The New York herald., 1862-10-20

4 w fVNss, '~% c"iN hOcPthS. heppoAso iS~S~Fs y
mocey becomes more abundant, and bssss, u
they arc well conducted. endeayof to employ
them by Lending them out. A considerable esloat
was made last week to induce the banks to come
to some uniform understanding with regard TO
lending on gold. II was thought desirable that
they should agree one with another not to re-
cognize gold as merchandise or as collateral on
loans No general agreement has yet been had on
| the subject. Nor il it likely IL sound principles
| prevail, that any violent measures win be taken.
| Lending ON gold nulliies the resolution OF
the Brokers' Board against time sales of gold, and
naturally tends to foster speculation in the pre-
| cious metal. But. having initiated the practice.
! il The banks now abandon it they win simply re.
| sign lucrative branch Of business to their de-
| positors. Most Of the leading banks WILL we un-
derstand. acting independently and without con.
cert with each other, othor refuse altogether
| to lend on gold. or will only do so in cases
where the loan is evidently not for speculative
| purposes. This is as far as it is advisable to
60. Il is never wise to allow extraneous consi-
derations to counervail the natural laws of trade
| Gold rose last week to 1874 and exchange to
| l52 They closed yesterday at 1870 and l431I re-
| spectvely. Tho sudden advance in gold and bills
was directly due to speculation. which was prcdi-
Gated on the condition Of financial affairs produced
| by the errors Of Congress and mismanagcment at
| the Treasury Department. The Secretary of the
Treasury laid before Congress perfectly sound.
| and at the time the only practicable scheme.
for carrying the nation through the war. But when
it came to carrying it out lie suffered to be
committed which opened the door for spe eoulations.
which have led to a depreciation of rs per cent in
the national currency. In the first place, mca-
W taken thcv shauld hav hern
for the gradual withdrawal from circulation of the
bank notes which have heretofore constituted
the chief currency OF the country. When Mr..
Chase undertook TO supply the people of the
United States with sound and uniform currency.
legislation should simultaneously have provided
for at least the ultimate withdrawal from crcula-
ton Of the bank notes which had pre-
viously served ~ currency. This was
| not done, and the consequence has been
| that, Notwithstanding the actual scarcity
| OF currcncy--a scarcity almost unparalleled
| in our history-peope are predicting food of
| paper money. talking abou. an initiation of paper
| clrrcacy. and tinld persons are actually buying
| gold at 80 per cent premium. Again, the tax and
| tariff measures, which are the backbone Of our
| financial system. should have been enacted at
| the extra session, in July August. 1861, in
| stead of year later. These measures will pro-
| badly YIELD at least for time, a revenue of
| $40 900 900 month. If we had had such a re-
venue six months ago, gold would not have
| been higher than five or ten per cent
| premium. As it is, these measures only became
laws at the close of the last session, and the
ganiyation of the machinery for carrying out the
Tax law has been SO neglected that it will not be
| in full operation before New Year. 1t is mainly
to these errors and to this neglect and msmansge
ment that the recent extravagant speculation in
gold has been due. There is, we are happy to
say reason to believe that this speculation has
ceived It's quetus for the present. Gold. after
selling at la74, fell below 1870 yesterday, and is
rapidly eeaspg to be tempting to spectators
Those WHO buy gold for the rise the risk Of its
oeing rejected az collateral ny the banks, and
thrown out of the board by the brokers. If all
/, The loans on gold are called in. if transactions
| ii go;d are prescribed at the board, the premium
| may decline ten per cent in day. On the other
| hand, if operators sell gold short, events may
| lead to a sudden advance in the precious metal
| which may ruin them. As matters stand at pre-
sent prudent operator will not deal in gold either
for the rise or for the fall. No forcsec the
| changes which may take place hereafter; but, as
| the case presents itself, people who buy and
people who sell gold on speculation remarka-
| tiy fair chance OF losing their money. Persons
who speculate are turning their attention to fancy
| stocks, where they believe there is at least as
| much chance OF making as OF losing money.
| The money market became more active last
week, in consequence Of the uncertainty prevailing
| on the subject Of gold At the close yesterday the
fair quotation for call loans was per cent.
| Many loans at were undsturbed, and on the
| other hand quite number Of brokers were willing
/ TO borrow at per cent. But the leading lenders
were willing to advance their means on the proper
securities at per cent. First class mercantile
| paper, which is very scarce, is current
| at a per cent; certificates Of public
| Indebtedness. one year to run, sell at 99% per
| cent. Men Of means, who have idle balances at
bank, can do well by taking their money into
Wall street and lending il on call on active securi-
tics. There is general disposition among brokers
| rather TO borrow from outside lenders than from
| the bankers who engineered and executed the re-
| cent coup detdt by which SO many Of the minor
| spectators in stocks were slaughtered. A tight
money market in the present condition of affairs is
utterly impossible. All the money in the country
is flowing 10 New York for employment. Our
bank deposits have reached the unprecedented
figure of sl60, ,00O, 600. Mercantile business ia
generally conducted on cash principles. Stock
dealers cannot employ, in the most active times.
over ten to twelve million dollars. II the brokers
borrowed from the public, and not from half q
dozen banking houses in the street, who have for
some time past enjoyed a mo nopoly of the lucra-
tive business of lending on call on active stocks,
money would now be worth three instead Of FIVE
per cent
The following table shows the course Of the
stock market for the past week and month
i ,Ssn % Senf 27 OCT A Oct IL Oct Ia