The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-01-13
TIE SEE.sAW OF PRICES.

Curious Facts and Stntisti, 1861, 1868 md
lS6S-Ilow the Geld Market Affects the
Grocery Trnde-Comments and Suggestions.
So long as gold remains the measure OF comm ercia
values just so long every uctuaton gold from what
cause but affect the price Of all
commodities OF trade, and just long tho equation
between gold and all articles OF table consumption
viz, dollar In gold equals the dollars value In
breadstuf matter what may be the price Of bread
stufs In paper currency-wiI continue to disturb the
market In this os the anomaly Of the present eondi
tion OF business. Gold which has long since ceased TO
perform the functions OF . currency and H. In fact
quite Incapable OF performing such functions has been
been manufactured ideally into sort Of Pro-
crustean bed, TO the Dimensions OF which bust
ness is to BIO shortened or lengthened accord
ingly may suit the whms Of the managers OF tho
gold market. Between commercial values and their
recognized representative in paper therefore, regu
laor has been Introduced which Is far irregular
in its fluctuations than either OF elements which Il
intended to regulate and OF causeless fluctuations
tho market is key to have moro than enough, 30 long
attempt Ii kept up to regulate that with third
element which Is. sef.regulang, viz, the rela-
ton between commodities and the recognized circulating
which Is antiqnated, ought govern all other values
has been for the past two years. the great disturbing
element OF business, and cannot long DO maintained
Under the old banking system which had its basis a
tho credit OF small corporations, as an ideal upon
which all circulation was founded, gold . neces-
sity, because convertbility in small
necessity account Of the limited and neces-
sariiy unstable credit OF banking associations
medium OF universally recognized value into which
tho notes OF q banking corporation could at the
will OF the holder be converted was under the old sys-
ten, therefore, quite essential Beyond certain limits
the notes Of banker, really representing his credit
were OF no value and, in passing from one state to
another, every person was compelled TO provide him
self with money OF known and generally recognized
value Thus. and as . matter Of convenience, convert
bity under tho State banking system absolute
necessity for no other reason than that the paper cur
OF the period not based upon credit every
where known and universally recognized, but upon q
system OF small credits only known and recognized
within their circle II liz useless to argue against It
sole necessity for q medium into which notes In small
should be convertible ~ the will Of the holder and,
an ideal basis OF paper. arose, under the
old financial system, from the limited and
often doubtful and unstable credit upon which that
paper founded and OF which II the representa-
the necessity for such ideal basis ceased TO exist With
paper therefore, based upon government credit there
is no moro need that gold should be made the ideal
basis Of circulating medium than there that gold
Itself should DO based upon real estate values The
whole theory thereupon founded Is simply logical fa.
lacya relic Of old and panic ucing system OF
turbant OF . new and stable financial system. From
1860 1870 may, therefore, be reckoned as transition
Is not needed ideal basis OF paper issued
upon government credit, just 90 certainly American
financial economists will work themselves clear Of
notion that Ia needed, and will take up reduce
which American financial economy Will DO here
after based Nor will than Q couple OF years OF
economists thlnkng and when that thinking begins the
nances Of the United states will DO safe trade and
nnauce will begin 10 their direct and normal
relations TO eacn other
few tables OF observation for the past years
will be sufficient " demonstrate tho very minute man.
usr with which gold fluctuations have affected the cur.
rent cost Of commodities The subjoned table exhibits
the yearly rise aud fall Of gold a. compared with