of the government might be alleviated in this manner. Or if the government were to increase its volume of Treasury notes, and make them receivable for all dues, it might even thus arrest the present pressure and give relief to the country.

[Being in the city of New York in the autumn of 1873, and but a few weeks after the commencement of the "panic," I, in consequence of a conversation with a gentleman connected with one of the great dailies of that city, prepared a paper on the subject of the currency, which I was anxious to get before the public, prior to the State election to occur in a few days. On consultation, the managers of the paper declined to insert it, and it is offered now, not as a publication of that period, but because it contains some statements that may be worthy of present consideration, by reason of their connection with the subject of currency.

Though it was then said that we had "touched bottom," and though this statement has been repeated from time to time in almost every month for the last three years, it is manifest that the country has been continually falling, deeper and deeper, into distress and bankruptcy. Nor is there any well founded reason to doubt but that we shall continue to fall with an accelerated velocity, unless the government will change its action.]

NEW YORK, November 1, 1873.

I read soine days since, with much disappointment, Senator Boutwell's lecture on the "Finances of the Country." Its statement of the causes of the present unfortunate condition of monetary affairs is meagre and unsatisfactory in the extreme, and the remedies suggested anything but encouraging. Alarmed as the public mind is by widespread financial distress, it is in a proper condition to consider the whole subject, and look for substantial remedies. A plain statement of facts and a clear presentation of the obvious principles suggested by them, may tend to enlight the public judgment.

In the first place, to what causes are we to attribute the present disastrous condition of the country? By apprehending these clearly we may be able to find the appropriate remedy, as the physician ascertains the cause of the suffering of his patient before he attempts to prescribe. Unquestionably the chief cause of the present suffering is the destruction of capital in the late civil war. Yet this great fact is seldom adverted to, or sufficiently appreciated. Let us for a moment consider its magnitude. If to the recognized debt of the United States at the close of the war, there be added the sums already paid by the government, and by States, and municipalities, and individuals, the whole amount can hardly be estimated at less than than four thousand millions, ($4,000,000,000). Though the South may not have had half as many men in the field as the United States had, yet the cost of maintaining them in their isolated and straightened condition was so much greater per man, that their debt and expenditures cannot fairly be estimated at less than two thousand millions, ($2,000,000,000).

In the contest, there were at least one milion of men killed, or so disabled as to render them non producers. We may approximate the

industrial loss thus sustained.

In the year 1860, a slave physically fitted to be a soldier, that is, one of the constitution and age from which soldiers were selected, could have been readily sold in the Southern States for fifteen hundred dollars. The price of labor, too, was then lower in the South than it was in the North. There can be no doubt but that the white men of the country, many of them, too, being highly skilled laborers, and possessed of superior intelligence, were worth quite as much pecuniarily to the country. Certainly their labor would average in value more than ninety dollars per annum, this being the interest at six per cent. of fifteen hundred dollars. In other words this million men had a value of not less than fifteen hundred millions of dollars, ($1,500,000,000).

In the next place, it must be remembered that, in the two armies combined, for the period of four years, the aggregate of the men employed in the war, and thus rendered unproductive to the country, would not, on an average, fall below one million. At home their labor would probably have been worth at least one dollar per day, while in the army they received perhaps forty cents. The difference between these sums, sixty cents per day for each, will, in four years, for the whole million amount to more than seven hundred million dollars.

Again, the destruction of property in the Southern States, when we consider the desolation of farms, the burning of houses, factories, and loss of live stock, farming utensils, and all other kinds of personal property, and the labor of four years, for which Confederate bonds and notes were no compensation, the loss in the South was much more than one thousand millions, ($1,000,000,000). It is difficult to make even an approximate estimate of what the North lost on the sea. Some ships were captured, many kept unemployed, or transferred with loss to foreigners. When the war began we had one-third of the shipping of the world, and seemed about to surpass Great Britain in tonnage. If we attribute one-half of our great loss to the war, and the other to the protective tariff, the injury is immense. Mr. Boutwell estimates the earnings from transportation on the seas at one hundred million dollars, of which, he says, three-fourths go to foreigners at this time. The whole loss to the country in maritime operations since 1860, must amount to several hundred millions.

Leaving, then, out of view all such considerations as to whether we have not also lost by the crippling of other kinds of industry, and the question whether the liberated slaves produce as much as they did in their former condition, there can be no doubt but that the entire pecuniary loss to the country caused by the war, was little less than ten thousand million dollars, ($10,000,000,000).

Some persons imagine that the expenditures made were, in fact, a mere change of property. It is undoubtedly true that individuals, in many instances, made large profits, but in the aggregate of this vast expenditure, such items are comparatively small. The bulk of this expenditure is an absolute loss to the country. If I give a man ten dollars to make me a pair of boots, I have an equivalent for my money and he has realized ten dollars by his labor, so that the country has

thus gained. But if I pay him the ten dollars to fire a cannon as a salute on my birth-day, then, as I have no substantial equivalent, though the man has been compensated for his labor, the community has only ten dollars, instead of twenty as in the former case. The money spent in war was a loss of wealth to the country less obvious, because by the creation of a large debt the payment of which was postponed. The weight of that debt, in part, now oppresses the community. In view of this condition of things, what ought to have been the policy of the government? Clearly, by all the means in its power to alleviate the condition of the country. When a surgeon examines a man badly wounded, he recommends quiet and stimulants. What would have been thought of one who should impose on the wounded man the same amount of labor that is usually required of a robust one? Yet that is just what the government did with the country. During the war, to enable it to bear its burden, the government necessarily, as well as wisely, expanded the currency. At its close, sound policy required that the currency should have retained its expansion, until the country, through the industry of the people, recovered strength, and the citizens had discharged most of their debts incurred during the period of inflation. If a debt, was contracted when gold was at a premium of fifty, be paid when gold is at ten, it is clear that the debtor pays thirty or forty per cent, more than he agreed to pay.

The government, however, in violation of all sound principles, began at the close of the war, a system of sudden and violent contraction. Its whole effort seems, from that period to the present, to have been to reduce the currency as rapidly as possible. Instead of being content merely with paying the interest on its debt, and leaving the principal to be met when the country had recovered its full strength, it has made the greatest efforts to pay large amounts of the principal. To discharge a six per cent. debt, it has been taking from the people money worth to them ten or twelve, as the rates of interest in most parts of the country prove. By its contraction of the volume. of the currency, it has been crushing the debtors by compelling them. to pay much more than they in fact equitably owe. Its action is in effect, what would be that if an act of Congress, obliging all debtors to pay from twenty to an hundred per cent. more than they owe, according to the ages of their several debts. A large portion of the indebtedness of the country, though its form may have recently changed, was contracted when gold was worth fifty and even one hundred per cent. more than it now is. The action of the government is thus crushing the debtors who, of course, are the weakest portion of the community and most in need of aid.

After the close of the great European wars, in 1815, many years elapsed before Great Britain could resume, and the process was attended with great depression. So it was with us after the war of 1812. Those among us who as bondholders and moneyholders, are profited by the contraction, refer to such facts as these to prove that a depreciated paper currency injures greatly a country. They attempt to substitute effect for cause. They might as well pretend that lying in bed in the day time made men sick, because it was seen that men in

bed in the day time were often sick, while those that were well stood on their feet. From necessity during the war, the United States suspended specie payment. The reasons for that suspension exist still, though in a less degree, and cannot be ignored without inflicting great suffering on the community. It is desirable that all sick persons should get up and go about their business, but the attempt to make them walk before they have recovered their strength would be mischievous. Those clamorous for resumption of specie payments allege, that the present suspension injures the working classes. They can prove nothing of the kind, and by such assertions are merely striving to mislead the public. While the amount of currency in circulation influences prices among us at home, gold is always the standard of exchange between this country and foreign nations. Such will ever be the fact whether the volume of our currency here is large or small. Our foreign trade was as well managed and as prosperous five years ago, when gold was above forty premium, as it is now, with gold at less than ten per cent. premium. In spite of all the attempts of the moneyholders to mystify the subject, it is clear that the volume of our paper currency at home, in nowise influences the prices of what we sell to countries, or buy from them.

A second potent cause of the present suffering arises from the fact that a very large portion of all the money of the country is held chiefly in this city, for purposes of speculation in stocks, &c., or what is commonly called gambling in gold, stocks, etc. This sum, variously estimated at from one hundred to two hundred millions, or perhaps nearly one-fourth of all the money of the country, is, for the time it is so held, as completely lost for all legitimate business purposes as if it had been destroyed in some of the great fires that have occurred. Suppose ten men, by putting in ten thousand dollars each, should make a pool of one hundred thousand dollars, and meet daily to gamble for it, is it not clear that this money would be as useless as if it did not exist. We have precisely such a condition, on a gigantic scale, in Wall Street now. The western farmer cries out, " for heaven's sake, send us money to enable us to move our grain before the canals are closed by ice, and thus relieve our distress." Wall Street replies, we do not doubt your distress, and are sorry for it, but we need all the money for gambling purposes, or to meet liabilities incurred by gambling operations." The cotton planter, from the same cause, sees the value of his product diminished four or five cents in the pound, and all his profits lost. The manufacturer, for a like reason, must suspend operations and discharge his workmen, and the poor thus everywhere are compelled to suffer the greatest hardships. But for these gambling operations, as the crops of the country for the past year have been good, and the indebtedness of individuals has been diminishing from year to year, there ought to be a condition of comparative prosperity. These panics fall on the country at that period of the year when they do most mischief to the working classes. It was so in 1857, when the country was otherwise in the best condition. So, also, was it in 1869, when the Black Friday of September began the catastrophe. Whether these panics are cunningly provided or

arranged to take place at that time, so as to deprive the farmers and planters of their profits, and enable the middle men to clutch the fruits of their hard earnings, or whether they occur as the result merely of this accumulation of capital for gambling, they are equally destructive to the best interests of the country.

All civilized nations concur in the opinion that gambling is neither productive of wealth to the country, nor beneficial to individuals. I saw a Russian, at Wiesbaden, in a few hours winning at roulette sixty thousand dollars, but on the next day he lost it again, and all else he possessed, and became a bankrupt. In 1866, I met an acquaintance from the Southwest in this city, who told me that he had brought three hundred thousand dollars here, and in a few weeks had lost it all in these stock speculations. If it were publicly known that in a certain house in this city, a dozen or two young men were, by gambling rendered bankrupts, the police would in twenty-four hours come down on that house. If the city authorities refused to allow it to be interfered with, and that fact became known, such would be the indignation of the community that at the first municipal election, a new set of men would be placed in office. But while faro banks ruin a few hundred persons, Wall street gambling slays its tens of thousands.

These public operations not only tempt the incautious to embark in them, but they also seem to oblige others to engage in them at times to protect their own property from depreciation. A man who is a large owner of stocks, and whose ability to sustain his business operations, depends mainly on his being able to meet his engagements by sale of his stocks, may be compelled to enter the contest against these combinations that, for speculative purposes, seek to impair the value of his property. It is clear that if the immense sums thus employed were sent into the country to aid farmers and planters to forward their crops, to keep manufacturing establishments in operation, and to furnish the country merchants with the means of meeting their obligations to the wholesale dealers, there would be an advance in the foreign as well as the domestic trade, and an immense increase in the general prosperity of the country, no portion of which would derive so great an advantage as this city.

It is said, however, that it is impossible to put an end to this immense gambling operation. There is not the slightest ground for such an excuse. Any tolerable lawyer can draft in an hour, an act which if passed into a law, would break up this whole system. It may be said that in spite of existing legislation against private gambling, it is still secretly practiced to a small extent. A faro bank, it is true, may sometimes be concealed in an obscure room, but such an operation as that of Wall street could not exist without publicity. But it is said that we must acknowledge the right of people to buy and sell gold and stocks. This is undoubtedly true, but it is easy to so frame the law, as not to interfere with bona fide sales. We trust judges and juries to determine whether the appropriation of property is a felony, a simple trespass, a breach of trust, or a lawful taking. In like manner they are presumed to be capable of deciding whether a combination is a conspiracy or a lawful association. There have, in fact, been