The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1861-09-23

South Sea stocks, as was the case hundred years
ago N England; or ON worthless commercial obi
cations, as was the case in this country in
1885, when the United States Bank and
the State banks were running race for
popularity. When they are based on solid
foundation-and nothing can surely be sounder
than the specific obligations of a prosperous
nation of thirty millions of people-they involve
no intrinsic danger. That they are the incidental
cause of much loss and ruin, through reckless spe-
culations, is undoubtedly true. When speculation
fairly sets in the wsest cannot foresee its course,
and nothing is certain except that it will eventually
outrun the bounds of prudence, and that at some
point or other reaction will ensue. But this, in
national point of view, is not a matter of unmiti-
gated regret. The ruin Of spectators is often the
gain of the country; the individual falls, but the
army advances. Great services are rendered by
those reckless operators who, in of general
expansion lead the van of enterprise cap the eli
max Of commercial daring, and too often fall VIC
tins to their own boldness. This country, econo-
mists may rely upon it, will be none the for
sharp reaction from the dependency and stag
nation which have prevailed for the last twelve
months And even if the speculation era, which is
slowly unfolding, should terminate fatally for many
who are preparing to avail themselves Of its bene-
fits, sound thinkers will console themselves with
the reflection that they cannot destroy or take
away anything which they may have created or i'm
proved in the hour of their power and their
wealth.
The little spasm in the money market caused by
the first heavy Withdrawals of coin from the banks
for the use of the government has subsidized, and
10 and
for first class short mercantile paper. Lenders are
generally devoting more attention to Treasury
notes than to mercantile paper but there so little
of the latter making that the supply of money is
still in excess of the demand. The improvement
in trade which is taking place is not causing pro-
portionate increase in the supply of mercantile pa
per- an unusual proportion of the business done is
for cash. heavy failure in the dry goods trade is
announced. II has been expected for some time, and
causes no alarm. 1t was caused, of course, by the
impossibility OF cfectng collections at the South.
Foreign exchange closed steady at the recent
advance. The supply of bills from the Corn EX-
change has been reduced by the recent advance in
grain, and at the same time the recovery in bust
ness has enabled many merchants to remit to the
other side more literally than they have been doing
of late. This, and the demand for bills from parties
holding Southern moneys in their hands, will account
for the market closing at 1897 100 for sterling
and 5.25 271a for francs. Unless our importatons
should increase to very unusual extent, no per-
nanent advance in exchange can be expected.
The trade of last month showed balance of mil
lion in favor Of the port OF New York, while other
ports showed still heavier amount to our credit
Under these circumstances the recent improve
ment in bills must be regarded as merely tempo
rary
The following table shows the course of the