The representative. [volume] (St. Paul, Minn.) 1893-1901, 1894-10-31
READ THIS.
The Downward Course From Pros
perfty to Bankruptcy.
From the Minneapolis Union.)

V rom the minneapolis Un1On.)
In the report of the secretary OF the
treasury. Hugh McCulloch, for 1866, to con-
gress, may be found the following:
THE country as whole, notwithstanding
the ravages of war and the draft upon Ia
Dor, is, by it's greatly developed resources,
far in advance of what it was in 1857. The
people are now comparatively free from
debt
There is an immense volume of paper
money in circulation"
1T is undoubtedly true that trade is car
ried on more largely for cash than ever
was the case previous to 1861, and that
there is much greater demand for money
than there would be if sales were made, as
heretofore, credit"
so far as individual indebtedness is re-
garded, it may be remarked that the peo-
pie of the United States are much less in
debt than in previous years."
Here we have admissions from high au-
thority that the people Of the United States
were practically out Of debt, and that they
were doing business on a cash basis.
Nearly every one knows that in 1862 1854
1865 and 1866 business of all kinds was pros
porous; that the farmer was prosperous;
that the mechanic was prosperous; in fact,
every one was prosperous, as one may see
from the number Of commercial failures
which were in 1863, 495; in 1864, $40, in 1865,
$50; and in 1866, 632.
What, then, has caused the change in the
countrys condition from prosperity in 1866
to misery and poverty in 1894?
The contraction of the currency has been
the cause and nothing else. Our money has
been contracted from 1925 per capita in
1865, to $2.35 per capita in 1893
cd
Of the treasury March Z, 1865, and in a
speech at FIT. Wayne, Ind, a few days later
said
I'VE have a circulating m dium altogeth-
err larger than is needed for legitimate bus
mess. If congress shall, early in the ap-
preaching session, authorize the funding Of
legal tendsr notes, and the work is carried
on resolutely, we shall probably reach spe-
Gle payments without serious embarrassment
to legitimate business
April 4, 1865, Mr.. McCulloch wrote to Henry
C. Carey: You will perceive by the state
ment of the condition of the treasury on the
list instant that the government circulation
has been diminished. Whether, or to what
extent this circulation will be reduced de-
ponds upon circumstances that cannot now
be clearly foreseen. 1 have been and am
still of the opinion that it must be cur
led"-Bolles Financial History.
In the report on the finances, for 1865,
Mr.. McCulloch said:
There is an immense volume of paper
money in circulation, which must be con-
tracted. The expansion has now reached
such a point as to absolutely oppressive
to a large portion of the people, while at
the same time it is diminishing labor, and
is becoming subversive Of good morals"
There is no fact more manifest, than
that the plethora Of money is undermining
the morals of the people, by encouraging
waste and extravaganza. The remedy, and
the only remedy within the control of con-
gress, is, in the opinion Of the secretary,
to be found in the reduction Of the cur
rency.
mand than formerly for money on the part
of manufacturers for the payment of OPP
eratives,' says the secretary; but, making
the most liberal allowance for the increased
wholesome demand arising from these
causes, and from the advance of the coun-
try in business and population, it is APP
parent that the circulating medium Of the
country is altogether excessive.
80 far individual indebtedness is re-
garded." continues Mr. McCulloch, lit may
be remarked that the people of the United
States are much less in debt than they
have been in previous years"
In this same report the secretary recon-
mended: That the secretary be author
iZed at his discretion, to sell bonds of
the United States, bearing interest at
rate not exceeding per cent Tor the pur-
pose of retiring not only the compound in
terest notes. but the United States notes."
and then added: In the opinion of the
secretary, the process of contraction can
not be injuriously rapid The first thing
to be done is to establish the policy of
contraction"
April u, 1866, congress passed law
thorizing the secretary of the treasury to
sell bonds and with the proceeds retire
treasury notes and other oblga tions-green-
backs.-H Statutes at Large, 81.