Year: 1866

The Circulating Medium-Paper Money ant
Specie Paymonts.


Mr.. McCulloch, in recent spread eagle letter
on the public finances, to which we have al
ready called attention, remarked that our pres
ent prosperity was rather apparent than real
and intimated that nothing but a resumption OF
specie payments could rescue the country from
its present troubles and 80 avert the calamities
which threaten it in consequence of the almighty
hope Of redemption in gold. He seemed in
that letter, as indeed he also did in his previ-
ously delivered financial stump speeches, to
consider the United States in deplorable
condition, and sorely in need Of the
benefit Of some of that mature expert
banker, from observing the beginning, the
climax and the end Of the career of a few of
those "wild cat" banks which are, an
fortunately for the West SO intimately asso-
ciated with its history.


It seems to us that Mr.. McCulloch under
rates the credit of the United States govern
ment as 1t stands in the estimation of the
people, and that as he sits in the Treasury
chair he imagines himself the manager of a
new bank differing from the other only in the
fact Of its having larger circulation With
the memory of the panics, such as they were,
of 1887 and 1867 fresh in his mind, he looks
upon period of suspension as indicating an
unsound state of affairs nationally, financially
and commercially, and thinks his chief aim
ought to be to accomplish what he did in
Indiana. He looks with Shakspere upon
paper money, even when issued by the United
States, as trash, and clamors for specie pay
ments, as If he thought that should be the
ultima thule of our national efforts


In view, therefore, of this peculiar condition
of mind on the part of Mr.. McCulloch, which
we may politely term specie mania, we advise
him to visit the commercial and manufacturing
how fast the country is drifting to ruin and
how fictitious all our prosperity is. Although
we have about twelve hundred millions of
currency in circulation, including two hun
dred and ninety millions of national bank
notes, and at the same time only about six mil



the banks Of this city, and nearly the whole of
that lent out, he will find that our prosperity
was never greater and that public confidence
in "greenbacks" is all that could be desired.
Why, then, should he volunteer his services as
the advocate of the national banking and the
fundholding interest by saying, in fact, we
must transmute this filthy lucre-these dirty
rags-into gold or we are lost in sea OF bank


uptcy? There is nothing that the fundholders
and national banks would like better
than restoration of specie payments.
1t would appreciate their securities one
third in value, say to the extent Of
eight hundred millions; but it would at the
same time depreciate the property Of the
people at large in an equal ratio, say to the ex-
tent of five thousand millions Of dollars. The
national banks would in particular be bene-
flied, as the stocks which they have deposited
as basis of circulation with the Treasury
Department would be appreciated simulta-
neously with their notes, which are in q great
degree under their own control It is fortu-
nate that the fundholders and national banks
do not possess the influence which the holders
of the national debt did in Great Britain fifty
years ago, or we might have occasion to
fear equally disastrous results therefrom.
The history of England, from the ter
mination of the Napoleonic wars in 1915
to 1880, is one long chronicle Of the sacri-
fees of the many for the benefit Of the few; and
when specie payments were resumed by act Of
Parliament, In 1921, there was q chuckle.of
triumph among the fundholders heard amid
the sighs and groans which ascended from the
vast multitude Of non-fundholders who were
prostrated by the shock.


II is this delightful carnival, apparently
which Mr.. McCulloch wishes US to enjoy. Bu
we can hardly believe that he understands bis
subject when he advocates speedy return tt
specie payments. He has probably never read
the financial history of England, but he viii
find abundant references to it In Alison's Hi
tory OF Europe and every contemporary hi+
tory We mention that Of England becaua
it Is the only one which presents to US n
example of the gradual appreciation Of q pap,r
currency from discount as heavy at one tine
as forty per cent to par. France repudiaud
her assignats and afterwards her nsdxdds.
The old Continental States had no fiscal
system worthy Of the name, and allowed
their paper money to become worthless. So
did the Confederate States. We were exposed
to the same dangers, but our resources we're
greater and we conquered. We shall therefore
have to restore specie payments by an aipre-
ciatlon and not reputation of the currncy;
and If we are to escape the disasters vhich
fell to the lot of England, Ireland and Scotland
in the ordeal we shall have to exercis the
greatest caution, and our financial minister's
will have to abate that ardent desire foIgold
which Mr.. McCulloch never wearies of ehibit- |
ing. We are prosperous, and why then hmor
for an undue return TO specie payments Let