the who promises. 10 Is per
hans forgotten that for this reason the value of n
| promise can never be determined absolutely by
the one VINO promises. If Mr. Vanderbilt were 10
| write on slip of paper, The Undersigned VIII de-
liyet 10 the bearer one locomotive, and subscribe
his name TO the statement Mir scott might perhaps
receive the note AT its facc-valne But If II were
found that thousand or ten Thousand decIaratiohs
of that kind had been issued. II Is to be presumed
that Mr.. Scott would much prefer the locomotives
10 the paper. In other words, the paper would be
taken hy railroad ~ value measured
bv the public faith i'm the ability and disposition Of
the corporation to honor IT. IL need scarcely be
SAID that no declarations even OF Mr.. Vanderbilt
a. 20 the equality or cUulNalcucy oil hs paper ana
his locomotives would apprccably affect their Tela
tive value Still less does Il need to be said that if
| @iarinT This is One Locomotlycn his friends
! would at once begin 10 look tor the best accommO-
dati0ns III ASYLUM for the insane. Ii may he re-
marked. however. In passing. that when such a
| paper ~ issued and taken. some other Things may
be expected which are not likely 10 occur We
shall only have ~ put decorated tnruip INTO our
rockets with the inscription, This Is IA Watch"
IN order 10 save both time and expense.
! Iansittarts resolution, then, making it's puny
effort 10 convince the world that paper equiv
aent" To gold, was carried, and Horners were De
feafrd II was not until after eight years of dis
i9at the Nation came to see what Homer had doue
hs best to show them III 1sll-that there was only
one way out OF the National troubles
THE FRUITS or FINANCIAL FOLLY
Bnt the course Of those years affords IN instrlc
tive lesson. Inc DEGREES of Napoleon and the ont |
break of the American war were destructive Of
commercial intercourse with other nations, and |
therefore while manufactured articles could find no
outlet, provisions could fud 100 inlet. The prices OF
labor therefore. were kept low. while the prices of
food became hQhcr than ever before. The condition
of the poor NAV be inferred from the fact that ~
time when the prices of labor remained substantially |
what they had been for some years before wheat !
had come to bo worth the cuorinons price OF us
quarter, or 80 - Il bush"l ~,
Then came the rage for speculation on the down |
fall of Napoleon IN ISL The European ports were |
thea opened and the most cXtrayaglnt profits, were
aniiclpatrd from the sale of British goods in CONT
mental markets. Money was ahuudant ami small |
CAPITALISTS well as large bought up whatever they
could lay hands on IN anticipation OF golueh re- |
! turns. Bnt # became apparent that the ue- |
| nand for rtisll manufactures nau Dech greatly |
! OvcTcstimatcd The fOWIgn markets were Hooded, |
and it was now found that goods must either |
be sold at loss or not sold at all hI. barring u-
! ClaTod the House of Commons that although |
exports had greatly increased, lie saw IA mat IN
more loss than gam. Broughaul, IN speech
delivered in 1916 de.cubmg the result, used these
| words: "Ihe bubble soon burst like It's predc, |
| cessors of the South sea the Mississippi and |
Buenos Ayrcs. English goods were selling for much |
! less IN Holland and the North OF Europe IMAM IN |
| London and Manc hester IN most places they were |
| iHnE u'1d WeEHt' " 'ih""' 'H! '"'' ~ 81 49,
! either no returns whatever were received or
| pounds came back for thousands that had gone |
forth" 4 German historian estimates that IN the |
| year 1918 alone Bn Ish goods 10 the amount III |
valne OF 10000, 900 HORNS we're sold III Germany
ut from 30 to 40 per cent of the cost Of production.
Bale. GEES. Il. Neu. Zcit. l., p. 116.
Thus prices were universally depressed ny the |
general glut Of oyer-prOductiou. Even agrcullulai
produce had been greatly. stimulated by the ehor-
nous prices of previous yenrs. and great SUI
| perabundance was the result. loOke, IN MS ms
| tory of Prices" has tcmperately but forcibly de-
scrIbed the condition OF the times. lie SAYS: lhcie
very general depression IN the price OF nearly
all productions and in the value of all hXed prop
erty entaIling n conveyance of losses ana alluieS
md Inl nnN