Year: 1867

McCulloch and his monetary policy.


We repeat that for no other purpose


than to pay off an inflated currency


debt, and thus save its conversion into


gold obligations, should an irredeema-


bic currency be tolerated, A currency


of 900 millions cannot be reduced TO


300 millions in one or two or three


years without making all the sinews Of


trade crack. II connected with the


policy of paying the currency debt in


its own coin, plan, which would have


contemplated specie payment in ten or


fifteen years, would have been rapid


enough. Without that it cannot be


done in the time Mr.. McCulloch has


before thought, and we observe that


he has now grown more indefinite as


to the period. But the process should


always be going on. By converting the


compound notes Mr.. McCulloch has


made a contraction of more than 100


millions during the last year. The


contraction of four millions of legal


tenders a month is moderate enough


on a volume of 700 millions of curren-


cy. That is not what has made the


great change in the state of trade. IL


has done a little; the contraction of


the greenbacks more the Secretary's


rod of terror held over the money mar


ket more; there Is q general depression


of trade here and in Europe, coming


from over manufacture and over trad


ing; and there has been a ruinous de-


cline in cotton from other than money


causes, which has effected all the vast


trade into which that material enters.


By the evil of an inhsted, irredeema-


BILE currency we are now importing


from 100 to $50 millions (gold Vsluel of


foreign goods year in excess of what


our whole exports, including near so


millions of gold, pay for. This bal


ance is paid in gold bonds at 20 cents,


which are to be drain upon the coun-


try forever. Under the initiation pri-


ces by this paper money, manufactur-
| ing production at home is unable to


compete with foreign goods, even with


the high tariff. ALI the Treasury ope-


ratlons to depreciate gold and foreign


exchange in our deprecated paper,


have only worked to stimulate this


over-importation and Impeachment.


Mr.. MCCULLOUGH is apt to lay down


sound monetary principles, and then


to upset them in the application. lie
gives the failure Of the crops as a reas-


on why specie payment can not be re-


sumed as early as he at first thought


Good crops are good thing in the


monetary situation, but the only way


they can affect the return TO specie is


by creating a balance of the foreign


trade in our favor, so as to turn the


current of gold this way. or to hold on


to our gold product; and while this
country has 700 millions of paper mon
ey, or half that, it will not have bal
ance of trade in its favor, even if its
crops should be doubled. When we
can export $50 millions (currency val


ue) as we did in 1866, we need not have


balance of trade against the country


on account of short crops, and weshould
not but for the paper money initiation
at home, and the provision of cheap
bonds instead Of gold to pay the for


eign balance.


Mr.. McCulloch has one idea which is
grave error. He says: Legitimate


business has not suffered by the cur
tailment which has taken place within
the last two years." How can legiti-
mate business help but suffer from a
great fall of prices? 1t piles up the
obligations of the debtor by reducing
his means. 1t wipes out the margin of
capital, which. under steady conditions
is considered sufficient for safe trade,
apd leaves the trader bankrupt. Is
Mr.. McCulloch going to introduce the
sentiment which Old Hickory threw
out TO plaster the wounds of the vic
Tins of his currency tinkering, namely, |
that trading on credit is not legitimate |
business, and that they who trade on |
borrowed capital ought to break? He
has a vicious idea that there is a busi- |
ness which he calls speculation, which |
is illegitimate, and which he can break |
down by tinkering values and making |
panics, through his power over the
money market, without trusting what
he calls legitimate trade. But if there
were such distinction, which there is
not, he could not hurt one without in
ju-ing all. How can he destroy the
value of speculative investments with
out destroying the so-calle6 legitimate
in the same? His opera
tions on the New York money market,
which he thinks effects only stock
spectators, disturb money matters
throughout the country, and paralyze
regular trade, while they do not IN the
least reduce the opportunities for stock
or any other speculations.


Business of every kind has suffered
by the decline of prices during the last
two years, and by the uncertainty of
the future. As we have said, but part
of it has been from the contraction
and of that the greenback retirement
has been the smallest item. Mr.. Nc
Culloch's power over the money mar
ket has done much to parslyzs busi-
ness, and we must bear in mind the
revulsion of trade all over the world,
which is aside from any money move
ments, and which would in any event
be greater here on account of the ces-
sation of the extraordinary expendi-
lures of the war. Business must suffer
from a contraction Of the currency, and
i must continue close until the level
Of real money is reached. They who
talk of reaching a specie basis without
hurting trade, are the shalloWest char I
Iatans. The suffering of trade by con- !
traction is no more reason for stopping
It than the suffering from the knife Is
/ reason for stopping halfway in the
of a mortified leg. If we Z
have no object but the monetary one,
t would be peurile to stop this moder-
ate contraction of four millions month i
IN a volume of seven hundred millions.
We should only have the sufferings to
20 through again with aggraVations.- {
And from the various causes that We
lave alluded TO, the decline in prices {
has been greater than all the eontrac-
lien of the currency. We should chock
his for the reduction of values is too {
ievere . process to be let up and re-
oested, and very few of those who are i
iurt by the fall would get benefit by I
The rise.


Congress having unreseryedly in
iorsed McCulloch's financial plan two 9
ears ago, and given him plenary pow {
II, and all parties having exalted 1t, T
hey now have to stulify themselves t
~ overthrowing it after the greater b
part of that evil which was to be pre- o
Tented by continuing the expansion a
las been done. And it was not mani v
est during the last two years, nor is it {
-et that any body in Congress cared for o
ontinuing the expansion for the sake of u
,aying off the currency debt, to ssVeits v