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The northern star. [volume] (Snohomish City, W.T. [Wash.]) 1876-1879, August 26, 1876, Image 2

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Persistent link: https://chroniclingamerica.loc.gov/lccn/sn84022795/1876-08-26/ed-1/seq-2/

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’l‘lldcn'u Lesser ot'Aeeepusnce.
.\l.n\\\'. .li.‘_\ I'. I‘7o.
GENTLHMKN: \\ In -. l llml the honor
to N‘i‘l'iVl‘ illl‘ l" r-ev. ii ill ilu‘l') of your
letter on lrelmll of tow llmlltll'l’dlllj Nze
liorml Convention. in in u, llie L’Htli. at
‘t. Louis. mlviping llll‘ 1~l rm nominntiou
M eunlliulnte for the luthrriurney repre
~ellte<l by lllut bully 1v r the oiliee ol'
l’re~i«lent of lhe l'niln vl Stun-a. lnnsmr
ml tlmt at my mt'lil ~t mnvmienee rind
in eonlin‘mity nith "Hue, I would pref
pure rind trnnonit to _\otl m_\' ueeeptunce.
I now :n'nil my~e|l ol' the tirat interan
In my occupations to fulfill that ellg-lgl'_ I
merit. The com-ention. lwlnre making _.
its nominntions, mlophul n d- elurutiou of ;
principles which, us it whole, seems toy
men wise expo~ition ol' the necessities}
of our country and of the relorins needed '
to bring buck the government to its true '
functions, and to restore the purity of!
its mluiiuistrntion, mid to renew the
prosperity of the people; but some of
these relorlns are so urgent. that they
claim more thun n pairing npprovul.
The mwessity of reform in the public e.“
pcnses, federnl stute nnd municipnl, lllltl
modes of Federal tauntion justified ull
the prominece given to it in the deelnr
tion at the St. Louis convention. The
present depression in nll business and in
dustries of the people. whieh iarlepriv
ing labor of its employment und carry
ing want to so mnny. lins its principnl
cause in the excessive government con
sumption, under illusions of specious
property, engendered by fucts. The
policy of the federal government wust
ing capital has been going on ever since
1805. which could only end in universal
disaster. The federul taxes for the lost
eleven years tench the gigantic sum of
four thousand five hundred millions of
dollarsplocnl taxation has amounted to
one third as much more; the vast ag
gregate being not less than seven thou
sand five hundred millions. This enor
mous tsaation followed the civil conflict
that had greatly impaired our aggregate
wealth. and had made a prompt reduc
tion of expenses impossible. It was ag
gravated by such unscientific and ill
sdjusted methods of taxation that the
increased sacrifices of the people ere be:
yond the receipts. It was an aggravated
financial policy which tended to diminish ‘
the energy, skill. and eeonomy of pro.
ductioo and frugality of private con
aumption, and induced miscalculations
in business and an unremunerstive use at
-capitnl‘nod labor. Even in prosperous
times the daily wnntsv of industrious
communities press close upon their daily
earnings. The margin of possible na
-tionsl savings is at best a small percent
age of the national earnings; yet tor
these eleven years the government con
snmptioo hashesn a larger portioirot‘
nthe national earnings than the whole
people can possibly save even in prosper
ous times. For all new investments the
-conseqnsnces of these errors are now a
present public calamity; but they were
never doubtful. never invisible; they
were necessary and inevitable. and were
't'orsseen and depicted when the waves
- of that fictitious prosperity ran highest.
1n aspeech made by me on the 24th
41-September. 1868. it was said of these
taxes that they bear heavily on every
man‘s income, upon every industry. and
.upon every business In the country, and
year by year they are destined to press
still more heavily unless they arrest 'the
system that gives rise to them. It was
'Lomparatively easy when values were
doubling under the repeating issue of
-legal tender paper money to pay out of
the froth of our growing and appsrent
wealth these tsxes, but when vnlnes re
~ceds and-sink toward their natural scale
-the taxgathersr takes from us not
only our income, not only our pronto}
but also a‘portion of our capital. 1 doi
inot wish to exaggerate or alarm. [simply l
~say that we cannot nation] the costly}
~q‘mlicy oftthe Radical majority of Con-l
gress; we cannot afford that policy to
ward the South. we cannot nil'ord msg
nificent and oppressive centralimn into
which our government is being convs rtrd;
we cannot ntiord the present magnificent.
scale of taxation. To the Secretary oi
the Treasury Isaid early in t 865- " there
is not aruyal road for the government!
vmorethsn for no individusl or corporu- ‘
«ion; what you want to do now is tocnt l
down your. expenses and live within 3
your lllC-Itlll': [would give all the leg
erdemnin nt‘ tinnnec :ttui tinnneiering-J
would give the whole of it for the old
home-ninth: tnoxitn ol ” live uithin your
illl'ulll‘f.“ Tlll‘i reform will be reset. d
at ewry step. but it IlllHl be pressed per
aistl-ntly. \\'e.-xreto~d:t_v the liltllll'tlltlit‘
represetitnlives of the people in llllt‘
brunch of Congress while struggling to
reduce expenditures. compelled to con
front the 111 l once of the 5: hate ttnd Ex
ecutive, thnt unless objectionable up
pt‘opritttiotH bectitisettltd to theopri'tt
tions of government illt‘l't'lll’llltl‘ shall
sull'er detriment or cease. in in} judg
ment on utnetttilttent tn the constitution
ought to be devised, uepul‘nting into ii a
tinct bills upprnpriuiiltltsfor the various-t
departments of the public service. ltlltl
cXt-lutling from estuh bill nli :tppr-tprm
tious for other objects and all indep. nd
ent legislation. In thut way lliun~- en"
the ru'isory power ot‘ euch oi the Jno
houses end of the Executiwbe pres. Well
and exempted from tlte tnorul distress
which olten compels us>ent to objnt-tion
uble upproptintions ruther than sltlp the
wheel» of government. An necesnot'y
cause, enhancing distress in ltnsim tot. is
to be found in the systematic and insup
portable ntiagth-rnmcnt imposed upon
the States of the South. lit-sides the oi
dinnry eil‘ects of un ipnornnt and dis
honest udniinistrniion, it hnu inflicted
upon them enormous isstlesoi fraudulent
bonds, the scunty avails of which Were
wasted or stolen, and the existence of
which isa public (liscredit,tentling to
bankruptcy or repudiation. Tums gen
emlly oppressive, in some instances haw
confiscated the entire income of property
and totally destroyed its market value.
It is impossible that these evils should
not reset on the prosperity of the whole
country. Nobler motives ot humanity
concur with the material interests of all
in requiring every obstacle to be re.
moved to complete a durable reconcilin
tion between a kindrod population, once
unnnturally estranged on the basis re
cognizcd by the St. Louis platform. The i
Constitution of the United States withi
its smendmentsis universally accepted
as a final settlement ot the controversies
‘ which engendered the civil war. But in
aid of as result so beneflcent, the moral
influence of good citizens. as well as
every government authority. ought to
be lent not alone to maintain their just
‘equality before the law, but likewise to
establish a cordial fraternity and good
will among citizens, whatever their race l
or color, who are now united in the one
destiny of common sell government. If
the duty shall be assigned to me, I
should not fail to exercise the powers
with which the laws and constitution of
our country clothe its chief magistrate
and to protect all its citizens, whatever
their former condition, in ovary political,
and personal right.
Reform is necessary, declares the St.
Louis convention, to establish a sountl
currency; to resume public credit and
maintain national honor; end it goes on
to demand a judicious system of prepa
ration by public economies, by otilcisl
retrenchment, and by wise tiuances,whieh
shall enable the nation to assure the
whole world of its readiness to meet anv
of its promises at. the call of the creditor
entitled to payment. The object de
manded by the convention is the resump
tion of specie paymeats on legal tender
notes of the United States that wonki
not only restore public credit and main
tain the national honor, but establish‘
sound currency {or the people. The‘
methods by which this object is to he
pursued and means by which this object
‘is to be'sttsined are disclosed by what
‘the convention demands for the fotnre‘
and by what it denounces in the past.
The resumption of specie payments by
the government of the United States on
its legal tender notes would establish‘
specie payments by all banks on all their
notes. The official statement made on
lthe 12th ol May shows the amount of
I bank notes to be $30,000,000, less 02,000,-
000 held by themselves. Against these
$28,000,000 of notes, the banks held‘
141,000,0001egnl tender notcs or a little i
more than tivc per cent. of their amount“:
but they also held on deposit in the Fed‘ ‘
crai Treasury as security for these notes,
bonds of the United States, worth in‘
gold about 836,000,000 available and
current in all foreign money markets.
lln worming, the bunk-4, even if it were
:possiltle [ortheir notes lobe presented
‘lur lttlymrnl. would hurt- tire hundred
? millions of specie funds to pay “.‘.‘o mil
; lions of notes, “'lthout euntrttetiug their
loans to their euatomrrs or calling on
any private direetor {or payment. Sus
-1 pended bunks uutlertxtking to resume
l have usually llt'(‘ll obliged to culled from
Inettiy hortou‘ers menus to redeem their
il'xt't'nnivc issue and to provide l'l‘Bt‘l'Vt‘S.
l A vogue ideit ol‘ dtstrt $5 is theretoreol‘ten
Z'lssllt'itltt'tl with the [)l'lvt't‘ss ot' resump
ltton. but. tlte conditions which caused
l distress in former instances do not exist.
l The go‘verntueut him only to make good
its own promises ttnd the bunks cun take
(Title of themselies without distressing
tlll)'l)0liy. The government is therefore
the sole delinquent. 'l‘ito umount ol
legal tender notes of the United States
now outstanding is less than 300 million
of dollms lM‘nitlcsiM million of fractional
eurreney. How shell the government
muke there notes at ttll times its good its
.~peeiet It has to provide in reference
I to tile muss which would be kept In use
by tile wants oi business it central re
rit'l'Vt' ol' eoin itdequnte to tire adjnslmcnt
of temporary tint-tutttions of interim
tiotntl buhmces and us it guitrnntee ngninst ‘
transient. lottns itrtifieinlly created by ‘
panic or by speculation. lt iltla also to
provide for the puyment in coin, of such ;
l'raetiomtl currency as tmty be presented
tor redemption. and such inconsidernble
portions of legal tenders as individuals:
may Irom time to titne desire to convert ‘
lor spt-eie use or in order to lay by in
min their little stores of money. Tui
make the coin now in the. treasury nvnil- l
able for the oltje-t at this reserve, to‘
gtmluully strengthen and enlarge that}
reserve end to provide for such:
other exceptional demand for coin ss Inn y ‘
urine, does not seem to he s wurlt of ditii
culty it winiy planned anti pursued.
It ought not to cost any sacrifice to the
business of the country; it should, on
the contrary. revive hope sod confidence» 1
The coin in the trensury on the 30th of‘
J une. including what. is held against t-oin
certificates, amounted to nesrly 874,000; l
000. The current of precious Inetuls‘
which llttl flown out of our country forl
it years. from July Ist, 1805. to June 30,‘
1876. averaging ncsrly .76.000.000 st
year. was 0811000900 In the whole pc- l
riotl, of which $617,000,000 were the
product of our own mines. To match
the requisite quantity hy intercepting
from the current flowing out of the coun
try, and by nequiring from stocks which
exist abroad without disturbing the
equilbrium of the money market is a re
suit to be easily worked by pructicsl
knowledge and judgment. With respect
to whutever surplus of legal tenders the
wants of business may tail to keep in the
United Btstes. and which. in order to
save interest. will be retained tor redemp
tion, they can either be paid or they can
be tunded. Whether they continue on
currency or be absorbed into a vast mess
of securities held as investments, is
merely s question of. the rate of interest
they drsw. Even if they were to rcmsin
in their present form and the government
agreed to pay on them is rate of interest:
making them desirable investment. they
would cease to circulate, and tslre their
plsce with government. ststo. municipal
sntl other corporate snd pnvntc bonds.
of which s thousand millions exist
smong us. In the perfect use with
which they csn be chsnged trons cur
rency into investments lies the only dsn
ger to bsgnnrded against in the sdop
tion of general mossuros intended to to
movos clesrly ssccrtsinsd surplus that
is withdrswn trom'sny which no not s
permsnent excess beyond the wsnts of
business. Even more mischicl would
result trom sny measures which stl‘ected
the public imaginstion with the fear at
on spprehsnded scsrcity. In s corn
munity where credit is so much used to
iluctustions of Values the vicissitudes in
business are largely csnssd by the tem
porsry belief-of men, even before their
beliefs can be confirmed to sscsrtsined
renlitics. The amount of currency nec
essary at s given time «not be deter
mined srbitrsrily, sud should bomsnmed
on conjecture that its amount is subject
to both permanent sud temporary
chsngos. An enlargement ot it, which
seemed to ho dursble, hsppened st the
beginning of the civil wsr by s sub
stituted use of currency in the place of
indivulual credits; it varies with certain
states of business, it lillt'ilinlt's uith re:-
, ularity at ditl'ert-ut acusoli'.’ t'or inst-inee.
alien buyers of grain and other aura-til
, tural products begin their operations
they usually need to borrow capital or
circulating credits by “iiii'il to make
‘pttrchases and want. these funds in car
irency capable of being distributed in
isuitlilSllilisiiiiitlllg uttan-rous sel‘ers; an
additional need ot‘current-y at such times
ins five or more per cent. of the anole
volume, and if a surplus beyond what is
required for ordinary use tltll‘fl not hap
pen to be on hand at the money centres
a scarcity man»! and also stringency in ,
. the loan market. It was in relerence to;
lsueh expediences that in the diselhsion 1
int‘ this subject in my annual tncssauc toi
.the New York Legislature, in January
iiSTfi. a suggestion was made that the
i federal government was bound to redeem
tcVel‘y portion of its isslcn which the.
lpuhlic does not wish té use. ilavingi
iassutncd to monopolize the supply oi"
; currency and enacted exclusions against
fei'erybody else. it is botmd to furnish all
the wants of bu~iness require; the sys
tem should allow the volume of circulat- i
ing credits to ebb and tlow according to
every changing want of business; it
should imitate as closely as possible the
natural laws oi trade which it has super
seded by artificial contrivances. 1n a
similar discussion in my message oi
January, ISTtI. it was said tluit resamp.
tion should be eti'ected by such measures
as would keep the aggregate amount of
currency self-adjusting- (luring all process,
without creating at any time an artificial
scarcity, and without exeiting public
imagination with alarms. which impair
coniidence and contract the whole large
machinery of cmlit and disturb the
natural operations of business. Public
economy. oiiicia retrenchment and wise
tinance src tneans which the St. Louis
Convention indicates as a provision for
resources and redemption. The best re~
source is a reduction of expense of the
government below its income. for that
imposes no new change on the people.
If. however. improvidence and waste
which have conducted it to a period of
falling revenues, oblige us to supplement
the results of economies and retrench
i ments by some resorts to loans, we should
not hesitate. The government ought not
to speculate on its own dishonor in order
to save interest on its broken promises,
which it still compels private individuals
to accept at a fictitious par. The highest
national honor is not only right, but
would prove profitable. The public
debt of nine hundred and eighty-live
millions bears interest at it per cent. in
gold and seven '1“!!de and twelve
millions at 5 per cent. in gold, the aver
age interest is 5.58 per cent. A finan
cial policy which should secure the
highest credit, and wisely availed oi,
ought gradually to obtain a reduction of
1 per cent. interest on most of the loans.
A saving of 1 per cent. on the average
would be one hundred and seventy-seven
millions a year in gold ; that saving reg—
ularly invested at 4} per cent. would in
less than 88 years extinguish the princi
pal. and the whole one thousand seven
hundred millions of funded debt might
be paid by this saving alone, without
cost to the people. It Is best even when
preparations shall have been matured on
the exact debt, that it would have to be
chosen with reference to the existing
crate of trade and credit operations in
our own country, and the course of for
eign commerce and condition of ex
chango with other nations.
' The specific measures and actual dates
are matters oi detail having reference to
ever changing conditions. They belong
to the doiusin of practical, administra
tive statesmansbip. The captain of s
steamer about starting trom New York
to Liverpool does not assemble a council
over his ocean chart; a human intelli
gence must be at helm to place the shitt
ing forces of waters and winds. to feel
the elements day by day, and guide to
mastery over them; such preparations
are nothing without them. A legislative
committee fixing a day and otiicial
promises are shame. Among thoughtful
men, whose judgment will. at least, sway
public opinion, an attempt to act on
such a commandf or such promises, with- .
out preparation, would end in anew:
suspenders; it would be a trash calamity
prolific of t‘tlniugiun‘ “inn,“ and dis
trwu. The net ol Cough-...; "11-ltlli N
1875. enacted tlut on uml "m... "I“ I“,
ot July. Hill. the Seen-lat) ut tl..- Tm",
ury ahnll redeem. itt eoin by“ m...”
notes of the United States, on prn m w“.
tion at the Mike ot the tlssislunl lreas.
urer in New York. It ltlllllOl'thw the
.H‘m-retury to prepare and [mu-3.“. for
shell rmuuiption ot apt-vie ”mm,“ by
useot‘any surplus rn-rrnues not other
wise appropriutell, nnd by Issuing in his
di~eretiou rennin clown. ot bonds,
More than one and u hull ol‘l'onr y..."
have pmsed and Congress uml the Pres.
ident have continued eVer since to unite
in acts which ImVe legislated out of ex.
istem‘e every possible. surplus application
to thispurpose. The coin in the treat),
my eluimed to belong to the goVerament
had. on the 30th of July. fallen to less
than forty live millions ot'dollars ugainst
titty-nine millions on the lat of July.
1875, and the availability ot purt ol the.
sum is fluid to be questionable. The
reVenues are falling in!!!” than appm.
printions and expenditures are reduced'
leaving the treasury with diminishing
resources. The Becretury has done
nothing under his power to issue bonds;
the legislative command and the Olllnlnl
promises fixing a duy of resumption huve
been made, but there has been no econ
muy in the operstions ot' the govurn
ment. The homely maxims of every day
life ure the best stundurd of its conduct.
A debtor who should promise to pay it
loan out of a surplus income, yet be seen
every day spending all he could lay his
hunds on in rlotous livlng, would lose
all character for honesty. and his otl'cr of
a new promise, or his profession as to
the value of old promises, would uliks
provo derision.
’ The St. Louis platform denounces the
‘ failure for eleven years to make good the
} promises of the legal tender notes; it de
-3 nounees the omission to accumulate any
reserve for their redemption ; it de
nounces the conduct which. during eleven
years ot peace, has made no advance
towarda redemption, no preparation for
resumption; but instead, has obstructed
resumption hy wasting our resources and
exhausting all our surplus income. and
while pretessing to intend speedily to
resume npecie payments, has annually“-
acted imh hindrance thereto, and having
first denouced the baaeness of a promise
o! a day of resumption, it next denounces
that barren promise as a hindrance to
resumption; it then demands establish
ment of a judicious system oi preparation
for resumption. It cannot be doubted
that the substitution oi a system of prep
aration without promise of a day, for the
worthless promise of a day, without a sys
tem of preparation, would be the grain
oi’ the substance of resumption, in ex
change for its shadow. Nor is denunci
ation unmerited of that improvrdence
which in the eleven years since peace
which has consumed forty-five thousand
million dollars and yet could not afl'ord
to give the people a sound and stable
currcnm. Tire and a halt‘ per cent, of
the expenditure of these eleven yearil
or lesa would have provided all the ad
ditional coin needtui to resumption.
The distress now telt by the people in all
their business industries, though it has
its principal cause in the enormous waste
of capital occasioned by the false poli
cies of our government, has been greatly
aggravated by mismanagement of the
currency. Uncertainty is the prolific
source of mischief in all business. Never
were its evils more felt than now. Men
do nothing, because they are unable to
make any calculations, on which they
can solely rely; they undertake nothing,
because they are at s lose in everything
they would attempt; they stop and wish;
the merchant dares not buy lot the future
consumption of his» customers; the man
ufacturer dares not stake fabrics which
may not refund his outlay; he shuts hie
factory and discharges his workmen;
capitalists cannot lead on security they
do not consider ante, and their lands lie
almost without interest: men with enter
prise, who have creditors to pledge will
not borrow; consumption has fallen be
low thenstarsl limits at reasonable econ»
emy; pnees of many things are under
the range of the l'rugsl specie payment
times before the civil wsr. Vast masses
oi currency lie in'illt'ldl unused. A year
and a halt ago legal tenders were at their
' ‘Csadadsd from third Page.)

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