The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1863-02-04
The National Currency.

The National Currency.
Gold is no longer standard of value, in this
country. This is proposition susceptible of
actual demonstration and yet, such is the
force of habit that the alarmists have had it
pretty much their own way Of late, insisting
that the premium on gold must be taken as
the absolute, or at any rate, as the approximate
measure of the depreciation of the paper cur
rency issued by the Government The un-
reasoning habit Of referring all values to gold
as standard is only to be overcome by lit
tie steady, independent thinking.
The use of money is to facilitate exchanges
of goods--it is simply an instrument. A man
would exchange -four for cloth, for example;
and by the help of money is enabled to do so
without seeking out a dealer in cloth as apur-
chaser of his -four. The morey, which is used
In this transaction, costs as much as the -four
or the cloth it is worth. 1t must be dug out
Of the mine, must pay for freight and coinage.
But the business of the world is now too enor-
nous, too complicated to be carried on by the
sole aid of SO clumsy continuance as me
tallic currency. The risk and expense Of trans
portation are too great; and there is def
cheney of the precious metals for purposes of
trade. 1t is for these reasons that paper must
be employed, representing, not necessarily
gold, but substantial values of some kind. The
simplest form Of a transaction with paper oc-
ours when man sends check upon a house
In some neighboring city in payment for goods
bought in that city. The convenience and
perfect fairness Of this proceeding are obvious
at glance.
Now by an arrangement purely artificial
gold is in ordinary times the standard to which
all the paper currency in use must be referred,
and by this arrangement gold is measurably
protected from any fiuctuation in price. When
all the paper currency of the country must be
redeemed in gold at par, there can be no diff
Guilty In procuring gold in quantities to an
swer almost any demand. 1t cannot rise above
the currency which is by law to be redeemed
by it. In this way gold is taken out of the
market; it is made the basis of the whole sys-
tenn Of exchanges, and is made SO by legisla-
tive enactments.
Since the suspension of specie payments in
this country-a measure justified and compel
led by the war-this artificial relation of gold
to other products of industry has ceased, and
we have seen it going up, iriegularly but con-
stantly, to a premium of more than 60 per
cent The explanation is perfectly clear
Gold is endowed with no miraculous property,
protecting it from fluctuation in an open mar
ket. 1t is only when Withdrawn from the
MAJ RI anI A. -. %.
ger exposed to the action of commercial forces
BY the suspension Of specie payments the pa
per currency of the country does not become
worthless-it still represents substantial val
ues; but gold is at once thrown into the mar
ket aud Withdrawn from the currency. Gold
is simply an article Of commerce in this coun-
try at the present time. No man will stultify
himself by pretending that it is in use as
money.
As an article of commerce, rapidly and al
most daily advancing in price, gold, like every
other product, obeys its own laws. 1t is very
easy to explain its advance with single
flourish Of the pen, as the result of depreci-
alton of paper money. But while paper mon
ey buys all the necessaries of life at rates not
much In advance of those paid two years ago,
1t has suffered no depreciation. 1t is nom
sense to pretend that deprecated paper will
buy goods at ordinary prices. The thing is
impossible. The credit OF the Government is
mistaken, whatever interested parties or their
dupes may pretend. Real estate is firm.
Holders are not unwilling to exchange it for
the Government currency at prices which, If
they have moved at all of late, have fallen.
Some OF the causes, which have occasioned
the rise of gold, are-the export of gold, its
use for the payment Of interest on the public
debt, its use for the payment Of duties, the
operations of brokers, and the uniounded dis
trust of the Treasury issues which so widely
prevails. These are some of the causes there
are others of course. No more complicated
problem exists than the general question of
prices. 1t is enough TO have shown by the
simplest principles Of political economy, that
the rapid advance in the price Of gold has no
necessary connection with the paper curren-
cy, which is still Insufficient for the needs of
the country. The general alarm on this sub
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