Year: 1874




G. Stout, of Oakland county, in
this State, was published in the
Detroit Free Press recently:


In this day of financial empiri-
cism in high places, it may be deem
ed presumption in one belonging to
the rank and file to attempt any
solution of the currency problem
which now occupies so much of
public attention. But the fact, pat
ent to all who read the signs of
the times, that imitation, with all its
attendent mifortunes, bids fair to
be the policy of Congress, calls for
the earnest protest of every one
who seeks the real prosperity of the
country.


The Committee on Ways and
Means in the Lower House of Con-
gress have reported bill limiting
the issue of greenbacks to $780,
00,00O, so we may conclude that
the legal tender reserve will all be
issued. Wall street responds to the
speculative prospect, and New
York Central, Pacific Mail, st.
Paul and Northwestern shares al
ready lead the prices of September,
before the panic, while Harlem,
New Jersey, Central and express
stock follow closely in their wake.
Money is drug in New York, and
millions can be borrowed on call at
from four to five per cent. interest.
The spring of 1874 is destined to
see the price of stocks higher than
in 1873, the tide of trade, which
for the first half of the fiscal year
of 1874, was in favor of the Unit
ed States, turned against us-mill-
ions of dollars worth of foreign
goods imported to fill the void made
by the last six months healthy
economy, while gold, 500 bonds
and railway shares must go abroad
to pay our trade balances, adding
so much more to our already fright
full foreign debt, and putting of
the return to specie payment.


Many have thought the recent
panic not all a misfortune, but q
blessing in disguise, which would
yet lead the country back to cor.
rect financial basis. But such have
evidently been mistaken. We are
doomed to Hre history before we
can profit by its lessons. 1t is ol
no account to our Congressional
Solons that England floundered fol
ten years in the mire of financia
ignorance, and found no dry lant
till three panics had in turn bank
rupted half the kingdom. Eng
land attained specie resumption on
ly under the severe discipline Of
currency contraction. The United
States have never known such Q
panic as swept over England in De.
cember, 1925, when every English
mans pocket was georged will
bank notes.


1t is not my purpose to argue
the necessity of the ultimate return
to specie payments. 1t is enough to
know that under the restriction OF
the amount of legal tender notes to
$366, 100000 tie natural expansion
of the country aoas fast solcing the
currency problem. Already the
difference between gold and green
backs was diminishing and trade
rapidly turning in our favor, when
the panic, which had no cause but
the collapse of railway expansion,
frightened the country out OF its
senses and produced distrust in ev-
cry department of trade. This con-
dition of things set the financial
doctors to work to make a dag
nosis of the case. Mistaking the
inability TO get credit as indicating
necessarily a scarcity of currency,
they prescribed the issue of the
S44, ,000,0 900 of the legal tender re-
serve, and under the influence of
this sovereign panacia they promise
the patients rapid recovery. But
while all are agreed that the gov
ernment must ultimately resume
specie payments, there exists a
strong diversity of opinion as to
the means to that end. Some seem
to think that the way to "resume is
to resume )" others, that Congress
ional legislation can directly attain
the result; as if it were possible to
change the laws of finance by mere
statutes. An act of Congress de-
claring legal tender note equal in
value to gold of like denomination
would not make it such. There
can be no resumption of specie pay
ments without contraction of the
currency. The initiation which an
act of Congress authorizing the in
crease of legal tenders to 100000
600 would inaugurate will put off
resumption ten years, If the explo-
sion of the currency bubble does
not sooner solve the problem. Con-
gress may indeed direct the Secre-
tary of the Treasury to redeem
greenbacks on presentation, but
without q gradual contraction,
which shall bring all prices to the
level of gold, such policy would
not empty the treasury of coin in
ninety days. Congress may, by wise
legislation, open the way to resump-
ton, but cannot inaugurate it by
mere statute.


The financial condition of oui
country finds an exact parallel in