The Charleston daily news. [volume] (Charleston, S.C.) 1865-1873, 1870-10-20
OUR FINANCIAL FUTURE.
HOW the War in Europe will Affect us.

From Ile Philadelphia Record, October 1o.1
The influence which the European war Is
destined to exercise in future upon United
States securities, is matter to us Of vital con-
Sequence. One of the belllgerents is a large
creditor of ours, perhaps our largest credi-
tor. The rapid recovery of government bonds
from their sharp decline during the panic at
first caused BY the declaration OF war, mas
been accepted as an irrefragable proof that
American credit Is beyond suspicion. The
Interpretation is o just one, but we should
not. however, be blind to the fact that our
debt Is q question of money-and OF real
money. Nothing but produce or coin will settle
this debt, unless bankruptcy should prove the
solvent. A momentary panic may effect the
but it makes neither nation or an individual
solvent or insolvent. Solvency is simply a
question of assets beyond liabilities. It was on
account of last years commercial balances
against us that England was enabled to draw
from us thirty millions OF dollars IN coin at the
beginning of the present war. The shipments
for the present have ceased, not because thir-
ty.tWo millions cancelled all her claims, but
because OF the large influx Of money from the
Continent of Europe to London created by the
war and the fear that other nations would be-
come involved In the contest This influx has
been so great that the rate Of interest has gone
down in London from six per cent. to two and
".
and half per cent. In the open market. This
accumulation of money has rendered neces-
sary for the present the collection of the bal
ance due by us, which draws comparatively
large interest.
Moreover, this plethora Of money has so
stimulated the money making Instincts Of the
London bankers that they have placed large
amounts Of sixty day credits on the New York
market at rates which yield them ten to twelve
per cent. per annum interest. These credits
not money-have enabled the manufacturers
Of England to place larger quantity Of their
fabrics on the American market than ever be-
fore in the same space of time. By pursuing
this policy.toward our manufacturing industry,
aide1by our unwise legislation, they have sue
cessfuly accomplished the destruction of Amer
ican commerce, and now would DESTROY Amer.
lean manufactures. But these credits have
paid no debt. They operate simply as post
ponement or an extension of the time
Of payment, and when due, they can and pro-
baby will be renewed, so long as the foreign
deposits are allowed to remain in London; but
the moment a prolongation Of the war makes
it necessary for Prussia to ask for another loan,
or the moment that peace shall make the re-
call of these deposits necessary for business,
America must resume her shipments of coin,
because our chief creditors England and Ger
many-wil have need for it. We say nothing
OF France, for she has cut loose from coin as
the measure Of value, is and now so over
whelmed with debt, and has been so devastat-
ed, that her only resource will be repetition
of the paper money assignats of 1870.
1t is clear, therefore, that the real financial
issues Of the European war are vet to be felt
in our country, because it has beea prosecuted
On a credit; and credit that negotiates no
paper does not affect the market When the
settlement of the expenses of the war already
incurred arrives, we must be prepared to
meet promptly, in coin or produce, at least the
~ = r,Au holA ohr
rether with the balance of our commercial In
debtedness; for these countries will have 10
face their own liabilities and expenses and
cannot be investors. The aggregate Of our In
terest and commercial Indebtedness for the
last fiscal year was $3.50, 100000. This year
with the large decline in cotton and other pro.
ducts, certainly causing diminution of not
less than 500. .0oo, 900 in our exports, and the
LARGELY Increased imports, which are indeed,
mucN greater than ever before, we have pre-,
sented to us no pleasant prospect, but rather
foreboding financial future.