Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1870-07-22
FINANCE AND TRADE.
ONION Or TIE DAILY APEnkEl

TIE EFFECT OF THE WAR UPON THE
BUSINESS AND coMMERCEoF THE UNITED
STAIRS -1-
ON the 18th, 10th and 10th inst. we ex-
pressed in plain words what we thought
would be the effect Of the European war
upon the business and m Of the
United states. We have since made X
tracts from leading papers supporting our
opinions, all of which are now being verb
fed in the recovering tone of the Liver
pool cotton market as telegraphed to us
Yesterday, and in The general 'qook up
which is manifesting itself in our "
country. A fuller and better ampli6ed
than any of the views OF our contempora-
ries, We present this morning, in fnrther
support Of our position, the following
from the New York HorId's money arti-
Gle of the 10th, answering the question:
"What will be the effect on American in
terests resulting from war in Europe?"
A calm consideration of the subject
will Show thai wsr in Europe will be in
every way highly beneficial 20 the United
States. The first result in Europe, and
10 some extent here, il panic among
mOnoy-lenders n panic among the
spsculatiVe holders Of securities dealt IN
on the leading bOurses OF Europe and
fhis country. The mOney-lender at the
name Of war calls in MS oans. He wants
10 sea his money in his own possession,
not because he has any special need for
&C, nui in order to see whether by calling
in his loans he cannot obtain a higher
prize for his money on ~relending, or
whether he cannot force his borrowers 20
sell their cOllaterals at q sacrifice, SO that
lie NAV buy them and obtain bargains
I'll 40 a.n1u zach Tina GnnanNaNnFa M I
securities on the mere mention Of war, as
seen in the New York stock market last
Monday and during the week, sell what
ever securities they hold, ana in addition
thereto as much more or perhaps a great
deal more for ashOrtn account, in the
hope OF realizing a profit in the rapid de-
cline Of prices which they work hard TO
bring about by selling short and talk
Ing panic. They rely on the cO-opera-
ton of the mOney-lender and The con-
fused condition Of mems minds az such
4 season to produce a feeling Of distrust
favorable to their schemes Tor spreading
panic, dEstrust and low prices. short
time. however, always sUf1ices to clean
Out Of the market the weak timid
holders Of securities. This last week has
illustrated this Tesn3ae, as the results OF
war in Europe on our own STOCK tx
change, Since Monday last the weak
holders ana timid holders of securities
LLA q AEE bA4 e1AAA 81 49, -EA1N 49, - 4
addition thereto three or four times the
amount has bsen forced on the market at
low prices by the speculative chronic
"bears" and their friends. During a sea-
son OF panic like this last week, both here
and in Europe, the only buyers are capt.
tslists and those with ample means.
What may be called margin" men, or
professional stock-gsmblers, generally
weak in pocket and still more weak in
mind, always sell and nevcI buy during
a season of panic like that of this last
week here and in Europe. The only
buyers al such seasons are the shrewd,
experienced, far-sesing, solid capitalists
and men Of means. The "scum" of the
stock markets are always the sellers in q
usuic like that of this week, and the
solid portion are the buyers. The solid
men buy, because they have the means
TO hold. and they know by all past expe-
rience that the lowest prices are always
made when the public mind is agitated by
= feeling of panic, and when low prices
aae engineered by weak and timid specu-
lators.
These are the first results of the panic
consequent on the war in Europe. Then
comes the second sober thought as re-
cards ourselves and American interests.
WHY should the war III Europe cause a
decline in prices on the New York Stock
Exchange? The answer Of the "bearsD is,
because It will make money tight"
They point to the CTimean war as an IL
Illustration. In the Crimean war our
banks were doing business with gold coin
As the tandard for lawful money. The
export Of gold coin during the Crimean
war was a loss of lawful money" to the
banks. Specie exports forced them to
contract their loans. This is all changed I
now. The passage of the legal-tender act
worked a radical revolution in our money
markets. For example, the specie eX-
.-aa LE Ii v-a.n- 80 81 IA DE~ aml --rN
IL the face Of this heavy draw our banks
have increased their loans S7,593, S9I.
During the Crlmean war, or If our banks
we're on a specie basis, they could not
only not have increased their loans ST.
a93. Sol with specie exports Of s., T40, 267,
but they would rave been compelled to
contract their loans at least :, 100000 In
other words, If our banks had been on a
specie basis this last week with the decla-
ration Of war in Europe, and specie eK-
ports OF 81. 74O, 267, thou they would have
been forced to cali in At least 50, 900, eco Of I
loans, instead of granting new loans Of
u ,2y3. s9l. In plain terms, on a specie :
basis the community would ave had !
Sl2,O0O,U o TO Sl3,000,OJO less in loans
from the banks than they nave now on
the greenbacE basis. Panic and a ruin
Gus decline in prices would have been in
eviJable on a specie basis this last week.
The great mistake that the professional {
hE1AM AhlAb II III fOAAoululAk hab / =
deemable paper money with specie re- I
deemlng times. They lack knowledge
are well meaning but ignorant, and lose 3
money. In ir~redeenable paper money !
times, shipments Of gold ACT precisely on ]
our money market like shipments of cot =
ton, grain, tobacco, or any other produce. 9
Gold shipments nov, like grain ship 1
Iments, supply our banks with money. a
They make money easier by transfer Q
ring foreign floating capital TO American j
account. Europe pays cash for and be- Z
comes the owner Of American products g
IN gold, grain, or cotton. The United I
STATES become the owners of European d
cash in exchange for gold and grain. The 2
New York banks hold, by this weeks
statement, SI, ls5, 6S8 Of specie. On June
-, they heli S2S,ZS $50; on April %, S25,-
5lO.SZ2 Il is plain hat our banks could :
ship $lG,OOO,0OOof gold coin with great ad- :
vantage az the present time, because this {
would then give the United States about
SIC, 100000 Of Lawful money to use as their
own instead of foreigners. In April, :
when The New York banks held SIS, O00,- !
90 gold, or Sl6.0 QUO, 600 less than this week, :
the price of gold was about ll3. On June :
., when they held SIS, 900, 900, the price
was lIIH 10 ll2. 1t is plain from these
ngures showing that gold was Ill to ll3, \
about sI6, 900. 600 less gold in the B
banks, that the shipment of SIC, 900. 900 \
gold, leaving the stock in the bank about S
The same as in June and April, would be J
ne reason Tor any advance in Its price.
The exports of grain are much more
advantageous TO American interests than \
The shipment Of so much cotton. Grain
will not keep like cotton. It spoils, and
loses weight in store. A large surplus of
grain brings dow prices of the whole !,
market, 50 thai Western farmers, with L
IN excessive crop and surplus carried u
over from the preceding year, realize q
80 w-s-a--H- - -
their debts and they ci.nnot even az ~
lord TO pay for the shipments of the grain u
over the railroads. II would pay them x
better TO destroy the surplus If they could. !.
Instead Of destroying the surplus grain y
% keep prices from being ~ruinously low, =
great must be the national gain in IL
when we can expOrt IL at a high
price as we are doing now? Under such o.
= condition Of our foreign trade, pros =
perity and a large increase in the national "
wealth bscome assured facts. Our sgri-
cultural and railroad interests gain great p
whereby. u
War in Europe. therefore. will enrich
he United States enormously by enabling
Is TO sell 20 foreigners at a high price the M
.wo products-g0ld and grain-which are II
IF no earthly use in this country except
10 lock up large sums of money 70 IL
AIRY them. The export Of these two use
ess commodities, as FAR as u own use is Is
concerned, Wis gold and our surplus n
rrain, will relieve our banksfrom carrying
heavy line Of loans on them, and will al
make our money markets easier by ex- \
at higher prices these useless
PRODUCTS for European cash. The national
wealth will be increased by the exports of
,old and grain at high prices and our
money markets will be made easier. Wa
n Europe is prosperity TO the United Ia
,tates. 81
As to the return Of Government bonds Ia
o the United States in consequences Of q
var, il has become evident yesterday and il
o-dav, from the action Of the shrewdest q