The Evansville daily journal. [volume] (Evansville, Ia. [i.e. Ind.]) 1848-1862, 1857-06-29
For the Daily Journal.
Currency and Trade.

Currency and Trade.
There are no subjects in which Editors gre
generally so deficient as in those of COM
merce and currency. And yet there is no
theme in the range Of their duties, in, which
they are So fond of showing Off and making
themselves ridiculous to the practical and ex-
perienced fnancier. The anomalous condi-
ton of the monetary affairs Of the world for
the last year has been prolific theme for
their comments; and all their discussions of
it have served but to show how little they nm
derstood it. One has recently expounded the
whole matter to his entire satisfaction in the
following paragraph:
There are two processes which are institu-
ted by every large influx of the precious me-
tails into the channels of trade: The first is
an advance in the nominal price of commo-
dites, requiring q larger sum of money to
consGmate the same transaction; the other is
disposition of mankind, stimulated by-a
brisker flow of money into their pockets, to
increase tEeir wants, and purchase and en-
Joy things which they had previously to deny
themselves. The effect Of the latter is, to
some extent, to counteract the former ten
dency. If more articles come into general
use. and classes of people, who had pre-
viously gone without certain superhuities.
begin to require them, the sum Of money in
the market will bear smaller proportion to
the aggregate of things to be purchased. and
the advance will be less than it would be
otherwise.
1t is not true that increase of trade or in
crease of the prices of the subjects of trade,
require increased amounts of money to eff
feet the exchanges of commerce. Very little
portion of the trade of the world is perform
ed by money, nor does it require money to
perform it. When trade is largest and most
active frequently the least amount of money
is used or required for it. On the contrary,
when prices are the lowest and trade dull, the
largest amount of money (coin) is employ
cd in it.
When values are sound, or bear their
proper proportion to coin-the universal cir
culating medium-no matter whether they
| are high or low-then there is confidence in
them, and the articles to which these values
are affixed will remain stable in price, and
form, of themselves, just as good basis o.
currency as gold and silver; and they will
| furnish their own medium of exchange
without the Intervention Of money.-A DRAFT
drawn on 100 bales cotton. in n season
of stable prices, for $4,000, is just as good fo
all the purposes of commerce. as s40O il
sound bank bills; and $4,000 in good banl
bills is just as good as $4,000 in specie-ant
generally great deal bettcr-for all the pur
poses OF commerce. The ability of the staple
of trade to furnish their own medium o
exchanges is increasing with all new mean
of intercommunication and transportation
Commerce is more and more emancipatin,
itself, from the need of coin in its processes
as the means of exchanges become more per
fect.-If prices bear their just relation t
specie, be they high or low--or it abundan
or scarce, the staples Of commerce will pro
vide the means for their own transportatio
and exchange, and specie is not wanted i
trade.
But when speculation disturbs the cours
of trade, and creates fictitious prices and de
stroys their just relation to real values, ther
is demand for money in larger proper
ton of transactions, than when confidence
undisturbed and perfect. Every one is anx
ious to bring the price to the test of all values
as they run bank for specie as soon as
shade of doubt falls upon its issues. Will
confidence is perfect, its bills are substitut
for money. SO every great change in com
merce and prices that induces a lack of fait
in the stability of prices, creates vacuum i
the ordinary medium of commerce, that cas-
must FIJI. All the precious metals in I'll
bowels of the earth, could not make all til
exchanges of the present commerce Of I'll
} world, if all credit was annihilated. lfever
man stood with the products of his labor j
one hand, and with the other stretched on
demanding the coin before he parted with i
how inconceivable would be the amount
specie required to maintain the present trat
: of the world. 1t is speculation that has d,
ranged prices-impaired confidence in then
!, and made the excessive demand for coin, an
not the increased amount of commerce.
u