The New York herald., 1867-02-07
FINANCIAL THEORIES.


minds OF our people that the standard Of value not
money-gold silver or paper-but the great law OF sup
ply and demand and while II ID admitted Q rule in
market overt in all branches OF trade theorists wiz
not apply the law to money One Of your correspond
ents Mr. Ingot admits its controlling power but in bis
argument ignores IL entirely The abundance scarcity
Of mossy known by the rate Of interest VIII yield
In our great market Docs any ono doubt thisf this
be Co. where else can We hnd standard that 90 adjusts
itself to the trade and business Of the countryf We
could know how much wheat will b grown and sold;
how many hogs cattle &c. will be raised and sent 10
market; how large quantity Of material will be manu-
factured and running down through all tho business
and Of u the Sosn then so~S s1 ssSs S
found In nxod amount OF circulation; but tho system
y only Procrustean bed whore the body must BE-
STRETCHED cr the limb Topped Oh % suit the caprice OF
By allowing money 70 conform to this great Law no
hsrvess o9 ntsrsst IfI oIsns, there wsi bs great
dearh in their pooketa The money lender is thus put
upon the level Of every branch OF business and subject
by this great law X. the fluctuations OF trade.
This great law Of supply and demand should also DO
applied 70 everything exported and imported. when
by the rate OF price oe exchange when vs send moro
or export more In vaie than We import the premium on
snssaSge rises n our favor and ws ar: enabled 70 buy
pened that gold has been brought from Europs 70 equal
iae the trade exchangea Now We have imported more
have amounted 70; and although We sending moro
than sixty millions Of our gold abroad and large
or our merchants continue 30 large that exchsngs s
now thirty six per cent above par and in favor OF
Europe This high premium FOR exchange necessitates
the purchase and shipment Of gold. as the great
haustive demand Is from Europe This demand fixes or
makes the prico In our city.
that people afraid OF coined paper they will
the people here at home overbd the shippers or
he ueoue Of our
paper the gold be easily bought by paying fraction
over tho prices paid by the exchange dealers Is this
plain enough TO be understood2 Are not all bills Of
exchange Europe drawn by good houses at premium
Of thrtysix per cent and Is not gold at premium Of
thrty-six per cent? AS there Is demand here and
there is demand for shipment, does 1t appear plain
that the premium gold Is ruled and governed by the
export price, Again. you know that every auctnation
in the prce OF gold from hundred and eighty to one
hundred and thrtysix has been and is in exact
formi'y with the prce OF exchange on Europe.
You will see hen that the facts presented establish
beyond all question that the premium exchange
trolls the price Of gold we'll tho price Of exporabe
articles and all imported goods
In this connection wish 70 call the attention of
hard money people to the question presented in fer
mer communication, and which remains unanswered.
sYou well remember that gold selling for $50
the Secretary has than doubled currency and
In the face Of his making currency 30 rapidly the price
.: Gr Se Rer
par by contraction ~hen It falls 90 rapidly by expan-
son'" This plain, practical question that demands
down the price Of gold City per cent. how much will
contraction bring It DOWN. WIN the Tribune Times or
ErprctS answer tntS question IOr the SoCT0tdIyT
am still anxious to have this question q supply and
demand applied % exchange answered. so that the peo
give Gin E S M se
MIR. Knickerbocker Getting FriGhtencd MT the
Prospect.
TO THE EDITOR OF THE HERALD.
We should glance ss the situation OF thngs before
treating Of the remedies and policy proposed ana
relied BY the rulers and before suggesting
anothor course Of measures We owe vast debt The
amount Of NATIONAL STATE municipal and corporate obli
gatons transferable end sxporable may BE- 81 down
. four thousand mtiions about slX or s12o
70 svey individual Of the enrs population Or $500 70
each II the States In revolt and ill elsewhere who own
property and pay taxes dedicted me yearly
interest this debt average Of nix per cont
hundred and forty mionA Our debt 70 foreign nations
represented sy national State and other public oblsa-
uons may DO set down q one thousand millionA and
yearly interest In gold u sixty millions THIS swsis
debs In these forms - ave thousand mions and the
yearly interest 10 three hundred millions exceed
ing the amount Of the surplus products yearly which
can export, or for which there s market In other
countYiea
Our imports noludng entries q under valuations and
smuggiing) exceed and have for number Of years
oceded. exports including specie. hundred 10
two hundred millions or moro yearly
ports with its prontG Ship building and many Other
extensive and important branches Of industry are
pended Tho annual taxes for Interest on our national
bonds amounts 70 about lao millions and the other n
tona expenditure esdes interest and principal q the
ss % Ss S IL, 4 Sssa
70 800 millions for interest. above estimated makes
100 millions Of annual payments % b earned. cotlscssd
Following the high price Of gold, q commodity Of
export. and assuming thai its eqnvaient the PAPER
value, the prices Of imported articles Of exporabe
products and Of all other things labor rents rates Of
interest," high ss TO cause alarm for the future
to import annually about two hundred millions At gold
valuaon to pay duties enough gold discharge the
the exports for the current year win Be inadequate =
pay for that amount II we import twice that amount
We must send specie or further amount Of bonds II
they can be sold and thus increase the debt
The muddle s fast working towards crsis-on which
need not expata,e further than TO suggest that
for Immediate consumptios one hundred millions 70 two
hundred millions more than its export Of annual pro-
PAY on snS poc1
generally relied onS Arc they TO prevent IN amount OF
imports exceeding tho amount Of our exports, or 70
stop the export Of national coin which account
Of It's circulation and ts relation under existing laws 10
the paper legalizcd - money s an absolute and rst
is unspeakaby moro injurious 70 The nation than the er
port OF the tools and implements Of every kind Of abor
for these individuals could replace By making new ones
not rcpace Nothing In this direction Ii proposed Our
commercial policy, which dictated and managed by
Great Britain to allow imports I'm their ships far
As possbIe) of foreign merchandise without STINT and
to keep on exporting coin and paying all balances in god
and silver At par This win keep In check and render
US as powerless and dependent as with the assistance
Of their ruling classes tho rebellion aimed and hoped
to do.
The chief remedy proposed and rolled on In the pres
ent aspect and situation Of affairs Ia the resumption
Of specie payment that currency Of uniform and
safo paper may regain It's lost value and gold
lose in fictitious premium and both circulate
alike and according TO law ~ legal money.
Being deeply In debt both to foreigners and
at home, and having exported nearly all our coin;
and after i've years Of suspension OF specie PAYMENTS
what may happen, II with the gravity proper in SUCH
proposed a. timely and effecual souton OF the
whole problem that we reracs steps and return to
specie payments decide and Ak on the day whom
will take that important STEP.
which hnders proposal 10 resume 1t ones. We do
Il - efectuay now - eighteen months or hvs years
hence ct any time hereafter that be named True
coin has long been Of circulation, transferred