Democratic Sentinel, Volume 1, Number 30, Rensselaer, Jasper County, 7 September 1877 — THEN AND NOW. [ARTICLE]

THEN AND NOW.

John Sherman on Resumption Kight Years Ago. Said Secretary Sherman, in a speech delivered in the United States Senate, Jan 29, 1869; * * * * If Senators want other examples of the severe process of passing from a depreciated currency to a currency convertible in gold, let them read the story of the times after the Revolution, and after the revulsion of 1812, and after the revulsion of 1837, all of which w r cre periods of transition from a depreciated to a convertible paper currency. It is not possible to take this voyage without the sorest distress. To every person, except a capitalist out of debt, or to the salaried officer (the Secretary of the Treasury, for instance), or annuitant, it is a period of loss, danger, lassitude of trade, fall of wages, suspension of enterprise, bankruptcy and disaster. To every railroad it is an addition of at least one-third the burden of its debt, and, more than that, deduction from the value of its stock. It means the ruin of all dealers whose debts are twice the value of their capital, though one-third less than their property. It me ms the fall of all agricultural productions without any great reduction of taxes. To attempt this task by a surprise upon our people, by arresting them in the midst of their lawful business, and applying a new standard of value to their property, without any reduction of their debts, or giving them an opportunity to compound with their creditors, or to distribute their losses, would be an act of folly without example for evil in modern times. * * * if merchants, dealers-and traders owe more than they can promptly collect op debts due to them, they must lose to the full extent of the appreciation (of the depreciated currency); and they must make good this loi#f 4 by the sale of a part of their property at reduced prices, or by contracting new debts, to be paid in an appreciated currency. As a general rule, any appreciation of the currency is injurious to all these classes. * * * Wnat does specie payments mean to a debtor ? It means the payment of $125 where he has agreed to pay SIOO. Where he has purchased property and paid one-fourth of it, it means the loss of the property. It means the addition of one-fourth to all the currency debts in the United States A measure to require a debtor now to pay his dabt in gold, or currency equivalent to gold, requires him to pay 135 bushels of wheat when he agreed to pay 100; and, if this appreciation is extended through a period of three years, it requires him to pay an interest of 12 per cent, in addition to the ratejftie has agreed to pay. When we consider the enormous indebtedness of a new country like ours, where capital is scarce, and where credit has been substituted in the place of capital, it presents a difficulty that may well cause us to pause. * * * All the historical precedents show that fixing the day for resumption inevitably led to a contraction of the currency by the banks, so that, when the day came, the actual scarcity of currency.prevented a demand for coin ; and this process of contraction, both in England and the United States, produced the sorest distress, and was relieved in England by Parhament authorizing a loan of exchequer bills and new issues by the Bank of England. Sb, after the war of 1812, the sore distress caused by the failure of the State banks was only relieved by a new paper currency issued by the second United States Bank. “