Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1861-12-12

By a Hlctuatiou in the supply, but there has
been no ductuation in tie supply Of gold to effect
its price SO as to account for the immense pre-
MUM now demanded for IT, The question
arises-has gold risen at all Is a pound Of the
metal imported from California worth nearly
one-half as much again as It was a few months
ago Every reader is aware this is not the
case. The fact is that the expression gold Is
at forty per cent. premium, means really that
paper money is at forty per cent. discount, and
every reader who wishes to understand the
change that Is taking place in the value OF our
currency must substitute the term % discount on
paper for that Of premium on gold before
he can form a correct idea on the subject
The question really before the public on this
sub eet is-what has caused our paper currency
TO undergo a depreciation of forty per cent.
In this form the question is readily answered by
saying, the depreciation Of our paper currency is
the result Of an over-supply. What over-supply
means in this connection, viii be readily under
stood by a consideration OF the following, which
we copy from that standard commercial writer.
McCulloch Notes which have been made a
legal ten Ter Oand our bank notes are yrqeticqllg
in that position and are not payable on demand
(and our notes are not so payable since the sus-
pension OF specie payments by the banks). do
not circulate because of any confidence placed
in the capacity Of the issuers to retire them Cor
in the case of suspended banks to retire them
from circulation By q prompt compliance wiki
the promise 90 pay y, neither do they circulate
because they are Of the same real value
as the commodities for which they are interchaur-
ed but they circulate because. having been
selected TO perform the functions Of moasg. they
are, as such, readily received by all individuals
m payment of their debts Notes of tins descrip-
ton may be regarded as a sort of tickets OF
counters to be used in computing the value of
property, and in transferring It from one indiviI-
ual to another. And rs they are in no wise sr
tected by fluctuations of credit, their value it is
obvious, must entirely depend on the quantity
gfHem ia circulation, as compared aruh tf pau
nsea's TO be made through their fundamentally
or the business they have to perform. By re-
ducing the supply of notes below the supply Of
coins that would circulate in their place were
they withdrawn, their vaue is raised above
gold, Cor gold is at discount while. by increas-
ing them to a greater extent, it is proportional
bly, lowered Wherever the
power 10 issue paper, not Immediately con
vertible. has been conceded to any set Of per
sons, it has been abused, or which is the same
thing, such paper has been uniformly over
7--7raI mr. ;fs ---1r. E----7 g. sd
The remarks we have made in pareuthesis
show how far we consider the statements of
McCuIioch applicable TO the present state Of
things here. Il is obvious that If. when the pa
per and gold i'm circulation bear such proportions
to each other that the public take a dollar
note as readily as a gold dollar, the quantity of
paper be increased ten, twenty, OF fifty per cent,
the quantity of specie I'm CIRCULATION remaining
the same the paper would be a. d discount, as
we see It now This is doubtless the fundameut-
al cause of the present state of things bu.
other causes Of % minor or temporary character
have their influence. At the present moment
the abrupt change in the rate of gold is partly
caused by q demand for that coin for Kentucky
payments. Before the difference between gold
and paper became so great, contracts for Ken
lucky produce were made to be paid in Kentucky
bank money or specie the day Of payment has
come round, aud the contract las TO be fulfilled
The drain for this purpose has been felt in New
Orleans as well as in this city. Itist9 be noticed,
however, that merely temporary causes are not
at the foundation of the difficulty, for the ten
dency 20 depreciation goes steadily on, and
paper money decreases in relative value, as com
pared with gold. from week to week. Thought
fui persons are beginning TO ask. To what
point VIII this depreciation reach. anil where viii
stop As paper money becomes Of less
worth, the supply Increases We suppose we
shall have half and quarter dollar notes soon.
Ii q dollar note is worth only seventy cents. we
cannot expect TO get ten silver dimes for It.
Small notes become necessary not realiy So much
TO serve as small change, as TO serve as a change
of equal depreciation with the large note. Ten
paper dimes may be given for note when ten
silver ones could not be obtained. We hear also
.hat we shall have another bank of issue, solid
parties in this city having bought the charter of
the GAINESVILLE Bank Of America which they
intend to resuscitate.