The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1920-12-18
By 3. q. JOHNSON

| 1t was fifteen years after the Civil
war before specie resumption. But it
was much longer before the economic
! effects of the war were over and pusi-
| ness was restored, to norma! condi-
tions. AS far as the government was
/ concerned, its credit was fully restored
On or before Jan 1. 1879, the date of
/ the resumption-this despite the four
billion dollar debt as the inheritance
| of the war period
But the restoration of the public
| credit by the government as such,
| necessary as 1t was, did not begin to
solve the troubles of business, Oh OF
| the people generally throughout the
| United States. The panic of 1873 was
already in full sweep throughout the
country; and in fact, the process of
| specie resumption already had most
| disastrous effect upon a great body OF
our citizens: for as the credit of the
country improved and as the announc-
| ed period for resumption approached,
all values and prices, as stated in
terms of deprecated dollars, were
steadily reduced. while all outstanding
obligations were payable in dearer dol
| lars from year to year. Thus the
IoCDtol SidSS "cIc tiIS luSNltdUiS VIZ
tins of the policy of resumption, while
| the creditor class were the beneficl-
aries of it.
| One of the natural results of this re-
action was the bankruptcy of tens of
| thousands of farmers and business
men, VINO saw their property shrink in
value until their equity or margin was
entirely wiped out, and often the mort
! gagged property was bid in by the cred
! itor at less than the face of the claim
leaving judgment hanging over the
debtor after exhausting his entire hold
| ings. Thousands of these victims of
strenuous financial policy were driven
! to Kansas, Arkansas and other new
sections of the country, to begin the
| struggle of life anew under pioneer
conditions, and many others who were
not financially able to follow Greeley's
advice and go west and grow up with
i the country" remained to sink into
inevitable poverty and hopeless dis
J tress. or course, the forcing on the
already tight money market of all this
land of bankrupt debtors had the
effect of still further depreciating land
values below normal, which. owing to
the further depreciation caused by the
panic of 1898, deferred normal prices
and conditions until about the begin
/ ming OF the new century, 1900.
History Repeats Itself.
We are now, twenty or more years
later, threatened with a recurrence of
that unfortunate and unhappy expert
ence. True, we have not in this coun-
try, the former currency depreciation,
thanks to the Reserve Act and other
favorable circumstances incident to
the World war. But, on the other
hand, when we consider the magni-
| tude of that conflict the unprecedent-
| ed and incOnceivable cost and waste
of it, and the almost bankrupt condi-
ton of the civilized governments of
the Eastern hemisphere: and when
we contrast the four billion indebted
ness of the Civil war with the "a bill
lions of our present World-war cost,
and consider in this connection the
tremendous expansion of our own cur
rency though kept at par with gold,
we must admit that the road back to
solvency, and sane and normal condi-
tons will be long and rocky one
one that will put not only our own but
the governments and peoples of the
civilized world to an acid test of the
fundamentals of honesty, courage, pa
! tience, craftsmanship and prac teal
ability and fertility of resource in all
directions.
Our Increased Resources.
On the other hand, we must not for
get our greatly increased wealth and
resources over those at the close of
the Civil war, and our increased abil-
ity to pay national as well as indi-
vidual obligations. The additional pro
lection of the Federal Reserve Act
has been tremendous factor of sta
bility in our present financial condi
ton. The vast increase in direct tax
paying power through the passage of
the income tax law and it's approval
by the supreme court also was a
source of great financial strength to
the government in the present war, as
compared to the conditions at the
close of the Civil war: so, as far as
the matter of the government debt
alone is concerned our condition is
far from discouraging.
Period of Readjustment.
When it comes to the private bust
ness of the country, that is another
story. just as it was after the Civil
war. While we are freed from the
drastic effects of the severe currency
contraction then resorted TO in order
to accomplish specie resumption, there
is bound to be a great reaction in all
prices and wages. This slump has al
ready begun, and the causes are ap