Gold Hill daily news. [volume] (Gold Hill, N.T. [Nev.]) 1863-1882, 1865-03-31
The Effect Of the Appreciation Of tho
Currency.

OuEICMcys
The Alta says: The operation of the
appreciation of the United States currency
upon outstanding obligations is likely to
be very serious at the East, and its in
fuence here will not be altogether unfelt.
The last official report of the public debt,
February 18th, embraced 1886, 900 of
adjusted but unsatis6ed accounts. A
considerable proportion of these unpaid
creditors are contractors and others who
have been compelled to borrow of banks
and others, to keep along until they were
paid. This operation of withholding pay
ment and thus compelling borrowing has
been one of the agencies in producing the
decline in gold, or an appreciation of pa
per, by which the debtor is compelled to
pay in medium much dearer than that
in which he borrowed. The operation is
to enhance fifty per cent. all outstanding
debts, and, of course, to ruin those who
have bought on credit. The government
contractors who get fixed amount of
money reap great profit on untitled con-
tracts in consequence of the fall in prices,
being the reverse of the operation which
ruined SO many last year when the
prices rose rapidly and contractors
could not meet their engagements. The
general effect of the decline in prices is to
promote the consumption of goods which
have been sparingly purchased during the
rise, and it also smothers production, be-
cause people do not willingly manufac-
ture when the prospect is of falling prices,
when there is little chance of getting "a
new dollar for an old one" By this
double operation the supplies of goods
are diminished, and the foundation laid
for strong rise when the scarcity begins
to manifest itself. The goods which were
bought at the East at the highest paper
prices, and sent here for sale in gold, to
be RENTED for in currency, realize now
rs per cent. less than they did in January
to the shipper. In some cases, however,
owing to the lessened supplies, caused
partly by the increased indisposition to
ship hither, the prices have risen here in
comparative degree. This is the case with
pork, lard, some descriptions of dry goods,
etc. For similar reason, the importations
of goods at the East have been small from
Europe, and manufacturing less, except
under special contracts from the Govern
nent at fixed prices. Where these exist the
decline in raw materials largely swells the
profits of the operators. Where goods are
made for the open market, dependant for
profit on the possible value of the medium
at future period, the disposition to man
ufacture is less, except among those who
deem the continued appreciation of the
currency not probable and who speculate
on its decline. These evils result from the
unstable currency. But heretofore goods
have not declined when the price of gold
has fallen. The reaction has usually been
too rapid to admit of it. In February,
1868, gold was It's, and prices rose to a
corresponding level, always higher, pro-
portionately, than gold. In July, of the
same year, gold fell to 100, but prices Of
merchandise did not follow. The reaction
set in, and gold rose, with more or less
steadiness, to 2S5@29O in July, 1864. 1t
has since been falling to l60, accompanied
by fall in prices. There exists now, in
dependent of military and political causes,
all the elements of reaction in the value
of the currency, in consequence of the con-
ditions it has itself created.