North Iowa times. [volume] (McGregor, Iowa) 1867-current, 1870-07-27
Business and Credit Affected by the

Business and Credit Affected by the
War.
The decline in American bonds and
the advances in gold in our money mar
kets, in consequence of the European
war, form one of the problems that is
presented to inquiring minds. Some
find it difficult to understand why a
foreign war, even if it should engage
all the powers of Europe, would depre-
ciate American credit, for the fall in
the price of bonds and greenbacks is
an evidence of such depreciation. 1t
is easy to understand why the bonds of
the nations engaged in the war, and of
those who may become embroiled like
England, should suffer; but there is no
apparent reason why the credit of ma
ton should suffer which cannot, in any
probable emergency, become a party
to the struggle, even if it should in
volve all Europe. The causes, howev-
err, of the disarangement of our fnan-
ces is not very remote one, and their
discovery docs not require any very
profound investi cation.
In the first place, the war enlists the
sympathies of all the capitalists of
each nation, on behalf of their own
governments. Their respective mon
archs are all in the markets as borrow
ers. This sympathy is patriotic one,
and it is also based upon a very obvi-
Gus calculation that national success
will bring financial prosperity, and dis
aster will bring financial reverses.
They are, therefore, more disposed to
lend money to their own governments
than to retain investments in the bonds
of foreign nation to which they are
indifferent. The depreciation Of the
bonds of their own governments also
affords an opportunity for better invest
ments. The capitalists of Europe who
have held American bonds, are, there
fore, selling out as rapidly as possible,
that their means may become available
for the purchase of their own national
bonds. Prussian holders are. selling
United States 5-20s to procure money
that they can loan to Bismark, and
French holders are. selling out that
they may procure money to lend to
Louis Napoleon. English consels have
also fallen, and English bondholders
are selling in order to buy consols at
the low selling prices now prevailing.
This accounts for our bonds being sent
home in such great quantities, and for
the lower price at which they are sell
ing. ~
Another influence operating in the
same direction is the disposition for
boarding money, which is stimulated
in war and other troublous times. Men
of small capital are always disposed in
these times of falling credits and of
general excitement and uncertainty, to
rid themselves of investments and to
procure specie which they hoard away
and take out of circulation. This pro-
duces, to certain extent, a scarcity of
specie and consequent depreciation of
all kinds of credits.
Another reason is that war times and
other times of great excitement, are
the harvest of the vast bodies of specu-
lators and gamblers who abound in all
countries. The readiest objects of spec
ulation are deprecated credits, and in
every market and all places of exchange,
the spectators are engaged in clearing"
bonds they Systematically attack public
credit, and prey upon the popular dis
trcss. The very tendency of all great
excitements and dangers is to shake
confidence in everything but the solid
gold everything fuctuates and depre-
ciates but that, and those absolute
necessaries of life which only gold can
command.
1t is not possible that gold in our
market can greatly advance; for there
will be no unbounded imitation of our
currency, and our breadstuffs after har-
vest will be necessary to the contending
European powers, who can only procure
them for gold. The foreign market for
cotton, however, will be limited, as the
of the nations engaged in
war will be depressed. Gold may reach
100; but any advance beyond that must
be purely fictitious and speculative; and
not very permanent-St Paul Pioneer,
July 23rd.