The record-union., 1895-08-17
The Financial Problem.

The Financial Problem.
The cause of the hard times is the
scarcity of money and want of conf
dence In the Democratic administration
or party. In regard to the latter, 1t was
simply a panic. 1t was expected the
party would place in this United States
market cheaper raw material and cheaper
manufactures, and no merchant would
buy those goods at high price to be un-
| dersold by those who might buy cheaper
under a low tariff. That disposes of the
| latter part of this cause Of hard times for
| this writing.
The real cause of financial distress,
however, was the clogging of our bank
| ing institutions. 1t is well-known fact
that when there is scarcity of money,
whether it be widespread or over only a
| district or State, that banks can remedy
the matter by issuing more. 1t is the
case of the proposition made by the
| Democratic party to establish State
! banks; but their proposal was to revive
wildcat banks, where the cure is worse
than the disease. The fact is. that party
saw the difficulty, but had not the skill
TO prevent 1t.
There were in the country a very large
number and amount of United States
bonds. They were not issued to form
the basis of the banking business. The
Government had been strained in every
brace and spoke to put down rebellion
of the braveSt men that ever united to
carry out conceived purpose. Compre-
! hensively stated, the time had arrived
when the awful crisis was upon us as to
whether the Nation should be all slaves
| or all free
| I will not discuss this point further,
than to say that the United States Gov
ernment have not three billions of dol
lars In Its treasury, and could not, there
fore. pay cash for arms, ammunition and
clothing, to say nothing of ships and the
pay of soldiers wages
The Government went in debt for these
in two ways: One by issuing currency
and paying this for material and soldiers
pay, and the other by issuing bonds.
which were simply promise to pay.
| In due time IL was discovered that these
bonds would constitute good security for
money to be issued by national banks,
while gold was deposited for redemption
of greenbscks They were readily bought
for this purpose, and their use here
| largely enhanced their selling price, but
| the greenb backs passed only for their face
value. Stated in other words, the credit
| of the United States was too good. The
| holders of these bonds raised and raised
their selling price till bankers could not
use them profitably in their business.
l will not say that the continued redemp-
| ton of bonds did not suggest the idea
that some time they would all be paid, and
| that then some other security must be
| provided. But that crisis was not upon
us then. If the Republican party ever
faltered it was then. The proudest bull
| letin that was then regular monthly
issue, was the amount of the war debt
that was monthly paid. How proud that
party was 10 not only assert, but to eX-
! hibit. that soon the war debt would be a
thing of the past
But they did not see that we would
then be face TO face with the hardest
problem of financial arithmetic. No
| question in the history of the Nation was
ever asked that awOke so much appre-
hension as that of how to get up cur
rency that would be sound over all the
| land and not be in turn an instrument OF
oppression. For term after term of
| Presidential administration, United
States banks were pitted against solid
coin in the canvass for votes. and SUBJ
treasury and wildcat banks came to th 9
front in the execution OF that party's
hard money promises.
The Democratic party, anticipating this
rising monster monster to theml, de-
| cried our money system and put forth in
their national platform how 1t would,
! Jackson-like, throttle the monster if he
should come in tangible shape within
y
arisen. and the Republican party would
not cure cholera till a patient had the
disease. But, really, remedy should
have been preprovided, for people are
afraid Of financial epidemics as we'll as
of epidemic diseases, and nearly as mucn
afraid of one as of the other. When ma
tional banks began to hold back every
! body thoughta storm cloud visible, even
if then no larger than mans hand, aud
I that the sails must be reefed.
The Democratic party would abolish
| national banks, because they saw that the
payment of all the bonds would obliter-
ate the security, and further, that bonds
| were so costly that they could not be
used in banking. Meantime the Repub-
sustaining the circulation OF a money that
would be good in every county in the
| United States.
They did. however, employ their power
| and talent in rehabilitating silver, by
call of worlds monetary conference,
which was not believed wise enough or
strong enough to carry out the purpose
for which it was called. This resort to a
doubtful method weakened the faith of
| the people in the future substitute of a
medium of exchange. In short, no su b.
stitute was proposed by the Republican
party, and none has yet been adopted. If
| that could be done to-day the Populist
|
patton, and the shinplaster party would
say that their plan was rotten-timb ber
structure.
John Sherman did propose remedy,
but it was not blaZoned before the coun-
try with half the vim that was required
to give it force with the people. He said,
Permit the banks 10 issue paper to the
full face value of the bonds," and this
would have added $40 for every SI00 in
circulation. OF course, this might have
had the effect to raise still higher the SELL
ing price Of the bonds, but it would have
enabled the banks to go on much longer
than was possible without such permit.
When the daily reports from the con-
ference showed that the value of silver
dollar was not likely TO be fixed by inter
national agreement Senator John Sher-
mSn said there was but one remedy at
hand, and that was to increase the weight
OF the silver in dollar.
l submit that this was the best ned y
ever offered. In fact, | know of but one
other. and that would have been the ap-
piication of the resumption principle to
the circulation OF silver in the same way
that il was applied to the circulation oi
the greenback.
The heart of resumption was simply
the fact that 100. 00G of gold was
placed in the Treasury. with which the
greenback could be redeemed if anyone
got afraid OF greenbacks.
There is surely no such substantial way
of resuming silver payments as to give
such security as will make silver equal
to gold. But this should not be done
wholly by depositing gold redemption
money. 1t would require twice as much
gold TO be deposited for silver redemption
as it did to insure redemption of green
backs. But the value of the two should
be made to approximate till the two touch
each other. The more gold that is placed
Tor silver redemption. the less gold there
will be left in circulation. Therefore the
plan OF Senator Sherman should be