The Sun.
London, England, 1870-03-07 00:00:00

, MARCH 7, 1870.

MONEY AND BUSINESS.

(From Messrs. Bowles Brothers and Co.'s Circular)

PARis, March 4
One year ago to-day President Grant took his seat, and
the steady rise of our Government bonds, with the fall in
the gold premium since then, tells greatly in favour of his
wise and effective administration. During the four pre-
vious years gold had averaged 140 and bonds had been
greatly depreciated. In the past week gold has touched
115, and bonds have recovered fully twenty-five per
cent. upon their gold price of a year ago The tele-
graph advises a further reduction in the public debt of
61 millions for the month of February, and the advance
of last week will doubless be well sustained, showing that
it was not speculative but appreciative. Even to us, who
foresaw this recovery, and in August last pointed out the
signs of its proximity, it is hardly less surprising than
gratifying to note the extent of change in the public
opinion. With few exceptions foreign financiers and busi-
ness men have looked on, as they have during the war, to see
long established rules disproved, and predictionsof conse-
quent disaster falsified; they judged us bytheir own standard,
our democracy, our disregard of traditions, our entire
lack of any ruling class or special reverence for rulers,
simply as such seem to them signs of coming anarchy and
agrarianism, placing ourselves at their point of view. We
can well judge of their surprise at seeing such a people,
of a political existence comparatively recent, carrying
its bonds in one year, and against all opposition, to a
level with those of the oldest and best administered
European nations. Eight years after their creation,
during the complications of civil war, to see the Fe-
deral Bonds rise above par, so as to render their con-
version to lawer rates not only possible but advisable,
has quite confounded and put at fault all oppositions.
This last advance to par has been the final victory of our
financial campaign, and with it closes the last serious
phase of our Civil War. We step at once to our rightful
place in the van of progress, seeking alliance and
friendship, and deprecating further jealousies or op-
position. We have shown the firm and matured
determination and power to discharge our national in-
debtedness; this spirit was doubtless concealed from the
foreign view by the caprices, the political trickeries,
the mistakes even which are inseparable from the youth
of any nation ; superficial minds have not taken the trouble
to go behind these surface-faults, and have measured the
progress of our new people by their own standard—hence
their profound surprise. The child has become a man;
the late youthful nation of the last century has attained
its majority, and nothing can stop the march of its deve-
lopment. Instead of contesting these rights, our present
nation should counsel with and lean upon us in turn
giving the experience and support of their age and sav-
ings to aid rather than to obstruct a progress which is its
he common interest of all.
(From the Springfield Republican, Feb. 18.)

The abundance of money, now for some weeks in the
market, as yet finds little employment in an increase of
either business or speculation. Tho internal commerce of
the country is waiting for Congress in doing something
towards a better currency and the alleviation of taxation,
with, it must be confessed, a poar prospect of the passage
of anything more than makeshift measures. The currency
of the country, it is true, c,enes nearer to a known standard
at the present time than it has for some years, but during
those years the people accepted, and did business with, a
more depreciated medium, because there was no escape
from it, the day of remedy being so far distant. We are
now almost. out of the woods, on the very verge of the
clearing, and there is much anxiety to re-establish our
reckoning before engaging in new ventures. It is also to be
remembered, as among the minor causes of wintertullness,
• that the present facilities for communication and transporta-
tion render it unnecessary that preparation for the spring
trade should begin so early as it used to. The effect of the
Supreme Court decision on legal tenders has been very slight,
as was expected. Many parties who have been receiving
currency interest on contracts prior to 1862 will not find it
for their interest, and so are not disposed to insist on the
payment of gold henceforth. The New York savings
banks have been interviewed," and profess to hold but few
mortgages back of 1862,and will not demand gold oven on
those. They may consider themselves fortunate if the de-
positors of sums previous to that time treat them with.the
same grace. The life insurance companies hair() also de-
cided to accept currency. Some are disposed to question
whether the coupon of a bond executed' prior to 1562,
covering the interest say from January to July, 1870, is a
part of the original contract and thereflye affected by
the decision. The interest is certainly :IC part of the
original contract, else the latter would never have been
executed. The fact that time must elapse before the in-

torekt can possibly accrue is so essential to the idea of
interest at all that we wonder how any one can make
it the excuse for absolution from the operation of the
decision. Rents on old leases coma under. the Came
category, and the Astors, Stewarts, and Lorillards are re-
ported to incline to a merciful view. Mercy is commend-
able, but should not, be hid in the darkness of a legal
quibble, and where justice instead is demanded let the
justice of the Supreme Court decision be meted out. Of
the States, Missouri has already had up the payment of
gold interest in her Legislature. Unfortunately the mover
was a heavy owner of Missouri bonds, and the House
thought it proper to snub his rather forward attempt to
_ _

bull the quotations. The State Treasury is full, however
and the sentiment of the press and undoubtedly of the
Legislature is in favour of prying gold. The banks at

New York now have out $265,864,652 in loans, aping

$264,380,307 last year, and hold in gold and gold notes
$38,072,184, against $25,854,331, and in deposits
$213,142,740, against $192,997,860. This gold item, show:
ing a specie reserve more than 50 per cent. larger than
was held a year ago, indicates the thorough preparation of
the banks at New York for specie payment. It is a very
grati:ying fact that the banks at the commercial centre of
the country are so well ballasted—a fact which should
give the Administration and Congress more courage for
financial reform. At Boston the banks are carrying a larger

ban than ever before and will not care to increase it,
except with such funds as may be paid in by holders of
maturing paper. Interest on all call loans at both points
is at 4to 6, with discount at 7i to 10. At Chicago wheat

speculation revived somewhat last week, and occasioned

some activity in the local market and the recall of funds

:rom New York. The money market is very easy abroad

also. The recent Russian 5 per Cent. Loan of $600,000,000
at 80 per cent. was talon greedily in London, and the
stock rose 2i per cent. on the street before the awards
were made public. English and continental money is
beg ofered in New York at 7 per cent., on good collate

rat for four months. Gold has passed through one or two

advances to lower quotations than those of a week ago.
The action of the Lower House of Congress in refusing
to table the bill for sso,ooo,ooosinflation, on Monday,

Was erroneously translated on Wall-street to mean favour

to the measure, and gold went up to 121. It dropped back,
with a better understanding of the case, to 119 j. Again

PARIS, Friday, Feb. `25.
Since date of our last Circular United States Bonds have
reached their par value. Henceforth their conversion or
redemption in gold at par depends only upon the option or
will of Congress and Mr. Boutwell. This unexampled
progress of our Government credit should be carefully
marked by its opponents and friends alike. It has been made
in the face of discouragement and opposition rarely
equalled. It has had to struggle with popular ignorance
abroad, widely-spread and maintained, in all ways pos-
sible, by eager speculation and jealous competition. It
Las had to strive with an almost equal popular ignorance
at home in America, where a giant people, fearless in all
else, but young, and therefore inexperienced in finance,
has ignored or mistrusted its own great strength.
But this time is passing, or has passed. Every rise in
these values is thinning the ranks of the opposition and
swelling our ow❑ with converts to the faith in our credit
and in a low funding rate. The more intelligent, and
some of the largest banks in England and on the
Continent, are to-day loaning or aceeptinx upon these
bonds, and when in a short time this shall become
general, how long will it take to convince the pub-
lic of the superiority of a Government security pay-
ing 4 per cent. at their own doors, NI, bile remote from
all danger of European convu'sions, and upon which they
can, if wanted, borrow money at two and a half or three
per cent. ? It may seem hardy to superficial observers,
or to those who believe in traditions, to expect the
securities of the United States to overtake and exceed
the obligations of leading Continental Governments, but
to us, who do not live in the past, there should be nothing
strange or improbable in it. Our bonds rest upon the security
of a united and self-governed people, not upon a privileged
part or class government. They rest upon a base, not upon
a superstructure, and this very distinction between apeople
governing and peoples governed is the true key to the
whole position. With capital idle, or at two or three per
cent. per annum today, why are all three per cent. Euro-
pean Government Bonds below par? Because there is in
every case a risk, greater or less, of the Government's '
permanence, as indicated upon the market barometer by the
depreciation of their bonds, and capital makes them pay in
proportion to the risk, giving 92 per cent. to England, 74 to
France, and so on. What risk attaches to our popelar_Go- I
vernment? Does any unprejudiced perscn still think it 'I
may be overthrown ? Decidedly no! Theu our bonds '
will surely rise to their true level, irrespective of others.
It is hut a question of time, which the following table may i
help us to solve•