, 1864-09-05
From the Montreal WltneeB, August ~

From the Montreal Witness, August sa.1
wHr IS MONEY so SCARCE?
As Is well known to business men, tinan-
cial matters have been in very strange aud
unsatisfactory state In this country, aud es-
ptcially In this city, tor month past. Not
NithstapoiDg the 0peniDg OF the new banks
and bank agencies among US, and the preSi-
| ouslJ supposed superabundance Of banking
capital, tie banks suddenly found themselves
c1umped previous to the close OF last month.
This was supposed to ba caused BY running
upon each other, aud the scarcity of money
WIS expected to PISS away By the first OF the
month (AuguRt.) Instead Of that, however,
1t has gone on increasing till money baa be-
come dangerously scarce, and is worth far
sons for this unexpected state Of things are
var1ously assigned By wellinfotmed parties.
We will give come OF them, the most promi-
nent:
!. The great rise In the value Of dry goods,
caused by the rise in cotton and other ha-
te1lals. aid in duties, renders nearly twice
the banking capital necessary to turn the
same quantity OF fgoods.
2. The arrangement Of the currency in the
U1ite d States has presented the settlement
OF large contracts for lumber, extending to
almost two Jears' supply, good deal OF
which le borne by our banks. The dnlness
Ct the English market also prevents the
prompt realization on lumber In Quebec, aud
the burden, in one way or other, Of that
great business, rests chiefly on the banks.
s. The high rate of Interest In Britain pre-
vents the banks from using their credits e1-
cept at considerable loss.
4. The almost complete displacement Of
bank bills bv silver in the circulation OF
conntrp parts Of Canada.
t. The necessities Of the government,
which REQUIRES almost as fast as it couE8 in
the large amount Of duties now paying:
LastlY, over. trading generally; intctred
from the fact that the loans OF the banks are
hiG her than ever, and Jet money Is exceed
iuely scarce.
Ne insert below an articlo furnished by a
good authority In Commercial matters, to
show that this Interesting question may be
viewed from different stand point. The
only tblpg absolutely certain is, that money
Ia nmnzIpgly scarce; bnt letter time is eK-
pected after the 1st proximo:
sTRlNGgNCY IN THE MONEY MAnKET.
Those of our renders interested In flnnu-
cIal matters must bave at least noticed a(lu-
Eions In the commercial department to
"tIehlnees'' In the money market, II they
have not felt 1t. So serious does this strin-
gency threaten to become, that some shre I'd
observers think there is crisis at hand. In
view Of the state ofatfeirs existing, or dread
ed, 1t is q most natural inquiry, has there
commerce by business mens Our reasons
for answering the question in the affirmative
are:
1st. Dealings In breadstuls have been very
limited this Eeneon, as nny be satisfactorily
ntcs rtained by comparing the commercial
reports of this with the past three or four
years. It has been affirmed that any of the
1arge banks here could "carryt' sli the -four
and wheat held In Montreal. without In the
lesst incom n odipg their Ordinary business.
Second. The stock of provisions in this
city ls chiefly held by parti.s who need no
bank Accom- odatIon.
Third. Teas, tobacco, md most other gro
ceriee, though in good supply, sell freely for
can hardly be attributed TO this class Of mer-
chsDdisc.
Fourth. Sawed lumber hss accumulated
for seme teeks, supplies INTENDED for the
United States hAyiDg been stopped on nc.
count OF the eeratge mCbt 10 currency there.
The most extensive holders. however. need
little or no bank a;d to hold over their pro-
petty.
Fifth. The stock Of nshes In store to day IL,
ptrhaps, only twenty-five pcr cent OF what 1t
was IL April or May. But, whatever, the
quantity, sales are quick, and the capital ab-
sorbed is that Of parties In Britain, for whom
purchases are made.
Sixth. II Is believed that equally satfsfac-
tory remarks could be made regarding dry
goods and hardware.
Notwithstanding this favorable aspect of
commercial Affairs, 10 Tever, money is scarce,
very much 80 1pdeed. And the cause of 1t
1puet exist in tie province; else, why is it
that seven to eight premium was all tlat was
pbtafbable in Montreal for sterling exchange
dny or two eince, and that with difIiculte-
the gold rate In New York at the same time
beipg quoted ut nine premium?