The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1863-02-02

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duals, and people who try to evade them will event
tually discover that they have lost their labor and
their money too.
Gold advanced last week to l6O, closing q
about l59, and exchange advanced to III, CLOSING
1857 III. The advance was caused by thd
inevitable prospect of more paper issues, and hai
been accelerated on one side, by the failure q
our military enterprises and want Of confidence II
the general government at Washington, and, OF
the other, by the speculation in gold which pre-
walls in Wall street. Every loyal citizen desires u
see the steady, progressive advance in go'l
checked. But it cannot be done by violent means
Political economy inexorably declares that ISSUED
of paper money must cause gold to advance il
price, and that the advance must be in direct pro|
portion to the amount of paper issues. This la !
cannot be evaded or defeated. 1t is possible Il
check the advance OF gold either by victorie|
of a striking and decisive character, or b
such administrative changes at WashingtoI
as may revive public confidence in TIL
government, or by general understanding
among bankers and money lenders that they W
cease to carry gold for spectators. But the
appears to be very little prospect Of any change
at Washington, and, SO far as the New York ci
banks and bankers are concerned it is but pla
truth to say that they are mainly responsible f
the recent remarkable advance in the precio
metal. Though the rise In gold-from 100 to l
in about month-has largely deprecated 4
assets of the banks, and, in fact, rendered most
them insolvent, the infatuati0n of our banke
has been such that they have, almost invariabl
preferred to lend on gold instead of stocks or me
chandise. The rate Of interest on loans on gold
averaged one per cent less than that on loans
stocks or merchandise, -and the margin required Ii
usually been less. Hence the foreign speculate
who have almost monopolized the gold busine
have been enabled to put gold up to premium
go, thus enormously deprecating the national CT
rency and the assets of the banks, while spe(
lators in stocks and merchandise have be
seriously Inconvenience by fictitious stringeI
in the money market. Our bankers don't seem
understand that it is of no consequence whate
whether the crazy operators in Wall street
so or 100 for Harlem, or Southern old, or Prai
du Chen, while an advance of ten per cent
gold is national disaster. If SPECTATORS
Wall street drive Harlem up to par no one
suffer by the farce but the silly people who buj
at the high price. But if by the aid Of the ba
gold is caused to rise to 200 the people at la
are robbed of q substantial per centage on Il
property. In that robbery. which is proceed
from day to day, the New York city banks
accomplices in the first degree, and they
ultimately be its most conspicuous victims.
The House bill providing ways and means
the prosecution Of the war has now gone to
Senate, and the Finance Committee of that
have it under advisement. Some anxiety will
gard to their action is entertained in commeI
circles. No apprehensions need be INDUCED
the subject. The Senate may argue and rein
any extent, by way of showing its independ
and giving evidence Of its devotion to sound d
cial principles; but in the end it must do On
two things-either stop the war and disband
army unpaid, or pass bill essentially sima
that which has passed the House. There are
two methods Of raising money-one is by Id
the other by printing paper money. Loans ar
selutely unavailable as resource in any si
United States skies of lSSl--amost excellent
rity with interest payable in coin-are sc
at 92 a %, and are maintained at this ficti
price by general unwillingness among holde
ruin themselves by trying to SELL If the New
banks were to put their skies on the market
price would fall to fifty cents on the dollar
Mr.. Chase had to negotiate loan he could
get bids for hundred millions at fifty cents.
is not United States currency enough at the
cal centres to render it safe for any one I'd
for million dollars at any rate Of discount.
these circumstances the Senate has a very
pie. though painful, duty to perform. II
authorize the issue Of legal tender or other
money in amounts sufficient to defray the exp
of the war. No one is ignorant Of the evils
this policy will involve. Prices will advance,
will rise, and the currency will depreciate.
there is no alternative except the cessati
the war. which. the other hand,
insure evils even greater than the ruin of TIL
tire present generation Of American citizens
game is forced, and none but demagogues or
theorists will attempt to defeat the inevitable
The Senate may follow the example of the Ho
which followed the example set by Mr.. MeI
ger, the pretended Secretary Of the imag
Treasury Of the so-called Confederate States
may divide its issues of paper money into
tender notes bearing no interest and notes
bear interest and are not legal tender. ID
distinction will prove unimportant and imma
To be of use to the government, the interest
ing notes must be currency Ii the banks
10 receive them on deposit as money, they W
help the government TO pay its way. IF the
do receive them as money. they viii be mer
gal tenders under another name.
The evils Of excessive issues Of paper
have been fully explained that no one c
ignorant the subject. The President b
would appear, from his last message to Con
TO have realized that they involve inconvep
1t is certain that they insure steady adya
gold. which means progressive deprecia
the national currency, and an advance in
ponding ratio in the currency value OF real
stocks merchandise property and labor.
ever the markets may be disturbed by spec'
or other temporary influences prices must
,ually establish their equilibrium, and il q
mains the standard everything must ever
advance in exact proportion to gold. I'll
however, one point of view in which the imp
financial evils appear to involve some comp
ing advantages. The paper money era iE
- 80 will urnvp IL, th.