Year: 1875

Mir. Phillips is undoubtedly splendid declaimer; but logic does not seem to be his strong point. The question is not whe- ther irredeemable paper money has been used. to advantage in times of public emer- gencywhen other resources seemed exhaus- ted not whether it fought the battle of Waterloo or the battle of Gettysburg. The question is whether an emission of large quantities of irredeemable paper currency will promote extravagance and corruption. IT Mir. Phillips tries to evade that question by way of Waterloo, be must permit us to suspect that he cannot meet 1t squafely. If he will look into the suspension period in England, he will find that irredeemable paper money may indeed have fought the battle Uf Water loo, but that this fact did not prevent it from promoting extrayagance and corrup- ton at home, and unless he ignores what everybody else knows, he will surely not deny that this country tells the same sto- ry.n.He might also study the history of Russia with profit, Still less will he. be able to deny that extrayagance, profigacy and corruption, in an extraordinary degree will result from policy such asI discuss- ed it-the policy of spending money for the very sake of getting it out.

 A HUMOROUS RgFERENCE.

 Mir. Phillips uses one illustration which is intensely ludicrous-he refers me to Germany and France. Germany involved III business crisis, ard France in q con. dition of prosperity. And this from g gentleman advocating an expansion of the currency. Does Mir. Phillips know what the cause of the business collapse in Germany was Twill tell him. Certain ly not for the want of money, for after the French war an abundance of it hoated into the country. The causes of the col lapse were Over-productiOn, over-trading, over-speculation and oyer-straining of the credit system, which is always to be excit- ted by an over-abundance of money not the product of labor and industry, and the business striDgency is now prOtracted by sweeping change in the monetary system of the country. What can Mir. Phillips make out of this fact for his ar- gument. or will he perhaps, pretend the business crisis in Germany would not have occurred had the currency of that country been irredeemable paper instead of specie 1suppose there must be some limit to human folly.

 Now as to France, what is it that has produced her present condition of pros perity? Certainly not the supply of more money, for as soon as the war bills were paid, France began a sharp contraction of her irredeemable currency, with a set pur- pose as quickly as possible to return to the same system of specie payments which MT. Phillips wants to run away from, and under that contraction to strong effort by the people to repair thelr disasters by frugal and well directed industry. If it Is the benefcent influence ofmOre money Mir. Phillips wants to demonstrate he has been strikingly unfortunate in his illus tration. One country suffering from a severe business depression after an expan- sion, another country in Q condition of growing prosperity after sharp contrac- tiOn of currency. It seems the suggestion would be in order that MT. Phillips might enlighten his judgment by taking trip to Europe. So much for the third point VALUE AT THE MERCY OF CONGRESS.

 Finally, fourth, Mr. Phillips attacks my assertion that no other system than specie payments will remove current values from the arbitrary power of the government ; no other can give to current values that stability without which no safe business calculations can be made : no other can restore that confidence which is the first prerequisite of new period ofprosperity. Mir. Phillips with m air of triumph, points to the panics which from time to time have occurred in specie paying countries to show that confidence does not necessa- rily and always accompany the specie sys- tenn. Who asserts anything of the kind |? Not I. What do say is, that the cOnf- dence! needed to induce the capitalist to trust his money in the hands of enter. prise will not grow up again as long as the volume of the currency the country is to have is at the arbitrary mercy of Congress, whose resolutions may at any time change ali current values of the country. thus crossing the most sensible business calcu. latioN and baffiiDg the acutest foresight. Confidence will not return as long as the prospect that the wild schemes of dema- gogues and visionaries may obtain control of our national finances hangs over the business world like threatening storm cloud. demonstrated by the history of the crisis in the country in 1887 and 1857 that business did not revive and prosperi- ty did not recover until by the elimina- ton of the element of fuctuation and un- certainty, consisting in an unsafe curren. c, and by the restoration of sound mon- ey system based on specie, business was made to feel safe and firm ground again under it's feet. This is what said, and find in Mir. Phillips letter not even an at tempt to controvert it. Indeed, he need only look around in the business world to find the amplest proof for my assertion. The panics which occurred in specie pay ing times form favorite argument of the indationists. 1 know as we'll as others that they return at almost regular intervals. and that no monetary system has been in- vented to prevent them. But when from their periodical recurrence the inference is drawn that the specie system is worth nothing because it does not prevent pan ics, 1t is as wise to say that good health is worth nothing because it Is sometimes interrupted with sickness ....s

 Respectfully,

 CARL SCHURZ.

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