Owingsville outlook. [volume] (Owingsville, Ky.) 1879-192?, 1899-06-15
THURSDAY, JUNEI5, 1929.
KNOB LiCk'S" Errors.

Our Knob Lick correspondent is
a valiant warrior in the Populist
cause, returning heroically to the
charge again and again, and. as
has been said of the British soldier.
never knowing when he is defeated.
Such devotion Is worthy of better
cause than that of fiat currency.
which al, experience and all reason
condemn.
In his article in last weeks issue
be attempts TO show that President
Lincoln made a master stroke of
fnanciering in issuing the 500, 000,-
600 in demand notes, that were
ideal fat currency, but let the
money power dissuade him from
making any more Of the same kind,
and SO changed the quality of sub
se9uent Issues of paper currency as
to bring on the ills Of a deprecated
currency.
knob Lick" is mistaken. Pres
ident Lincoln was not the financier
of his administration. Secretary
Of the Treasury Salmon p. Chase
was that man. Financial historians
concede Row that Chase blundered
in the beginning and continued
laundering. Chsse's first disas-
trous mistake was this: In August,
1861, under act of Congress OF July
18th, 1851, be negotiated with Eas-
tern bankers three loans of $780,
100000 each. In an impulse of
wrong headed generosity, he drew
the $50, DOC, 900 from the banks in
actual gold and, at great expense,
sent it over the country to pay, as
he said, the public creditors in
better money than they were willing
TO accept. The bankers foresaw
dhe inevitable result of such a
course in scattering the gold basis
OF bank credit, and begged and
pleaded with Chase, bringing all
their pressure to bear on him, to
draw checks for the money and let
the checks take their usual course
through the New York Clearing
House. But Chase was obstinate.
The gold being scattered the banks
were compelled to suspend specie
payments on December 2Sth, 1861,
20 not resume them for many years
sgain.
Financial historians and others
contend now that there was no
good reason under good manage
ment why specie payments should
not have been maintained through
out the war. and the immense losses
caused by q deprecated currency
avoided. A little less wilfulness
and a greater amensbility to the
accumulated financial wisdom of
the practical financiers of the East
on the part of Secretary Chase; a
good deal lees regard for supposed
political expediency on the part of
the Republican leaders of Congress !;
a firm, unyielding support to the
Constitution and an inviolable re
gard for the nations integrity on
the part of all responsible ones of
the administration and of Congress,
would have prevented many of the
financial ills Of the war and could
have maintained specie payments.
For, despite the contention of the
advocates Of "cheap" money, gold
dses not desert in every crisis.
When the United States embarked
in the war of 1919 the nation was
very poor both in actual money and
resources. Great Britain was the
richest and most powerful nation
I'm the world. While successful gen
orally on the sea the United States
made generally a sorry showing in
the warfare en- land, the battle of
New Orleans being fought after the
treaty Of peace. Our banking and
currency systems were rather crude.
Yet specie payments were main
tanned in New England throughout
the war and suspended in the bal
ance Of the country only toward
the close of the war. Crises of
various sorts have since confronted
the nation, but only during and af-
ter the Civil war-from 1862 to
ls79-were specie payments gen.
orally suspended.
In the great Cromwellian war
neither gold nor silver deserted
England. nor did they desert France
during the terrible wars of Napo-
leon Bonaparte. But foolish or even
faulty financIering can readily drive
q old and silver from circulation
and create crises, like the Rcpubli-