Nashville union and dispatch. [volume] (Nashville, Tenn.) 1866-1868, 1868-01-17
THE SEE.SAW OF PRICES.

The Gold standard EaIIaey-GOid not
aG PreseIif Standard for the Ex-
change OF Vaiues-Itis Is alone a SUBJ
iect Of SpecnIafson-What Is the
Standard e-An Interesting View OF
the Matter.
From the New York Herald. Jan. IS.
So long as gold remains the measure of
commercial values, just so long every fine
tnation in gold, from whatever cause, can
notbut affect the current price of all COM
modities of trade, and just so long the
equation betaeen Hald and all articles Of
table consumption-vlz one dollar ingold
equals the dollars value in breadstufs, no
matter what may be the price of bread
siufis in paper cnrrency-will continue to
disturb the market. In this lies the anom-
aly of the present condition Of business.
Gold, which has long since ceased to per.
form the functions of currency, and is, in
fact, quite incapable of performing such
functions, has been erected into sort of
ideal meter of all values-has been manu-
factured ideally into sort of Procrustean
bed, TO the dimensions of which business
is to be shortened or heightened accord.
ingly as may suit the whims of the mans
ayers of the gold market. Between COM
mercial values and their recognized repre-
sentative in paper, therefore, regulator
has been introduced, which is far more
irregular in its fluctuations than either of
the elements which it is intended to regu-
late; and of causeless fluctuations the mar
ket is likely TO have more than
enough, so long as an attempt is
kept up to regulate that which a third
element which is, per sc, self-regulating,
viz the relation between commodities and
the recognized circulating medium of the
country. The notion that the gold value,
which is antiquated, ought TO govern all
other values, has been for the past two
years, the great disturbing element of busi-
ness, and cannot long be maintained. I'm
der the old banking system, which had its
basis in the credit of small corporations, "a
an ideal upon which all circulation was
founded, gold was a necessity, because con-
vertibility in small sums was necessity on
account of the limited and necessarily un-
stable credit of banking associations A
medium of universally recognized value
into which the notes of banking corpora
tion could, at the will of the holder, be
converted was, under the old system, there
fore, 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 himself with money
of known and generally recognized value.
Thus, and as a matter of convenience, corl-
vertibility was, under the State banking
system, an absolute necessity, for no other
reason than that the paper currency
of the period was not based upon a credit
everywhere known and universally recog-
nized, but upon a system of small credits
only known and recognized within their
circle. 1t ia useless TO argue against it
the sole necessity for ne,'inla infa hich
notes in small Euma rauVesls-
tlset DC vii az the J ! III ssl lsssa As1iisnt
ly, the sole necessity for the use 81 gold az
an ideal basis of paper, arose, under the
old financial system, from the limited and
often doubtful and unstable credit upon
which that paper was founded and of which
it was the representative, and, with the in
suguration of the present system, the ne.
necessity for such ideal basis ceased to ex.
ist. With a paper, therefore, based upon
government credit, there is no more need
that gold should be made the ideal basis of
the circulating medium than there is that
gold itself should be based upon real es.
tate values. The whole theory thereupon
founded is simply logical fallacy-a relic
of an old and panicinducing system of
paper issuance, engrsfted upon and acting
as the perturbant OF a new and stable finan.
cial system. From 1860 to 1870 may,
therefore, be reckoned as transition pc,
riod in financial economy; for Just as GER
tainly as gold is not needed as an ideal
basis OF paper as now issued upon govern,
ment credit, just so certainly American
financial economists will work themselves
clear of the notion that it is needed, and
will take mp and reduce to philosophical
system the true principles upon which
American financial economy will be here
after based. Nor will more than a couple
of years of anomalous financial maneuver-
ing be needed to set economists thinking /;
and when that thinking begins the finances
Of the United States will be safe, and trade
and finance will begin TO reassume their
direct and normal relations to each other.