Year: 1878

1t is seldom that the important truths Of
economic finance are put in.ea sucn CONDENSED
and comprehensive shape as in 'ne Ioiio"ins
article in the New York Sun of Sstnruay.
There is nothing new in the facts. L. 1'ey are
well-known and often repeated, and yet sc" "s-
how they fail to reach the understanding and
to convince the reason of some apparently in
telligent men. The whole article Is worth
keeping and circulating as a tract for the times;
1t is as follows:


A favorite argument Of the advocates of an
unlimited paper currency Is this: The first
issue of greenbacks was followed by great ac-
tivity in business, plenty of employment for
labor. and general prosperity; whereas par
tial withdrawal of these same greenbacks pre-
paratory to resumption, has been followed by
stagnation in business, dearth Of employment
for labor, and general misery; therefore, let us
issue more greenbacks and we shall once more
have active business, plenty of employment
and general prosperity.


This reasoning is very much as II man
should say: Last winter, when the thermome-
ter stood at 400, everybody was cool and CON-
Portable, and the fur dealers and the overcoat
makers did q thriving business; whereas now
the thermometer stands at 800 or 900 and every
body is warm and perspiring, and nothing Is
doing except in the sale of linen coats, fans.
and Ice cream; therefore, let US put lump of
ice on the bulb of the thermometer and bring
it down to 400 again, and then we shall have
winter weather, with all that the name implies.


The flood Of paper money that was poured
out on this country during the war had It's
source, in the first instance, in the necessities
Of the war, and was accompanied BY an ex-
traordinary activity in the manufacture OF
arms, ammunition, clothing and ships, and
by an enormous consumption of food. At the
same time over a million of men were with
drawn from productive industry and became
consumers of the fruits OF the industry OF
others. Europe was drawn on for supplies,
and furnished them to US in the most liberal
manner--of course, for q consideration. Every
body was busy, and everybody seemed to be
making money. This same money, too, every
body was afraid to keep after he got ii, because
every day it was getting worth less and less,
and many people expected 1t would eventually
become worth nothing at all. So everybody
hsstened to turn 1t, as fast as he got il, into
property Prices went up and up, and it looked
as though they would go on up forever. Cot
ton sold for 81 pound, cotton cloth for 25
cents yard, wheat for $50 q bushel, days
unskilled labor for $3.50, a days skilled labor
from $4 to $5, and SO on. just as the war
ended, too, railroad building mania set In.
Thousands of miles of railroad were built,
which to-day hardly pay running expenses.
Land along these railroads was bought on
credit at from $40 to SIS per acre, and houses
were built on 1t at three times the price for
which they could be built now. City lots also
went up to enormous figures, and made their
owners 1eel rlcn. linen, wnen the oupoie was
at Its biggest, it burst. There was rush 10
sell, Just as there had been previously rush to
buy. We found that we had more mills and
manufactures aud railroads than we had use
for, and that prairie land and city lots were not
worth anything like the prices they had been
selling at. Cotton and cotton goods and all
other manufactures tumbled two-thirds or three
gu arters in price, and those who had bought
them on credit or with borrowed money were
ruined Now, because the crash was pre-
ceded by contraction of the currency, un-
thinking men jump to the conclusion that We
have only got to bring back imitation to bring
back with 1t the wild era Of speculation, which
we had when we had initiation before. But I'M
less we can also have another war, or another
railroad building mania, their expectations are
fallacious.


from the hard times, and who honestly believe
that an additional issue of greenbacks would
relieve them, for wanting more greenbacks.
If we thought as they do We should want
more greenbaeks, too. II We were convinced
that even one-tenth of the misery of the unem-
ployed poor could be put to an end by issuing
q few hundreds of millions of dollars of paper
money, we should say: issue them by all
means. But we are sure that such q measure
would only tend to prolong and intensity the
present distress, and We therefore oppose it.