The Memphis union appeal. [volume] (Memphis, Tenn.) 1862-1862, 1862-07-18

The London Eeataid--en English we"
tends that the prem ium on goS-.a 18th. con-
why gold should I,e exported from tns -sason
States. I. says:
Mr.. Chase has already made good one of the
anucipatlons Of our artiele last week. It had
been contended that the issue of incon vertable
notes was sale III America, because the guam
tity was limited because it was restricted to
$3.50, DOC, 600 OF S3l, geo, 600. We then feared
the limit would hayete be extended, and now
Mr.. Chase asks for another f3I, 100000 The
elect OF this appplieation to Congress has been
to raise the premium on gold, which Is ceft4,n-
II now more than five per cent, and is even
said to have been seven per cent, though We
cannot youch for the accuracy of the latter
quotation. When powerful disturbing cause,
such as the apprehended issue of many new
notes. is introduced into delicate markets.
we know the exchange market to belts eff
tects ara oflen irregular. For the moment,
there Is an indisposition to do business in arti-
cles likely to be effected by the new cireum-
stance We are not concerned to settle what
| IS the precise premium on gold st New York
st this moment Our aim is to show that the
inference ordinarily dedueed from it is un-
founded. 1t is faneied that the higher the
premium on gold, the more likely is gold to
come here. In truth, however, the reverse
would be more accurate-the lower the prien-
| inm on gold at New York, the more likely it
| is to be exported from New York to England.
The test of exchange operations is simple
test, though the details of the necessary ealcn-
iations are often rather difficult. The test is a
plain matter of business; how is it possible
| 70 make remittance from the country where
we have our N oney to the country where we
wish 70 have it? If you have a credit. of
Sloo,eo0 at New York and wish to remit it to
England, you must choose how you will bring
| It, and the Exchange shows you how TO
choose.
Ordinarily, man with one hundred thou
send dollars to remit from New York would
choose what is to him the cheaper medium.
| Coin or bullion is an inconyenient and expen-
sive mode of taking or sending money; is is
bulky; It requires the pay ment of freight and
| the payment of insurance. A bill of exchange
| payable in London requires no such expense,
and is subject to no similar Inconvenience. II
may be sent by the mail; its cost is the post
| age, and it needs TO insurance. Commonly,
therefore, the remitter to London asks for a
| bill on London. The limit to his doing so is
the price If bills on London should be very
| dear-n for sending every flO0 to London he
should be asked to pay a very large per cent
/ age-he would pause. He would say " am
sending this piece of paper to London instead
Of sending gold, because the paper is cheaper
but is it cheaper? This sort of paper is be-
coming SO dear that l had better calculate
whether the premium am asked to pay on the
bill is not larger than the freight and insurance
| have of necessity to pay on the gold"
"lf the premium on billsis sufficiently high,
he win decide to send gold. But then, land
this is the critical consideration at the present
moment) suppose there is a premium on gold
IL 4 III
pose, what would ordinarily happen, that he
hasa credit at a bank; all he wlllextract from
the bank is paper. With this paper he must
purchase gold, and if the premium on gold be
as much as the premium on bills, he viii send
bills and not gold. He will not choose the
more cumbrous renting medium-metal-
unless he is compelled so To do by the greater
costliRess Of the less cumbrous medium
paper. ,i,