, 1870-05-05
MONETARY AND C0AllIERCilL.
MONETARY.

WEDNESDAY EVENING, Mny 4.
During the past three weeks there has been
q marked disposition, on the part OF banks and
other financial Institutions, to invest in gov
e1nment bonds, which has resulted IN = largo
advance in price, particularly in tho 5--oe o.
die Of Arsil is about So cents, which is partly
accounted for by an advance in London Of av
eraee X cent, and an advance OF per cent
in the price of gold from IN average
Of 11s1< to l4}}zz. These two items
would make nearly per cent, leaving about
1}< cents that prices haEo advanced N Amnf'-
can markets over md above tho advance IN
foreign markets and in the price of gold It
is pia1n that this condition OF things can not
continue, and that prices in home and foreign
markets will be equalized by decline in one
or an advance in the other. II American mar
keta were as well supplied With bonds as
wear ago, 1t would be reasonable to expect the
eoualization would be made by decline here
but it must be borne in mind that not only las
there been continuous flow Of bonds IN ex-
roYtation to Europe during the past three or
four years and up to very recently, but the put-
chases of tho Treasury have been very large,
and it is estimated that BY the last OF ynne a me
total purchases Will amount to 50,OO0,o00, or
about 10 per cent Of the total amount OF the
20 bonds in existence. It IS well known that
tbo esport Of bonds, during last fall and the
first three months Of this year, was enormous,
aud it ia not improbable that, IN the Mteen
months from the time the present at1minlstra.
ton came into Office, until tho last Of next
June. an amount Of $40 honds equal
to 80 per cent Of all that are
in existence will have been permanently
withdrawn from American markets. There is
a financial necessity for scme such securities
rs the present government bonds as invest
mcnts for trust funds, and for the surplus
money of banks and other financial iustttu-
tons, and, as the demand for these purposes
steadily increases in proportion to the Increase
of population and business, it il not sulpEis-
ing that this demand, in connection with the
steady depletion of the stock on tho market
from the causes above mentioned, should
bring matters to point where tho home de-
mand ehou1d not only make a large advance in
the value of 5-20s, but that it should control
Tic foreign markets instead of them controlling
the markets Of this country, IS has haretotore
been the case. II such q turning point should
be reached during the next two or three
months, it could not fail to have somo re-
uprknble effects On finances in general. One
OF these would be that the supply Of bonds
for expectation being cut OIL, sterling exchange
would experience large advance. and causo
heavy exports Of gold. Under such q condi-
lion of tbiucs it seems not improbable tlat
we might for time experience tho anomaly OF
The gold ya1ne OF bonds advancing at the same
hn0 that the price Of gold advanced At Al!
events, the cutting or OF tho export supply OF
$50 bonds is likely to mako commot1on IN
financial sffairs that VIII revolutonize many
neople's ideas on the subject. .....
Tic following table will sho" tho currency
md pold prices of government bonds on the
2d Of May, this year, as compared with May l,
Inst yetf.