Year: 1867

L


of Congress are ample under the Const i'm


tion; and those powers will be exercised. so


ar as the public safety may demand, with the
1rmness worthy OF great people.


| The Currency and the Tariff.


We copy the following passages from an
elaborate letter addressed to Commissioner
| Wells, whose report on the revenue laws has
| just been laid before Congress, by Mr.. George
Walker The proposition which MIR. Walker
attempts to prove is, that the embaTAssments
which affect our manufacturing interests are
occasioned by deprecated currency, and
that the remedy is to be found in speedy re-
turn to specie payments:


Gold is actually demonetised in fact and in
idea, and has become merchandise. 1t is no
! longer money in fact, because it is used in so
| small a traction of our exchanges as to con-
| stitute no appreciable part OF the circulating
medium. BY the people it is used only to pay
customs and duties, AID by the government,
interest on the federal bonds, The great vol
ume OF home industry is operated wholly by
| paper, and both producer and consumer alike
| measure prices in the paper standard of the
country. Nor is gold any longer money even
in idea, because after 1t rose to 200 the people
| parted company with it, and prices have risen
and tallen with scarcely any reference to the
market price OF gold. When speak OF prices,
refer TO commodities, and not to the Shares
or securities dealt in on the stock exchange.
The importer OF foreign merchandise VINO
has to ouy in gold is the only party who looks
at the price OF gold, when he fixes the price
at which he can afford to sell his goods. If
we had been paying heavy balances abroad,
such divorce of business from the precious
metals could not have taken place, but
fortunately or unfortunately, the ex-
ports of the country in cotton and five
twenty bonds have enabled US generally to
to meet our vast impOrtations, and have caus-
ed exchange to rule in our favor.


Gold being thus driven out OF use as mon
ey, has become one OF the cheapest commod-
tiles in the market Ceasing to be currency,
it is subject to the ordinary laws OF supply
and demand, but the demand for it being
light, the price OF it has fallen to a point
much below the average OF other prices. If
an attempt were to be made tomorrow to re-
sumo specie payments, gold would quickly rise
to zOQ OF upwards, fer it would then resume
its dominant use as money, and the true re-
latiOn OF value between il and the conveu-
tional money of the United States would be at
once apparent. But until such resumption is
attempted, the volume OF direct exchanges be-
tween gold and paper is too inconsiderable to
afford any correct test OF the value of the
paper. ys5..


has ceased to be the measure of prices in this
country and is cheaper than most comnlodi-
ties, by reason OF the small demand for it, it
is next to be considered how prices have been
affected by the paper currency of the coun-
try. Before the war, the whole currency con-
sisted of bank notes; for gold, though held by
the banks as redemption fund, and used IN
settling balances at the clearing house, and In
dealings with the government, formed no part
OF the domestic circulation. The volume of
bank notes never exceeded 245 millions, and
if the West had enjoyed a redemption system
like that Of New England, it need never have
gone So high. Nor did the amount of cur
rency increase rapidly with the development
of business. The rapidity OF eommunica-
tion between distant sections, and the use of
the express and the telegraph, and the econo-
mizing influence OF bank accounts and OF the
clearing house, have gone lar to neutralize
the demands Of growing business for cir
culating medium. So remarkably has this
economy been realized in Great Britain ca
country of small extent, it is true, compared
with ours,) that it was recently claimed in the
House of Commons by Mr.. Hubbard, direct
or OF the Bank of England, that it requires no
more currency 10 do the business of that
country now, than it did twenty years ago,
when the business was only half as great
Yet in the face OF this economic law, and OF
our own experience, we have gone from q re-
deemable currency OF two hundred millions,
to an irredeemable currency OF more than
seven hundred. Make whatever allowance
you can Justify for shortened credits, increase
of cash transactions, stimulated industry and
the settlement OF new territories, aud COM
pare as closely as you can the relative produc-
ton OF the two periods, and you cannot re-
sist the conclusion that there is now more
than double the circulating medium which
would be required to do the same business Oh
specie basis, and this being conceded it ire
sistibly follows that prices, must have, from
that cause alone, risen to double their natural
standard.


The bearing of these facts on the industry
of the county is this. The Pittsburg iron-mas-
ter is paying double prices ior all that enters,
into the cost Of his production, and TO do a
living business, he must get double prices in
return. But at this point the foreigner steps
in and undersells him, because the cost ofpIo
ductiOn in Europe, with an unchanged cur
rencv, has not advanced, and after paying a
heavy duty, he can still afford to sell his mer-
chandise here at currency price considerably
below the cost OF the American article; be-
cause with the currency received, he can buy
gold, or bills OF exchange, at price much be-
low the average prices of those articles which
enter into the cost of American production
With this gold he repeats the process OF cheap
production flor it is the currency OF his couu-
try) and the unequal competition is renewed.


Ii have established the position that gold


Thus it is that the low price OF gold oper-
ates as bounty to the foreign manufacturer,
and while it occupies its present abnormal
position in this country, cheapened in price
because deprived of that function which gives
it its greatest value elsewhere, this bounty
must continue. The remedy usually suggest
ed is to advance the tariff, but this, though
perfectly justiiabie where the difference OF
| cost grows out OF the intrinsic advantage
| which the foreigner derives from cheaper cap
| ital aud labor, is most unstable and danger
GUS remedy where the evil is the consequence
Of vitlated currency. When thus used the
! tariff tends to aggravate and prolong state OF
things, from which to escape is the only safe
ty. Ii the people OF this country could be
made to see that the present expanded cur
rency is not q blessing but curse; that it is
one OF the most unequal and burdensome oi
taxes; that it gives undue value to capital as
compared with labor, thus pressing most
heavily on the working classes, tending TO
make the irich richer and the poor poorer; ;
that it stimulates speculation (which is
gambling under less offensive name) by
turning the most ambitious men from the oc-
cupatiOns OF production to those OF exchange,
| from me ehanics and farmers into brokers and
middlemen; that it drives men from the coun-
try into the cities, in the hope of sudden
wealth, and because it is thought more re-
spectacle to buy anu to sell than to labor with
the hands; that it subverts all true notions OF
value and produces such constant fluctuations
as to make honest industry insecure OF its re-
wards; if the people can be made to see all
these evils, aud will open their eyes to the
enervating, demoralizing consequences, they
will patiently and eheerully submit to the
temporary hardships which are involved in re-
ducing this redundant currency to its normal
proportion; they will by all their influence
strengthen the hands OF Congress and OF the
Secretary OF the Treasury, that the day may
be hastened when the country shall again
conduct its domestic and foreign dealings on
the basis OF the only currency which can rem
der trade secure--that OF the precious metals


The C0lOred Members Of the Massachu.
| tr +-r sets Legislature.