Year: 1870

dollars In specie, the business OF th
! country has been eonvulsed by genera
crash every ten years. beginning in 1917
7 NJ TO the present time, except in 1857
when there was a general suspension o
} specie psyments. If the specie Of tb'
esantry was sufficiently abundant for th,
requirements Of its business, perhaps many
{ hers, a. well a. myself would prefer il
But L Is . fact sufficiently clear for an,
ordinary vision. that Il IL not and hencs
arises tbe periodical financial panies which
SPREAD ruin and devastation over the land
sweeping away in few days irom our mer
chants, mechanics, trsdesmen. and from NJ
vbo happen to be in dsbt the property
which they have spent years Of patient tol
in sccunulating.


The Truth Of what you say respecting The
inequalities existing in the condition ol
society d fully confirmed BY common Oh.
sE satioa and il cannot be denied that the
causss heretofore s~igped have failed to
satisfactorily account for these evils, o.
point to any sufficient remedy for tneir re-
movai. II. tLen, The workingmen have
ascertained the cause, and discovered the
means for the removal ofthese wrongs, they
viii have earned the gratitude Of al good
men, viii reader to this nation, and to man
kind, services and blessings. the value Of
which are beyond computation, and will
prove once more 10 the world that Peace
hath her victories no less renowned than
war"


\


This brings me TO the examination Of the
cause assigned BY you, and I enter upon
the consideration Of this part Of the subject
with due sense Of its importance. Is well
as Of my inability TO treat it as fully and
clearly a. could wish.


After the most careful examiuation and
thoughtful consideration Of what you say
respecting the sources Of wealth. the pur-
poses to which they are applied, and the
means BY which they are distributed, sm
convinced Of the general correctness Of the
proposition contained in your letter on these
subjec.a Il is manifest that the interest
paid BY railroad, mining, manufacturing
and other corporate companies, as well Is
by individuals engaged in the development
and distribution Of property and products,
becomes as much part Of the cost Of the
productions Of the goods and wares msnufac-
tured, and the service rendered to the pub
lie, as the wages paid to labor for construct
ing and operating these enterprises and
this is equally true Of the dividends Of banks.
insurance companies and other corporations.
1t is then clear that all interest paid for the
use Of money for any purpose whatever,
must in the end fall on the wealth produc-
ing element Of the nation; and when the
rate exceeds the aggregate rate Of increase
in the national wealth, the effect is to give
capital too large proportion Of the joint
productions Of capital and labor. While I
am not sufficiently Informed to Judge with
entire accuracy Of The correctness Of your
statement respecting the rate Of increase in
the national wealth. l am satisfied il approx
mates the true rate nearly enough for al
practical purposes. am convinced you
have not Overstated the average rate Of iu-
tsrest on money in the pest, and / fear the
funding sehs1Ss and other financial measures
recently adopted by COM sress. may not in
the future reduce the rate in business tran
sactions, where the investments are subject
to TAXATION


While am not ready to grant that the
reduction Of interest to q rste that would
affect the equitable distribution Of the pro-
ducts Of industry and enterprise between
capital and labor would do all you claim, l
am prepared to admit that the present exor-
bitsnt rates are among the main csusfs now
retardIng our material progress. Itis, as
you say, absurd to assume that manufac-
tursrs in the United States can pay nine to
twelve per cent. on the capital employed in
their business, and compete successfully
with foreign productions, manufactured With
capital at three to three and half per cent
Il Is not, however, entirely clear to my
mind that even with the reduction Of inter
est to an equitable rate, labor would be
prosperous in all branches of useful indus
try without some protection against the
cheap labor Of Europe. But, IN my judg-
ment. this would be 50 greatly below what
is now required, that no seriors or well
founded objections could be raised against
it BY any party or interest, and we should
at once enter upon career Of general and
permanent prosperity which no amount or
degree Of protection could secure, while
money retains its present accumulativs
power.


The reduction Of the rate Of interest Is
the great desideratum. IL 70 cheap money
rathes MGa cheap labor that is needed to
enable Us to develop our resources, and com.
pete successfully with foreign production in
the manufacture Of all articles Of prime ne
oessity and ut the same time preserve,
maintain and perpetuate our Democratic
Republican institutions. This, in my judg-
ment, cannot be provided while we adhere
to the antiquated idea that gold and silver
are the only substances Of which money can
be made, or that its value and usefulness rs
medium Of exchange, are dependent in
any degree upon the quantity or quality Of
its material, beyond that Of convenience.
Money was invented to facilitate the ex-
change Of property and products, and in
order TO be fitted for the performance OF
this function, it should be limited in volume
only BY the exigencies Of trade.


10 consroi the usurpatlons OF money, To
reduce the usurious and ruinous rates Of
interest to parallel with the rates Of the
productions Of labor and real estate, is .
most Herculean task. But the work ha,
been begun, and the most superficial obser.
yer can easily perceive that tters will be nc
peace in this nation until ths be accomplish.
cd. the CREST hattie Of labor be won, end
the intelligent Workingmen Of Amsrica sr,
righteeusly compensated for their services
The battle is not between the Workingmer
and servile labor; IL is between them and
their own representatives in the Natioua
Councils Labor will insist upon its cwr
protection and rights, and it has no mor,
right to expect success without proportion
ate effort. than Il has 10 look for clea,
stream from muddy fountain.


II With rM~~sx1 a. xhaI ~~nw~>o~R rR Al 1y-