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

Gold advanced last week to l60, closing Z
about l59, and exchange advanced to III, closin
1898 1T. The advance was caused by tn
inevitable prospect Of more paper issues, and ha
been accelerated, on one side, by the failure {
our military enterprises and want of confidence
the general government at Washington, and, Q
the other, by the speculation in gold which pr
walls IN Wall street. Every loyal citizen desires
see the steady, progressive advance in g0l
checked. But it cannot be done by violent mean
Political economy inexorably declares that issue
of paper money must cause gold TO advance
price, and that the advance must be in direct DIT,
portion to the amount Of paper issues. This la
cannot be evaded or defeated 1t is possible
check the advance of gold, either by victori,
Of striking and decisive character, or
such administrative changes at Washingtc
as may revive public confidence in Il
government, or by general understands
among bankers and money lenders that they w
cease to carry gold for spectators. But thel
appears to be very little prospect OF any chang,
at Washington, and so far as the New York Gil
banks and bankers are concerned, it Is but pla
truth to say that they are mainly responsible 4
the recent remarkable advance in the precio
metal. Though the rise in god-from 100 to II
in about month-has largely deprecated Il
assets of the banks, and, in fact, rendered most
them insolvent, the infatnation of our banke
has been such that they have, almost invariab1
preferred to lend on gold instead of stocks or md
chandise. The rate of interest on loans on gold b
averaged one per cent less than that on loans
stocks or merchandise, and the'margin required Il
usually been less. Hence the foreign speculatoI
who have almost monopolized the gold bushnell
have been enabled to put gold up to premium
60, thus enormously depreciating the national Cd
rency and the assets of the banks while sped
lators in stocks and merchandise have be|
seriously Inconvenience by fictitious stringeu|
in the money market Our bankers don't seem
understand that it is of no consequence whate !
whether the crazy operators in Wall street e
so or 100 for Harlem. or Southern old, or Pra
du Chen, while an advance of ten per cent
gold is national disaster. If spectators
Wall street drive Harlem up to par 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 Ia
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 with
gard to their action is entertained in CONNIE,
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 f
cial principles; but in the end it must do On
two things-either stop the war and disband
army unpaid, or pass bill essentially simila
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 a resource in any st
United States skies Of lSsl-a most excellent
rity, with interest payable in coin-are Sc
at " 93, and are maintained at this ficti
price by general unwingness 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 a loan he could
get bids for a hundred millions at fifty cents.
is not United States currency enough at the
cial centres to render it safe for any one tc
for million dollars at any rate Of discount. d
these circumstances the Senate has 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. on 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 He
which followed the example set by Mr.. Mei
ger, the pretended Secretary OF the imae
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. u
distinction viii prove unimportant and imma
To be Of use to the government the interest
ing notes must be n currency. II the banks
To receive them ON deposit money, they W
help the government TO pay its way. IF the
do receive them as money, they Will be mer
gal tenders under another name.
The evils Of excessive issues Of paper
have been fully explained that no one c
ignorant on the subject. The President "
would appear, from his last message to Con
10 have realized that they involve nconven
Ii is certain that they insure steady adya
gold. which means progressive depreca
the national currency, and an advance in a
ponding ratio in the currency value Of real
stocks, merchandise property and labor.
ever the markets may be disturbed by spccr
or other temporary influences. prices must
tually establish their equilibrium, and If 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 conn
ing advantages. The paper money era in.
we are embarking will prove in the
districts an era Of remarkable IN
prosperity, and Of agricultural, conn
and manufacturing activity. Paper mo
England. in l79s-lsl5. laid the foundation