Charles Francis Adams On The National Finances

The following is the letter addressed by Chas. Francia Adams to a committee of the Chamber of Commerce of New York, in response to their invitation to address a meeting in that city : Boston, March 10, 1874. Gentlemen- I feel myself honored by your ivitation, though not in a situation to accept it. The subject proposed to me for discussion at your meeting was a favorito study of mine more than 30 years ago. Neither has it lost its interest .yet. But an effort to explain my views would cali for space far beyond the limits of a letter. One of the chief wants of the present day seems to me to be a clear exposition of the true limits of useful legislation. In no department of knowlecTge is there so much uncertainty. Henee it comes that in our practice we commit so many mistaket. Applying this remark to the administration of the National finances, it appears very unfortunate that t should ever have been permitted to become entangled with a business having no proper connection with it. The collection of the revenue necessary to meet the wants of the Government, as provided by Congress and the precise disbursement of the f unds thus received, according to law, being the legitímate duties of the Treasury, they should never have been associated . with any attempt to manufacture or circuíate any mecuum ot payment other than that pointed out by the Constitution- gold and silver coin. The power of Congress to deal with that subject ís limited to the establishment of a form of coinage and regulating tho value thereof." ïhis last phrase can only mean a power to impress upon the surface of overy pieoe of coin a noto designating its exact vtdue in ordinary transactions of trade, a value which the Treasury itself is bound to recognize. To. assume that its power goes beyoud this limit would lead only to confusión. For it is obvious that the valuo of such things as the precious metáis is actually regulated by a higher and more general law than any within the sphere of operations of single governinauts. The attempt has often been made to do more, and it has always failed. Moreover, while it is clear that it is no part of the legitímate business of the Financial Department to pass outaide of the prescribed line of its duty, it is, nevertheless, incumbent uponit, so farasitcan be done within that line, to fix its administration upon a basis clearly understood by the community not to be subject to frequent or hasty changes. What the industrious and commercial classes want, above all things, is steadiness in as many of the elementa on which trade and labor depend as possible. There is quite enough of uñcertainty in those beyond human control to render it uñad visa ble needlessly to multiply them. Por any government to weaken confidence in the permanence of a policy by frequent recourse to excoptionable movements is an unpaidonable mistake. I have never enterlained a doubt that Congress transcended üs authority when it assumed the right to issue promises to pay inoney which it did not at the same time provide auy means to pay - and then undertook to force the people to take them at a rate higher than they were really worth. Credit in trade dependa upon the strict and punctual performance of agreemeuts. Credit in general is the offspring of integrity. Nobody can make it at pleasure. To expect, then, that a promissory note, known to carry a He, on its face, is going to be received" as an equal value with coin is simply folly. Not all the laws that were ever made by the most absolute of militafy chieftains, nor all the force which could b apphed to their execution, could ever make any sane man believe that a piece of paper promising to pay gold without performance of the promise is of as inuch value as the gold itself. It follows, then, that the Congressional fulmination of legal tenders was no more than a rank absurdity. Everybody knows that thi3 paper is not and cannot. be worth the itionpy which it promises, but does not pay. Evbody knows, too, that its actual value in the market depends upon the shifting accidents of trade. In point of f act, it is seldoni -worth exactly the same sum for i-ny two years together. nd what has been the consequence ? Do ve not see in it the developtuent of the pación for gambling which has been nowhere carried to a greater extent than in your great city '( The appreciation of this truth has been, in a measure, obscured to common observation by the mode in which the operationa have been described. Many people, doubtless, suppose that men are speculating on the value of gold, because it is so designated in the newspapers ; whereas, the tact is undeniable that of all the precious metáis, gold is that which holds nearest the same value all over the globe. The gambling with us springs from the frequent changes in the value of the paper promises with which gold ia paid for. Sometimes it approaches to 90 cents on the dollar, at others it falls to 84. Henee the temptation to take the chance of the rise or fall. - Rouge et noir is not more seductive. This may all be play to the gamesters, but, unfortunately, it is death to all honsst dealers in trade. Yet multitudes of the best pcople are really afraid that they would lose a great deal if any attempt were made to get rid of this unstable paper currency, and to go back to the only foundations proved by long experience to be solid - a basis of coin. So far from it, I will venture to affirm that the losses experienced from year to year, and every day throughout the year, by the necessity of guarding against the recurring fluctuations in the estímate of irredeemable paper promiaes to pay, which nobody can be sure will be paid, far exceed in their gross amount those which would for a limited time follow the adoption of a firni but judicious policy of return to payruent in coin, or in. paper at once redeemable in coin. If it could be distinetly understood that a gygtem of action to this effect would be steadily carried out by any permanent measures, however cautious, and my word tor it, jusiness would soon begin to assume a iteadiness of support which it has not cnown for years, and which equivocating or false promises never can supply. I might go on to illustrate these propositions by appeals to the experience of ïearly all civilized nations who have tried he same experimenta and have sufl'ered so rnuch as always to come back to the only solid ground ; but I ain checked by he sense that you did not expect me to write a book. 1 can fully comprehend ;he nature of the fears of nuinbers of honest men, and even of souie able njen, at ;he idea of attempting to restore coin. I would not myself urge extreme or hasty steps to bring about that result. The obection that I niake is that a wise and ef'ective policy was once laid down by Mr. McCulloch, when Secretary of the Treasury, but it has been utterly abandoned, and nothing worth has beeh put in its )lace. Had that policy been steadily naintained, we should by this time hive jeen close upon a solid base for all our contracts. As it is, we must go to work ill over again with diminished confidence n our good iatentions, which any project )f further expanding paper will be very 'ar from improving. There is nothing iew to be taught in all these schemes. - Chey have been tried over and over again, and all have equally failed ; and in iailng have occasioned severe Buffering which might have been saved. Let us ;ry to make our suffering short rather ;han keep it long. Above all, let us have as little legislation as possible, and let ;hat little be firm and clear. I am, gentlemen, with the utmost respect, yorir obedient aervant, CHAS. FKAXCIS ADAMS! The hearths of the early Britons wore ïxed in the center of their halls. The ire-place, originally, was perhaps nothng more than a large stone depressed beow the level of the gronnd to receive the Mni