Evening star. [volume] (Washington, D.C.) 1854-1972, 1924-02-03
Early American Financing
BY FREDERIC J. HASKIN.

(. \ distinct note OF hope in the
| European situation may be heard by
a comparison of the involved cur
rency and credit problems of Ger
many. France and other countries
| with the similar situation which ex-
, listed in the United States at the hour
| CO this country's birth. The United
states today enjoys the most stable
/ currency and credit system in the
world Everywhere the dollar is
looked upon as the soundest Of
money. AT the dawn OF our govern
| ment, following the revolution, ours
| was the worst money in the world.
That such transition could take
place gives reason to hope that the
degraded currencies of Europe may
be brought to d high standard of
value once more
At the end of the revolution the
| manages of the several states were
! in woefully bad shape. Several kinds
! OF currency We're in circulation, a
! sun: OF S20b.00o.000 in the aggregate.
! Even the bonds of the States were
at Il sharp discount: some were re-
garded as utterly valueless
With that situation facing them.
the people of the newly emerged ma
| ton felt that they must get to work
and build an edifice of credit which
would insure the continuation Of a
new confederation. All experienced
people know that 1t is difficult task
| to get any sort of agreement through
sometimes years, to get bill through
our present Congress, even though
the machinery of legislation Is in a
higher state Of perfection than 1t
was at the beginning. But the situa-
ton was so serious that the leaders
knew that temporizing would be fatal
and that something definite had to be
accomplished.
1t makes an interesting comparison
to refer to the old records and find
there the same sort of expressions as
now may be heard concerning the
European countries. The same sort
of dismal predictions Of ruin, rebel
lion. disinteSration and even anarchy
were heard then as now. Yet out of
| this disorder rose what today stands
| as the strongest government in the
i world.
Commentators declare that the
early Americans were scared into CO.
operation and constructive effort. The
situation was so grave that they real
lied that they must compromise and
work together or that the dire pre-
! dictions of anarchy and disintegra-
! tion would. indeed, come true.
~
The result was the Constitution of
| the United States. This Constitution
+; has been called the greatest docu-
! ment for the government of men ever
| written. 1t was the product of ne
cessity. Such serious alternatives
faced the new nation that the high
est type of constructive effort was
| called forth. There was no time for
! long drawn-out pickering. The re-
suit was the document which still
| forms the basic law of the land, the
| law on which has been built the solid
! edifice of American welfare, prosper
! ity and credit.
! The parallel is striking. 1t is
scarcely to be expected that European
states will write new constitutions,
/ but they find themselves at the low
est ebb of their finances and credit,
| just as our own states did. Will ne
cessity spur them to a settlement as
| it did with the trainers of the Ameri-
1 con government?
| Alexander Hamilton was the finan-
! cial genius who, with the Constitu-
| ton as a basis, set to work to build
! up the public credit. In message to
| Congress in 1890 he declared that if
| the good name of the United States
| was to be preserved the credit of the
United States must be put on q solid
basis. This policy dictated his course.
| The task seemed impossible, as
does the European task today. The
new federal government assumed the
| debts of the states, a policy which
| was regarded by many as suicidal. 1t
! did not attempt to repudfate foreign
/ obligations, but set out to pay up.
| In 1870, the foreign debt was &c.
| 100000, a very great sum for those
| days.
| Hamilton's first step was the pay
ment of this debt. Only 100000
| wear was set aside out of govern
| ment revenues to pay the operating
| cost of the government. This may
be compared with $4,000,000,000, the
sum used to run the government in
these days. The rest Of the revenues
were turned over to the foreign