New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1867-12-13
HOARDLNG GOLD.


The amount of currency in circulation to-
day, with gold at 40, is considerably less than
it was two years ago when gold stood at 1%S,
and somewhat more than it was four years
ago, in the darkest hours of our war, when
cold stood at 800 These figures alone retute
the theory that in this country the price OIL
gold is determined mainly by the volume OF
the currency. In England, during the wars
with Napoleon, there were times when, under
a very considerable expansion OF the currency
gold bore no premium-but, on NapOleon's re-
turn from Elba, it leaped in a few days from
a nominal premium of three or four per cent up
to a premium Of 3l-neary rs high as 1t ever
attained Under the operation of the Berlin
Decree" and the "Orders in Council suS-
pending all commerce between Great britain
and Europe; within few days after Ma
poeon's defeat at Waterloo, it fell as suddenly
to nominal premium of three or four per cent.
No one can douht that, without tho addition of
dollar to our currency, il rebellion Of ten
States should again break ont gold would
mount again TO the neighbOrhOOd OF 300.
These facts show that the volume of currency
is at least a subordinate cause of the premium
on gold, and that the all-cOntrOlling influence
is the decline in the credit Of the Government
as represented by the value OF our Govern
ment bonds. The legal tender currency or de-
mand-promises of the Government stand in
the same relation to its bonds as the promissory
notes of an individual do to his bonds Both
are ON the same security, and rise and fall by
the operation of the same causes. If an iDdl-
vidual, owing more than he could pay, ana
whose notes and bonds were, therefore, selling
at a discount should commence by taking up
his short notes and paying them or CONSOLE
dating them into long loans, all would approve
his policy. And so far we have approved Mr.
McCull0chs policy of taking up all promises OF
the Government payable on demand. But IT
in addition he should accumulate n mass OF
gold, One-thTd as much us would be required
TO pay his demand notes, and, instead OF buy
ing them up at the cheapest rate, should allow
them still to go to protest, and sell at q heavy
discount. and if demonstrated with, should say
" this gold helps my credit more in my hands
ethan it would if / paid my debts with it," he
would be accounted a fnancier Of strange
order Mr.. McCulloch stands in the position Of
the insOlvent who, being unable to pay IN fun
boards all his income, puts it into magnificent
purse, and, when his creditors demand pay
ment shakes his money in their faces and
! saws, "Tme, my notes are ut discount OF AZ
! "per cent, but see what pile OF money have
g TO pay them with if j chose. III should
"pay You, you'd run my paper down from
ago to 60 or 20 per cent discount" Und0ubt-
edly. n reserve of specie is needed in coDncc-
tion with our finances but this is needed not
so much in the hands of the Government "a OF
fine communicable Banks. This might very
easily be effected by requiring the Banks to
deposit with the Government bonds to the gold
value Of a certain sum exceeding their cucua-
| ton, and to keep on hand reserve the gold
value of which wOuld bear certain definite
ratio to their deposits and discounts. This
would place the National Banking business on
a gold basis, cause the banks, who are The
proper representatives of the business cOmmu-
nifty, and who are solvent. TO have larger
gold reserve, and thus strengthen the business
OF the country, to which, and not to the Gov
eminent the gold of the country belongs.
Every step in the policy Of boarding gold has
been attended by a rise in price. Every heavy
disbursement of gold has been attended by a
fall in price. And yet the Secretary keeps
| locked up about one hundred and eleven
millions of dollars, which is probably about
half of all the gold in the country, and at
least sixty or seventy millions more than lac
needs TO supply any contingencies of accuing
gold Interest. None of this gold, as thus boarded,
is security for any part of our currency. 1t
! gives no aid or stability to our banking system
| or to the business community; it is utterly in
| capable of being utilized, and only enables the
| Secretary In cav IN his crpdifOra who are buy-
ing and selling his notes ct a discount which
increases as his hoard increases Behold how
| "sOlyent am How dare you sell my notes
at a discount If 1 catch you doing the thing
"too OutrageOusly, I'll come down upon you
when you least expect it, and pay off some Of
"these debts of mine ~