FINANCIAL WORKING OF THE GOVERNMENT UNDER THE HARD MONEY SYSTEM.
The war of words was over: the test of experiment had come: and the long contest between the hard money and the paper money advocates ceased to rage. The issue of the war with Mexico was as disastrous to the paper money party, as it was to the Mexicans themselves. The capital was taken in each case, and the vanquished submitted in quiet in each case. The virtue of a gold and silver currency had shown itself in its good effects upon every branch of business—upon the entire pursuits of human industry, and above all, in assuring to the working man a solid compensation, instead of a delusive cheat for his day's labor. Its triumph was complete: but that triumph was limited to a home experiment in time of peace. War, and especially war to be carried on abroad, is the great test of currency; and the Mexican war was to subject the restored golden currency of the United States to that supreme test: and here the paper money party—the national bank sound-currency party—felt sure of the victory. The first national bank had been established upon the war argument presented by General Hamilton to President Washington: the second national bank was born of the war of 1812: and the war with Mexico was confidently looked to as the trial which was to show inadequacy of the hard money currency to its exigencies, and the necessity of establishing a national paper currency. Those who had asserted the inadequacy of all the gold and silver in the world to do the business of the United States, were quite sure of the insufficiency of the precious metals to carry on a foreign war in addition to all domestic transactions. The war came: its demands upon the solid currency were not felt in its diminution at home. Government bills were above par! and every loan taken at a premium! and only obtained upon a hard competition! How different from any thing which had ever been seen in our country, or in almost any country before. The last loan authorized (winter of '47-'48) of sixteen millions, brought a premium of about five hundred thousand dollars; and one-half of the bidders were disappointed and chagrined because they could get no part of it. Compare this financial result to that of the war of 1812, during which the federal government was a mendicant for loans, and paid or suffered a loss of forty-six millions of dollars to obtain them, and the virtue of the gold currency will stand vindicated upon the test of war, and foreign war, as well as upon the test of home transactions. The war was conducted upon the hard money basis, and found the basis to be as ample as solid. Payments were regular and real: and, at the return of peace, every public security was above par, the national coffers full of gold; and the government having the money on hand, and anxious to pay its loans before they were due, could only obtain that privilege by paying a premium upon it, sometimes as high as twenty per centum—thus actually giving one dollar upon every five for the five before it was due. And this, more or less, on all the loans, according to the length of time they had yet to run. And this is the crown and seal upon the triumph of the gold currency.