The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1865-11-25
The rinancial Situation.

The Finan metal Situation.
| We publish this morning an interesting lee
ture on the present financial condition of the
country, delivered by Silas M. Stlwell before
gathering Of capitalists in this city. Govern
ment finance Is q subject which Mr. Stilwell
has probably studied more thoroughly than
any other person in this city. Not only has he
been through the great financial convulsions
in this country for nearly half q century,
and infinitely examined the causes, both in
theory and practice, but he has also made him
self thoroughly conversant with the financial
systems of all the principal European govern
ments. What he says in relation to our pre-
sent finances viewed in the light of facts
gathered in his experience, is, therefore, worthy
of the attention and careful consideration Of all
who are trying to solve the financial problem
in this country, or in any way have voice in
shaping the course to be pursued in the next
few months. We commend this lecture to the
special consideration of Secretary McCulloch
and to Congress- confident that each and all
will obtain much valuable information by
perusing it, as well as be able to better under
stand their duties in regard to the management
of the all-important question of finance.
The great point which Mr.. Stilwell presents
in the lecture referred to is the application Of
"the law Of supply and demand to the price of
gold" He holds that it is the foreign demand
for gold, and not the currency, which affects
the price of that article, and cites facts and
data within the comprehension of every per-
son to prove his position. The operation of
the Bank of England during that eventful
period in the history Of the English govern
ment from 1913 to 1921 is extensively referred
to, by way Of illustration, and the real cause
for the premium on gold during that period
pointed out. There are also several interesting
facts in regard to the power Of the Bank Of
England over gold and currency, and how that
power has been exercised, together with the
important consideration whether this country
shall hereafter remain financially subject to
the caprice of the managers of that bank or
control its own destiny in this respect The
declaration that the price of gold is governed
by the foreign demand is contrary to the posi-
ton held by the great bulk Of the writer's for
the press in this country. II has become the
stercotyped phrase of most Of our modern
financial writer's to attribute the premium on
gold TO the currency imitation, and that the
high price Of living arises from the same cause
But, really, do they not see the shadow instead
Of the substance! Suppose, for instance, that,
even with the present volume Of our currency,
we exported products raised in this country
sufficient to pay for all that we purchased
abroad and oil our indebtedness, then where
would be the demand for goldf Would moi
that alone reduce its price to par with ouI
currency! As Mr.. Stilwell very clearly shows
1--WE never have selied, and, until we become the
creditors Of all the business world, cannot rely
upon universal or exclusive specie money fol
our domestic trade, and we are often troubled
to produce specie enough for foreign demand
AS to the question whether the currency Il
so abundant as to initiate prices, the lecturer
holds that the same rule OF supply and de
mand" is the test. In other words, that thu
demand for money is shown by its marke
price. When money is plenty 1t will be cheap
or obtained at low interest; but when |
rules at high rate Of interest It Is scarce. Thi
broad view may not coincide with those Of tn
bankers and brokers, who see everytlhnI
relating TO the subject through Wal
! street glasses. u y the interest Of tina
class to keep up fluctuations. They ar
constantly trying TO effect q rise or fall,
matters not to them which, 80 that they max
their commissions. But it is the interest Of tn
government that safe and judicious system o
finance should be maintained that will operat
advantageously to the interests Of the entir
country, not to one locality, but to all, and will
encourage the development Of each and ever
section. No country Is blessed with so man
sources Of wealth as ours. Our climate IL VI
ried and the soil adapted 10 raising nearly q
the products known to the civilized world. W
have also an untold amount of mineral wealtl
But what does our rich soil, our extensive Goa
silver or gold veins amount to IL they renal
uncultivated and undevelopcdf II is the dut
of the Secretary of the Treasury and Congres
to look at this side of the picture when d,
Gliding their course upon the absorbing ques
ton Of finance for the future.
Those who are constantly demanding col
traction and return to specie payments as III
panacea for all our troubles, II seems TO u
fail to consider the effect Of our civil war upo
the labor and the products Of labor in thi
country. During the last four years million
Of men have been withdrawn from the prt
ducing class, and were not only consumers, br
destroyers. Manufacturing has been brisk
some localities, but instead Of turning out th'
which increased the wealth Of the nation the
made implements of warfare and perishabl
goods Instead OF adding 10 the wealth OF ID
country they increased the destructive capacit
Of the nation. The result has been th'
neither the supply nor the products Of labt
in The Industrial pursuits have been equ'
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