The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1861-09-16

sible charlottesville stability Of the govern
ment and the resources of the nation at
large. There can be no collapse unless the
whole country is ruined and destroyed. So
long as there Is q nation left the Treasury
notes which the government is now issuing
must be good. Even if the present United States
split up, either New England or the Central States
or the Great West could take care of the whole
debt of the confederacy, and either of the three
would do 50 for the sake of its credit This is TAX
ing the worst possible view of the future IT, as
we all believe, the government is destined to sup
press the rebellion, its obligations will be as valu-
able after the war as United States bonds were
before it commenced. There is, therefore, no re.
semblance between the basis of the expansion of
1886 and that which is now commencing. In
their effects they may resemble each other, as
both will be found to resemble, in this respect,
the expansion which followed the exports of
gold from California. In this particular the
theory Of expansions is extremely simple. The
relation between money and commodities
huctuates as the supply of either is increased
or diminished. If bushel of wheat is
worth a dollar when there are a million
bushels In market, it will be- worth SO much
less when there are two million bushels, and
u
just SO, when the supply of money, or currency,
or circulating notes is increased, the money value
OF all articles which are convertible into money
must increase, and the spectacle of that increase,
going on from day to day under mems eyes, must
lead to enterprise and speculation. In 1885 the
general bank expansion largely increased the
amount of currency throughout the country and
all kinds of merchandise, real estate and other
property rose in value accordingly, and everybody
who bought anything made money. In 1906 the
acquisition of fifty millions year in gold-which
served as basis for the creation of a hundred
millions OF paper currency-caused in like man.
ner, general advance in all kinds of property.
real estate, stocks rents salaries, labor and food;
and SPECTATORS witnessing the steady progress of
this advance, were tempted to operate on
1t, and for many years made money
steadily, until, in 1857, they overdd
matters, and collapse ensued. So now,
the general government is adding million day
to the currency of the country and no correspond
ing increase is being made in the amount of pro-
perty convertible into money. The consequence is
obvious. Property must rise in value, in proper
ton to the increase in the currency, until fresh
equilibrium is established: and as it rises, specula
tors will naturally operate on the movement.
The Sub-Ireasury is dsbursng money freely;
but the balance still remains so high that the Sub
Treasurer has not presented the draft he holds for
an additional 10 per cent on the bank loan. The
banks have already paid 46 per cent of their
s35 900 600, and of the balance some $1,000 600
will be paid in sixty day Treasury notes. It is
probable therefore, that they have seen the worst
of the pinch arising from the first fifty million loan
The public are coming forward freely to relieve
them of their Treasury notes, and the Treasury is
disbursing specie about as fast as it receives it,