Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1872-12-18
FINANCIAL MATTERS.

The United States Economist New
York; has this explanation as 10 why
money is scarce and dear: The stringepcy
in money which is now q chief feature of
all the financial centres in the United
States, may be partly attributed to pure
business causes, such as the general distri-
button of currency consequent on the active
movements Of cotton; the necessities Ofthe
pork packing season; the outstanding &C
counts of the fall trade which still remain
unsettled, and the necessary preparation Of
businessmen and firms to meet their bal
ances at the New Years settlements, which
are now rapidly approaching. To these
causes may be added the policy of the Sc
eretary of the Treasury, who is understood
TO be recalling the balances of the deposit
recently entrusted to certain New York
banks to prevent financial crash. Then
again, the uncertainty induced by the prob
able retirement Of Secretary Boutwell, from
the control Of the Treasury, invol7ing5a
modification, If not a complete change, In
the policy Of the last few years, make Rp
combination of causes which sufficiently
account for the hardening process now evil
dent in monetary operations. The none
tary strinsency in Europe, and the excep-
tionally high rates of interest charged by
the Bank of England, also contributed TO
the production of similar condition of af-
fairs on this side of the Atlantic, though to
a lesser degree, perhaps, than is generally
supposed. The fact is that American d
nances are being gradually released from
the dependence on the foreign markets that
has heretofore prevailed, and this tendency
is more likely 10 increase than diminish.
The London Times recently called atten'
ton to this fact, and admitted that the ad-
vance in the Bank of England rates, so far
rs it was intended to draw coin from the
United States, partially failed to accomplish
that object. So far as our foreign trade is
now concerned, it msy be regarded aS in
healthier condition than at any period since
the close e orr civil var. No doubt the
large expo s OF cotton contributed in no
slight degree TO change the outward flow of
gold, and the increase in our grain exports
also helped to produce the same effect.
But from whatever causes, it is apparent
that our money market has lost its extreme
sensitiveness to every variation Of the Lon-
don markets, and if our currency were in a
sound condition we would no doubt be in q
still more favorable position. But SO long
as we retain our Prese 1t inconvertible cur
rency, so long will gold be demonetized and
flow outward, in the place Of inward. But
we derive the incidental advantage from
the unhealthy state of our currency that it
promotes the speedy liquidation of our for
eign Indebtedness, by stimulating gold eX-
ports. But this Is a result for which our
financial legislators are entitled 10 / o credit,
as the benefits derived are very far from
being Occasioned by their sSgacity. The
monetary crisis in Europe hes therefore
produced comparatively little effect on the
American money markets, and the causes
OF the stTingeDcy, as before stated, must be
looked for nearer home. The probabilities
now are that there will be no return of
ease and low rates for money before the
new year. Tbs outstanding accounts of
the year will then be balanced, and money
will become easy. Not less than hun
dred millions Of dollars will then be dis
bursed in this city alone in payment Of div
idends on the public debt and BY our rail
road, banking and other corporations, eX-
elusive of the far greater sum that will be
disbursed in settlement of private accounts.
The same corditiOn of affairs will prevail
in Boston, Philadelphia, Chicago, Cincin-
nsti, st. Louis, New Orleans, and all the
business centres. Business men and cor
porations who have anything to pay ct that
p9riod, and all are mora or less indebted,
naturally desire to keep down their liabili
ties and keep their means well in hand.
But this situation of affairs need not In
spire any special alarm. 1t is just what &C.
ours every year st this time, though per
haps not always to the same degree as at
present, The ordeal is unpleasant, and
produces sensible depression of general
business. But iG will continue only few
weeks longer, and then we may expect
complete reversal of the present situation,
a- cool borrowers will then be enabled to
dictate tier own 'erms to persons who have
money to lend.