, 1863-02-07

price Of gold is generally admitted. but is |
1,erlnns, not 50 we'll un1erstood as It should |
be. 1t is well known that when exchange |
rises above the cost Of shipping gold 'ncind-
the medium of remittance, When exchange
goes up, therefore, gold invariably tono"s,
with tho difference Of the expenses Of ttAns- |
mission. This is the commercial RUE which
In eome countries always operates as It does
here now. 1t must be noted, hoTever, that
when there are banks compelled to pay gold.
exchange itself must have very limited
range Upwards, because tho purchasers Of e1-
chnnge are projected frou, any great advance
by the facility Of obtaining gold, which cam
not rise 80 long as the banks furnish it ut PAT.
No doubt tlat, in the present instance, tile first
great impulse upward was from the advance
Of exchange. But when other causes began
to operate upon gold, such as those udYerted
to, its great rise produced corresponding
advance III foreign exchange, for the dealers
N aud holders Of exchange could readily ad-
could no longer obtain gold without purchas-
ing 1t from those who were uncontrolled III
fixing thu price. This is specially noticed for
the benefit of those who think gold cannot
rise. Foreign exchange, strictly an incident
Of foreign commerce, tic most fiuctuating de-
partmcnt Of trade, is itself Just as fuctuating
rs the course Of trade. There are few who
will be disposed to deny that foreign exchange
is fluctu:Aing, but close observance would
teach them that every variation in exchange
affects gold corrcspondinglF, unless the banhs
furnish it at par. The history Of commerce,
indeed shows that in the whole range of com
modities theTc Is none more sensitive in the
matter Of price than gold, when legal or arti-
fetal regulations do not interfere.
Tie question we have been considering Il
not whether papez may not be Issued to such
excess as to become dtptcciated, but whether
it has been 20 issued here during the last elgh-
teen months. The increase Of currency thus
far is under, and not in excess Of, the legiti-
mate wants OF the loyal States. 1t must be
notcil that rs soon as the banks suspended tho
whole quantity Of gold in circulation ceased
to be part Of the currency. Before the sus-
pension this gold wus not counted, because
The quantity could not be known; but the
| paper which was issued to replace it was til
ken account of at once, and used IS an argu-
mcnt to prove IN excessive expansion Of pa.
| per money. In PENNSYLVANIA the increased
| Issue oftle banks was far short ofthc amount
| Of gold withdrawn from circulation.
It should not be overlooked that the bust
| ncss Of the loyal States requires, owing to
circulating notes than in a period Of peace.
! In time Of peace the course Of circulation Is
| in the accustomed channels Of domestic trade,
where merchants and dealers know each
other, and afford mutual accommodation and
credit, which saves the employment OF large
1 %AN
| large expenditure Of Government and It's sys-
| TEN Of contracts brings vast number Of men
| into contact without knowledge Of each
other, and cash is exacted in transactions Of
great frequency and large amount The
changes and uncertainties Of business
create distr,st and caution, and these in
| crease the use Of currency. Advance in
| prices, always incident to war, IN that MINER
| Gus clas. Of articles of which the Govern
rncnt IL under the necessity of making large
purchases, swells the volume Of currency. ~
| this present war, in which more than half
million Of men and m army Of officers have
been under pay. there has all the time been III
| Elanv parts Of the country an actual deficiency
oicur1rucy, If our soldiers had been regu-
]arly paid, :. langc circulation, in addition 10
been required. The Legitimate demands
Of business and the regular Increment
Of the public expenditure and the collee-
ton Of the taxes, taken together, require 4
much larger SUM Of currency for constant
use than has been generally supposed; but
tuation will not correspond in intensity or in
quantity in different places. This constl-
tutcs tho chief practical difficulty. 1t requires
rcgnlar commercial knowledge, and tho skill
and experience Of practical bankers to man
ege tull circulation Of paper pB't, money to pre-
mens, a smaller amount may have the evil re-
suits Of excess; with proper management,
n larger amount may be an undoubtcd a1van-
tage.
There is reason enough why men should be
jealous Of large issues Of paper currency BY
the Government. It is power easily abused,
and one which has too frequently been abused.
But in the present condition OF our country
VIC should be as careful not to cry out bcfore
VIC are burt as to cry out when We are hurt.
The high price Of gold is doubtless none
tary evil, which is not only serious incon-
vcnience to many classes, but y heavy loss to
them. BY far tic greatest evil it intllets upon
| the community now, however, is the impress
sion that our currency has gone down. This
leads men into numberless false conclusions,
and induces them to act as if the credit of the
country had sunk in the same proportion.
No more efectual method of attacking public
credit could be devised. 1t i. in this way I'M
dermined by tic falseadmissions of its friends
more cGectually than it could be overthrowr
BY The open assaults Of its enemies. Thet time
; is perhaps near enough when it may rcquirs
: great effort to sustain our national securities
Ought VIC not to he very sure Of our facts ant
| doctrines before VIC admit that our nntiona
currency has fallen fifty per cent. below it:
proper level? The natural laws Of trade, ans
banking, and currency, often furnish remedies
| for thr evils which occasionally bcEa1 them.
When men speculate too freely, or oycr
trade and issue their individual paper in too
) large quantities, high rate of interest is ap1
!. to prevail when these come to b. paid. Whcr
useiCA4lAl5 Ill AoieltA trsaAG 4I4p tOu Largely
: high exchange will he the penalty and cure
Tie high Price Of gold, however much to bs
regretted, is 4 defence against greater evils
: Thcre can be no doubt that our money ma.
J Ect is in danger Of the Intrusion Of \ large
: amount Of American stocks held ir Europe
If This Influx were not held in check, the re
; suit would be calamitous to our money ant
! stock markets here, and to I'LL the interests
: public and private, connected with them. L
; is scnough for those who arc Immediately a,,;
seriously damaged By this high price of golt
to ericye over it; but holders Of the currency
. ought to admit that Its paying and parchasin!
, power is fully equal TO that Of gold thrct
. years ago, making allowance for facts and cir
cumstances and changes which neither go1i
, nor currency had amy Influence in producing
: I am, respectfully, your obedicnt servant,
/ c.