The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1853-09-19

cult proDlem OF ne DAY is the money market.
For the last six months it has puzz ed the most
experienced operators The tigatness which
began in April and lasted for some weeks had
no visible cause. Nor could reason be salts
factorily assigned for the relaxation which fol-
lowed. The last three or four weeks have been
another period of stringency. Many grounds
for the occurrence have been mentioned The
bears have constantly harped on our oyer-im-
portstions. Great allowance has been made
for the effect Of the new law obliging the banks
20 present weekly statements of their affairs
Stress has been laid on the unsettled condition
Of affairs in Europe and attempts have been
repeatedly made to account for the state Of our
financial affairs by pointing out the prospects
Of general war on the old Continent. That
all these and other well-known causes have had
some effect in raising the price of money there
Is no solid reason to doubt but a careful ad-
measurement of their influence will soon show
that they were incapable of producing all the
financial phenomena we have witnessed. There
must have been some other agency at work to
cause the wide disparity between the price of
money on lst September 1858 and the price of
money on lst September, 1852
At the present moment, especially, there must
be some powerful influence at work to prevent
the natural expansion of the market, and the
restoration Of period of ease. The banking
law has been fairly tried and the effects of the
transition from the old to the new system must
by this time have disappeared Thanks to the
information it affords us, any one can see that
our financial institutions are working on solid
basis, and cannot by any possibility apprehend
crisis or period Of disaster Our trade is on
the whole, very prosperous Breadstuffs are
unusually remunerative; and the better classes
of cotton, purchased in good season. have re-
turned fair profit to shippers. OF the home
investments, in which outsiders" usually stake
large portion of their funds, the bulk have
proved fortunate Railway and steamboat
communication has increased; and though we
cannot expect the stock of lines built by finan-
ciering to rule at par, roads undertaken on a
proper basis, constructed with Judgment, and
conducted with economy. are paying fair divi-
dend. Shipments to California and Australia
have, on the whole, turned out well. We find
assuredly in which large amounts of capital
have been embarked. Whence does it arise.
them that money is dear?
We pass over the ready reply of the hardened
bear. There will always be, in every commu-
nifty, men who see every thing through
darkened medum-who, in the midst Of pros
perlty, are constantly anticipating misfortune,
md pariv n
plenty. 1t is well that such should exist. They
serve useful purpose in the economy of the
world by restraining the sanguine and coun-
teracting the imprudent. But it cannot be
expected that we should devote our space to
reporting the platitudes of the croakers who are
ever reminding us that we are on the brink of
ruin, when any man with half an eye can see
subtantial evidences of our real and abiding
prosperity.
We puee them over IN Silence TO CONSIDER In
brief terms an argument that has been frequent
ly advanced of late. We allude to the supposed
influence of the money movements in England
upon our market here. We have heard it grave
ly stated that the tghtness of money in New
York was to be ascribed in great measure to
the changes in England. which have required
an increase in the bank rate of discounts to four
per cent. In other words, it is generally be-
lieved in certain circles that this measure of the
bank betokens a coming crisis, in which we
must necessarily bear our part. This we be-
lieve to be delusion. We hold the value OF
money to be established, like that of all other
commodities, by the demand and the supply.
When channels for profitable investment are
scarce, and money abounds, it will be cheap;
when profitable investments are so numerous as
to absorb greater amount of money than the
market contains the article will rise in price
The rise will indicate no coming crisis
no threatened disaster; it will merely show
that there are so many promising investments
that more money could be well employed than
a country can spare That this is at present
the case in Great Britain our mercantile read
ers must be well aware. During the twenty
years previous to 1852 the exports Of England
more than doubled in value. This year it is
expected that they will reach the enormous
sum of S440000,000. Most Of these exports of
British goods are sent out on consignment. and
long credits are allowed to the purchasers
They ere very profitable, however, and capital
lists can afford to lay out Of their money in the
prospect Of large ultimate returns. Again,
more British money has been invested in French
railways since Napoleon assembled the throne
than during the twenty years previous. In
view Of probable war, merchants and others
on the continent of Europe have exhausted their
credits on London, aud vast quantities of
British capital are now being used in business
in Holland. Germany. Spain, and even the Bal
tic and the Leyant.
All these causes produce temporary scarcity
Of money-not scarcity due to losses or iuju-
dicious operations, which is likely to be per-
manent-but scarcity caused by the very
of trade and the multiplication of
avenues to wealth. 1t is true that for the mo-