Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1865-12-17

a. 80
the perusaI, it so richly repays. IL Is a luhi.-
. mons abstract OF our fiscal condition, and per-
!. hans from the time Of Albert Galatin, mere has
: appeared IN the United States, no financial
, statement, so replete witt wise suggestion. We
believe, we cannot minister more aeceptaoiy 70
our readers generally, than by employing some
Of the capitaI features OF this paper, As themes
and Offering in future articles, such eommenta-
ries on them, as shall indicate the driit OF M
McCuIoch's policy. Embracing As 1t does, the
, collective prosperity OF the country the suolsc'
Is one, which challenges an earnest enofI IN
depreciation
Although according the main tuition OF TINS
Report. a full and hearty endorsement, 1t yet
incuIcates a few points OF doctrine, which aP-
pear TO US, in conflict with the teachings OF a
iust political economy. Astronomer inform
US. that there are spots on the sun, and there
fore 1t can be no reproach 10 a merely human
intelligence. that It's disc IS not entirely free
nom Opaque notes. Borne away by the cur
rent Of a great Thought obviously true In alits
principal relations, Mr.. McCulhoch Is led into a
compulsory treatment Of certain principles IN
order that they might contribute to the progress
OF the general idea. We offer for scrutiny IN
the present article, an example OF this apparent
coercion.
In the outset OF his argument, advocating q
contraction Of currency he says;
Itfsa well established fact, which has not
escaped the attention Of all intelligent ooserf-
ers- that the demand for money increases (Dy
reason Of an advance Of prices with the supply
and that this demand IS not unirequehLy t6e
pressing when the volume Of currency Is the
largest, and imitation has reached me eulm CUM
mating point Money being an unpf9HtaDLe
article 70 hold, very little Is Wlthheid IIoM
active use. and in proportion TO its increase
prices advance; on the other hand, a reduction
OF il reduces prices, and a. prices are reduced
I the Haunnna Fnr 81 falls nHs ~ LnfN. DATAAQAAAdA
as 1t may seem, a elimination of the currency
may in TACT increase the supply OF IT,.
This argument proceeds on the assumption
that there Is in money, no necessary cores
pondency, in demand, and supply. II utterly
Ignores the operation Of that curtailment Of
supply, from which, and from which alone the
reduction OF demand must ultimately arise. II
is true, that the decline in demand, flows inlnie-
diately, from a declension Of value, in articles OF
merchandise; but It is equally true, that the
latter hows just as Immediately, from a redue-
ton Of supply in money. The demand is cur
tailed, Mr.. McCulIoch states, because prices de-
cline; but the capacity for supply, is at the
same time diminished, because its previous vol
ume has been reduced. And by 50 much, II
would seem, and no more, as this volume Is re-
duced. is the demand for money impaired. a
reduced circulation depresses prices, and de-
pressed prices impair demand. One, Is the log
zeal complement Of the other, and hence, in the
immediate consequences, which accrue from
contraction, there appears to be no good reason,
why tie bulk OF supply, should not accurately
measure the sum otdemand. In the ascending
scale, Mr.. McCuIIoch comedies this 10 obtain,
! for he acknowledges, that as the circulation eX-
pands, demand e~nlarges; and eliminates only,
| when currency has attained its highest degree
Of diffusion. II demand thus keeps such per
feet steps with supply, in the career Of expan-
sion. what is the element, which disturbs this
relation, when the reign OF contraction begins?
| Is there in Finance, a latent principle Of inver-
sion, which arises in a spirit OF anttthesis, to
illustrate the march OF reduction? Unless
there should be, we cannot perceive, why the
principles which actuate its onward, should not
equally prescribe its retrograde movement
Nj. McCuloeh claims however, that such an
inversion Of principle may arise, and that a re-
duction Of supply, may actually increase the
supply.
Let US state the matter more cOncretely, and
see how it looks. Let Us suppose the currency
OF a country, to be hundred million and for the
sake Of argument, that It is suddenly reducedto
fifty million. II left undlsturbed, TO obey the
usuaIlaws of political economy, the result
. would be, that prices would fall to halftheir pre-
vious dimensions, and currency would rise TO
double its former value. The demand for money,
sympathizing with the fall in prices, and con-
forming to the argument Of the Secretary,
would decline to half its original volume.
But simultaneously with all this, we discover
that supply has been shorn Of half its capacity
to relieve. The reduced demand, in other
words, can seek for satisfaction, only at a re-
duced source Of supply. A demand, subdued
to half its wants, confronted by a supply,
=rrFn,aN Of half its ability "a rive does not an
pear more favorably related, than when each
exhibited, its most imposing magnitude.
A further example, perhaps, will more clearly
illustrate this point A credit system prevails,
more or less generally, throughout the United
states. Suppose, that in accordance with this
system, the country, and other retail merchants
purchase goods at the present tariff Of prices.
and agree 10 pay for them, in four months time.
They In the meantime, dispose Of them TO their
customers, on similar terms. Let Us suppose,
farther, that before the payments are due, one
half OF the circulation is retired. Bearing in
mind, that this hypothesis would represent, not
uujustly, the general aspect Of trade, under
such a state Of things, what influence upon the
money market, would probably result from II?
The merchants, when the day Of payment ar
rived, could only present as assets, the what
ever portion OF goods they had on hand, sthalf
their cost value, and the obligations Of their
debtors, for goods already sold A demand for
money would instantly arise, upon the part OF
the merchants, 10 pay their creditors, and upon
the part of their debtors, 10 pay them. Does
this look, as though a fan Of prices, would ne
cessarily impair the demand for money! And
where could this demand appeal for relief
Only OF course, to the currency in circulation,
which we have Just seen, is impoverished OF
half its capacity TO supply. II is difficult to im-
agine then, how a contraction, may, under the
workings Of the ordinary laws.of finance, en-
large the supply Of money.
ItisnOtdesigned by anything which has been
here preferred, TO impeach the wisdom of Mr..
McCuuoeh's general policy but simply to indf-
cate, that however admirable in the main, il is
yet not a psnacea FOR all the evils, which may
be contingent to Its application.
Exchange
New York Time continues to be scarce, and
save in the way of mutual accommodation be-
tween bankers, and even that on a moderate
basis, it is dlfficult to obtain. In the face Of this
threatening situation, the previous quotations
maintain themselves with admirable hardi-
hood. In the transactions reported to US, the
buying rate is stin quoted at a per cent. dis
count, and the selling, at = per cent. premium
The tone Of New Orleans Time, is about the
same as yesterday. Offers are liberal enough.
but the demand continues to be duh, and conf
placent. Only trihing operations have arisen,
in consequence, at the previous discount OF =
per cent.
The holders OF New York Time would seem to
be sfronted, at the repulsive g~reetingthey have
met for some time past. Very little is now Of
Aring in the market, aud even that, is not
cheerfully received. The rates however, man |
age 10 preserve their former figures. We there
fore quote Five-day bills at \ on, Ten-days at !
=, Fineen-days at 1 per cent, and Thirty-days
at ~ per cent, off, The improved temper
which was observed yesterday in New Orleans |
Time, haslost nothing Of its .sanguine quality. |
It has net sufficiently ripened however, as to
form the basis Of an appreciated tariff. Opera
tons are reported to US to-day, at advanced
amounts, but not above the rates of yesterday.
We therefore renew its Fiye-day bills at I per
cent, OF, Ten-days at II, F~ifteen-days at u,
and Thirty-day bills at ? per cent, sE
Loans.
We are authorized 10 announce to-day, for
the first time in a considerable while, that the
demand for money is mild, composed, and even
indolent. The auency Of It's current is some
what stagnated perhaps, by the cold weather,
which is now imparting a crystalized aspect to
all nature. The discount movement is conse-
quently dull, at former quotations. Prime
FIye-days paper continues at a of, Ten-days at
y, F~ifteen-days at 4, and Thirty days paper at
/ per cent. OF.
City Scrip.
Memphis Is in a situation TO congratulate
itself to-day, upon the purchase Of one small
lot Of City Scrip, at IS, and the sale OF an equally
small lot, at 90.
stocks.
Mr. McCulloch is respectfully advised, thar a
modest operation in Seven-thirties took place
to-day, at IS cents, with accrued interest.
Gold ana stIyer.
No appreciable increase is observed. in the
activity which Gold exhibited on yesterday,
although ii shows some Improvement ia rates.
Intelligence from New York, reports It ad-
vaneed to 464, which has reacted hayorsbly
upon the quotations here. We therefore place
its buying rate at 45, and its selling, at a.
I silver NavnaHna Fn ,--. - ~