, 1861-09-04


haps not enc OF q hundred, can
tell the meaning Of the par Of exchange
On London. 1t is generally and correctly
understood to be nine and one-half
per cent. premium, and when the
selling rate exceeds this in New York,
that the "balance of trade" is against Us,
and when it falls short Of this, the :" bal
ance Of trade" is in our favor. In the for
mer case specie IS exported, in the latter it
is imported. We mark the "ba1ance of
trade" in quotations, for there is a good
deal Of nonsense about this also, es we will
exp1ain by and-by.
The par Of exchange means the money
value CT price Of the pure metal contained
IN the monetary unit of one country, ex-
pressedin the equivalent currency terms Of
another COUNTRY. For example, we wish
to know how many francs in Paris express
the value of our dollar, gold for gold; and
We find the standard Of the French coin to
be the same as ours, 910ths fine.
The alloy in all cein is reckoned of no val
ue, because it is not worth the cost Of part
ing. The gold dollar is our monetary unit
A5t I'D weishs ; IN g7oss, Troy grsins,
Pure gold IN the dollar. Troy grains. u
The franc is the unit of France-the
smallest French gold coin.
Deduct aloy, 10 per t...,..,.,.9 9.05
tpre gold IN 20 flames. ucs..-.....-........--.89b IS
Then we ascertain by the rule Of Proper
ticn-as 1856: 28fr:: % 20 :5.18-aud that
cur American dollar is equivalent to 5
francs 1s6-10 centimes in Paris. The par of
exchange in Paris is therefore 5fr. l8c. We
1eao the quotations Of French exchange
conversely to the English. When the fig
nrcs are high. exchange on Paris is low
and IN our favor, because We buy 50 many
francs the more for dollar; an, when the
figures are low, the exchange is high, be-
cause We buy 50 many francs the less for
lie dollar. In the former case, gold lends
this way, it being Of higher market value
here than in France. Yet it may not
come, for three REASONS: First, tie differ
erence may net be sufficient to nay freight
and other charges. Second, it may be ar
rested ly the course Of exchange between
France and England. Third, the course
of exchange between this country and
England may arrest it. The intercourse
between Paris and London, however, is so
intimate that the rate here on those two
points seldom varies materially, In the
latter case, gold tends from this country to
France, subject to the same interference Of
intermediate exchanges, Of course.
It Is, however, the course Of exchange
with Eng land that determines whether the
precious metals will be imported Or ex-
ported here and the par Of exchange On
London is therefore our specie measure
This is because London, from her central
position, vast capital and commerce, has
become the great Clearing House or set.
ting place Of the commercial world. a
bill on London at sight, drawn in any par
of the world, is therefore equivalent to ST
much gold deposited in the Bank of Eng
land. The pound sterli,g is the monetary
unit Of England; it is the money Of &C
count, Of which the sovereign is the money
in tale. We have, therefore, to ascertain tn.
pure gold in the sovereign and its relation
to the pure gold in our dollar, to know tht
par Of exchange On London. The stand
ard of British coinage is measured by tn
old Abyssinian diamond weight, the Cara
"a Of which express purity, and the coin
~ ca1ats or 11-12ths pure. The exae
weight Of the British sovereign in gold i
Troy grains 1913 274.
Deduct alloy 1-1ath. ...:.--:.-..-..-........ 1os,
Pu1e geld IN the sovereign ufs-...........,.1l3o( o(
The little fraction being inappreclabl'
We say, as 1922: $l:: 113: 1866, and v
ind the par Of exchange on London to b
$4,86i65, that being in Federal money th
equivalent of the pound sterling, But Ii
British have an old prejudice in favor {
measuring the pound by the Spanish pills
dollars. now out Of circulation. the value
the dollar bling 4s. I'D. OF course there Al
. si1nences in the dollar, and 10 sixpenc'
in the 20 6hilliDgs Of the pound. Divif
10 By 9, and We find 81 ~ in the poun
which ne express in Federal money (
$44444 and an interminab1e fractio
Now, to bring this Spanish dollar yaIu
lion, which is merely nominal, 1
the real valuation Of our gold do
lar Of 25.s grains requires an add
ton Of IL per cent, or 42,22 cents [
4,44,A making 1866, and the diffe
ing fraction, which is almost insppreci,
hle, Is compensated by the 1900 grain
gold discarded IN the estimate of the so,
ereagn. This notion Of the Bank of E,
gland of adhering to an efete circulation f
the expression Of value in the pound max.
Al unnecessary complication In e1chang
and ridiculous paradox in expressing Il
- par ut q pre'n5asna. Thus is explained Il
mystery Of the exchange on England, b
ing apparently adverse always, whit
leads unpractised thinkers On tue subject
consider the so-called abalance Of trads
as a1ways against us
Another custom should be noticed, th
= of drawing go day bills and consideril
them par 1t will be observed that VIII
you have appropriated $48665 here
e1oo sterling, you have yet to place
gold in London, which will cost, uni
you carry it yourself, not less than l
:. cent, in freight and charges. You may
weu, therefore, lose 60 days interest af
sight in the bill, the matter of secrr
being properly considered. One Of tn
items compensates the other, appro1ima
1y; it Is therefore customary to conaii
bills at 60 days eight as Par remittan
the 1osa Of time in transmission being
same in either Case
In connection with this subject, we h
some remarks On the " balance Of trade
offer, IN our next issue.
THE WAY MARKED DIT.
Commodore stringham's success at Fl
teras Inlet Is indicative Of the vay in viii
as the war progresses, the rebels nav
most surely, eHecsual1y and cheaply rea
ed lisa precedent for expeditions {
cesiyelyto Charleston, Savannah, Mo
xnd New Orleans. Those places one<
+ possession Of the Federal troops, the re
:5 lion would be to all intents and purp'