Daily union and American. [volume] (Nashville, Tenn.) 1865-1866, 1866-05-25
Anion and Smfrifau.
SPECIFICATIONS UPON THE ENGLISH
FINANCIAL PANIC.
From the Cincinnati Gazette

From the Cincinnati Gazette.
This occurrence, in a time Of general pros
perity in England, is one of the monetary
phenomena which, although they may be
philosophically explained after the event.
are continually surprising the most cxpe-
rienced and sagacious. In the reports that
have reached us il is attributed TO the de-
precautions in the English funds, in railway
and foreign speculations, and in cotton and
cotton goods and iron. OF ldese items only
the decline in the English funds can be
charged 10 the threatening aspect of affairs
on the continent and this has been but
slight, and could not have touched any but
the lighter class of SPECTATORS. The fall in
American securities had a relief in ship
ment 10 America at profit.
The decline in cotton and cotton goods
has been heavy That on iron is lighter,
more gradual and more distributed, and
should naturally correct itself by a CORES
ponding decline in the cost of production.
As TO English and foreign railway invest
ments, there has been nothing TO disturb
them but action and reaction Of speculation.
In general phrase the crisis will be charged
10 oyertrading which gives no distinct idea
Of the cause, for overtrading is only an eff
feet. 1t is more important TO us to consider
the probable effect of this English panic on
American monetary affairs.
The first effect is already seen in the fall
ing off in the English demand for our bonds,
in their actual return home, and in the ship
ment of coin TO pay for them and for our
trade balances. This movement is enhanced
by the unnatural conditions Of our currency.
A redundant currency gives high currency
price for our bonds; cheap coin enables the
f.,-o,r-,, I,llar 90 lee IN, OF n
The more we cheaper gold the more We
stimulate its export 10 a dearer market
The process will continue until it appreciates
here TO its value in the foreign market, or
until a sufficient amount shall have been
shipped TO restore the monetary equilibrium
and the shipment of bonds
The Secretary Of the Treasury is engaged
in the hazardous experiment of keeping
down the price of gold by sales from the
Treasury TO supply the demand for this for
eign shipment, 50 that it shall not cause
rise here in the currency value Of gold. In
brief. he is stimulating its export by cheap
ening It's price. Whatever success is posi-
BILE in this experiment depends on the Trea-
sury purse being long enough TO supply the
foreign demand, and TO ease up money affairs
abroad, and create n reaction there that
shall renew the export Of our bonds, and
thus stop the demand for gold before his
supply is exhausted.
If the experiment succeeds in this, it will
have supplied Europe with gold at a cheap
rate, 20 ease up its monetary affairs. If the
drain should continue so long as TO exhaust
the Secretary's gold purse before bringing
the reaction, the price of gold will rebound
from the bottom Of the Treasury vaults, until
its appreciation here shall check the export;
and the result will be a greater disturbance
Of values and public credit after the Secre-
tary shall have lost the Treasury gold and
the premium on il by his cheap sales.
IL was not the depreciation ofgold 10 near
the nominal value of our redundant cur
rency that appreciated the public credit, ex-
cept in the matter of the currency loans.
The improvement of the public credit by the
triumph of the North over the rebellion, and
by our improved revenues caused ship
ment Of bonds which deprecated gold
Financiers have mistaken the effect for the
cause, and have supposed chat by suppli-
menting this movement with sales Of gold
from the Treasury, TO force its price lower,
they were improving the public credit. Ii
only furnished cheap gold 10 pay duties on
imports, and cheap exchange TO pay for for
eign goods. And as il did not correspond
ingly cheaper the price of production at
home, il enormously stimulated imports, 10
the detriment of home industry.
i; furnished a market of paper money, in
Hated 10 more than three times the ordinary
volume for foreign goods, and furnished the
importer with gold TO pay for them and the
duties at only 25 or 80 per cent. higher than
the value Of this inflated currency. In pro-
portion as il deprecated gold it reduced the
price Of our export staples without any cor
responding reduction in the cost of the labor
and materials of production. 1t showed off
our magnificent store Of cotton, at prices
only % or 80 per cent. higher in this tripled
currency than in gold. And as we have
mentioned above, it cheapens gold, and en-
ables the foreign holder Of our bonds TO re-
alize AT a large profit ON his investment
made when the relations between coin and
currency were different, and ship the gold
out Of the country.
80 far as these abnormal relations be-
tween a deprecated currency and gold have
been aided by our own financial tinkering,
they have been for the benefit of foreign
capitalists aud manufacturers, at the expense
of this country. These operations are more
suitable for the speculative operator than
for the public finances. The Government
has merely deprecated its gold revenues by
as nuch as it has reduced the price of gold,
and has in the same ratio deprecated the
value of our exports. The unnatural con-
ditions have caused loss TO the trade and
propuction Of the country that will APP
proXimate TO the amount Of the public
revenue.
The disuse of money for domestic ex-
changes by the substitution Of legal tender
notes, and great foreign demand for our
bonds that sprung up on the end of the re-
bellion, furnishing large part of the means
for paying foreign balance, left gold without
any commercial use, and deprecated il in
the face of near thousand millions of ir-
redeemable currency. The operation was
unprecedented, and it perplexed many who
regarded gold the standard of value. The
resumption of one part of It's natural use in
paying exchanges, brings natural causes
again in operation. The other operations
have given such an apparent success 20 the
tinkering of values, that we are not in
clined TO prophecy whether the presen;
effort 10 manipulate them will succeed. Its
failure after sacrificing the treasury coin
and is Just premium, would be disastrous,
and n heavy modification.