The New York herald., 1871-12-29
WHAT CAUSES TEE FALL In GOLD?
10 TIE EDITOR OF THE HERALp:-


On the meeting OF Congress the same old state.
ments and allegations have been made about gold
aud currency that we have seen periodically for
more than eight years; aud while Congress shall
commune IN session all business men in our country
nave reason to fear that something Will DO done to
injure. II not destroy the widespread confidence In
our m0ncyed system and the solvency Of our mer-
chants. mechanics ana banks.
Al the risk OF repeating an oft told tale we will
inquire what has recently produced fall In the
pr1ce OF golds Will any Congressman answer this
question? Wul any pr0Iesscd fnaucier or editor
give US plain and unequiyocatlng response
to this question: Have bank credits been
curtaiieds Have grecnbacKs or bank notes
boen Withdrawn and destroyed! Has any change
taken place over all this broad territory or the
Union that has enhanced the value OF greenbacks
and bank notesf VINO will affirm that any or all
these causes have depressed the price OF geld IT.
then. these causes have not done It, why shall we
have further legislation on tho subject? Who does
not know that the foreign demand and the hoard
ing ct Custom nIuse arc the sole causes OF the
fluctuations In the price or golda supply ANA de.
maid control the price, This demand comes di-
rect nom these two causes and from no other.
Those causes must continue to operate as long as
tho laws OF trade are In force and the Custom House
requires gold for dulies. What. then, produces
fait In the price Of gold? We answer, tine law OF
supply ana demand. There 10 no demand
trom our banks and merchants. Gold Is
nos IN demand for our domestic trades.
tits not required for any inland commercial pur-
pore; therefore Il has nothing whatever to do with
inland exchange Consequently, a. individual,
bank and other domestic credits do not call for
gold the price Of gold exercises no influence upon
the price OF greenback, bank note or lndividuai
credit Then what does operate upon the supply
and demand connected with gOdr We answer, the
balance OF trade. When the Secretary OF the
Treasury makes o credit In Europe Dy selling our
bonds there exchange Is sold IN our Market and
Sxchange on Europe Is gold par. Therefore, II the
mppy OF sucn exchange Is In excess OF tho de-
nand, the price Of gold falls In the same proper
We know that our wke Secretary and the en-
bodted wisdom OF our nation In Congress have, by
ingenious Devices been striving for several years TO
that this s uDiortnna,e % oiors has been partially Tally
successful; we know that our people have been and
are very active IN selling railroad ana other bonds
An Europe, and VIC know that since the entr?lte
Cordlale by the Treaty Of Washington, has been
concluded with England that English capitalists
navo and are turning their attention to various
OBJECTS for investments here THESE causes
navo thrown and are throwing large
Nabe supply exceeds the demand anu gold falls In
price. Tnls s the cause that Is reducing the price
operate, aud we shall ultimately leel the reaction
arr encct We ElnSt remember tnat ali these causes
eSs sss sa qc N, N Erae upon wS
tho foreigner buys bonds o. railroads. banks. cor
pOrottoaS states, citiej A0., or mines and other
property fOr reyenue-where the interest OF income
Il sont 10 EurOpe-it Is yearly burden, because II
creates constantly increasing demand Tor gold, or
the produce OF our country that Is marketable
abroad, 70 pay this enormous and increasing TAX
ppOn industry.
Now, what remedy for .wrath against the day OF
WRATH do our wise men oficr the Country7 They
say, 60 on, transfer our deots TO foreign holders;
make the annual payment Of interest to Europe as
large ~ you can; thus increase the demand upon
for gold; let the balance OF trade take care Of
itself. And they say all Will be WE'LL whether we
have q demand, as now, for sixty millions ia gold
per annum for 6xporl, or increase that demand to
bne hundred millions, which, Ia proportion 10 our
increasing debt In Europe, must soon be the case.
They wish 10 declare Dy law tnat We shall make
Counferacttng demand AT nome from our l,70o
banks and inland exchange and compel all paper
the supply ana demand for gold. Ohi teplp0rd I
OH nSO,esl the logic or men and the logic OF
events must como into fearful collision, debtor
and creditor country can no more rest upon
the same plain tnan individual debtors and creditors
ooid gravtates TO the creditor Suppose these sales
Of credits shall depress the price OF gold TO par or
below, how long would THIS conhnuef SO long as
thcs0 saios continue ana no longer. When these
sales Of credit shall decrease tncn gold will again
advance These sales OF credit have sensioly
phecged the export OF nour and reduction OF gold
10 par viii stop tne export OF produce until gold
shah again rise to ll0 or IL on on. market.
The par Of gold II stagnation and depression
premium OF twelve per cent is activity and pros.
to control the laws Of trade by acts Of legislation
We can bankrupt the country, but we cannot super.
y JONATHAN OLDBUCK