The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1873-10-01
gOIIJNIiH ,'ly..,.
Wednesday Morning, October /. 1878.
VIII Currency E1p.nsion Injure enc
~, a. 8outhf -

win curreney nap.n.,on. Injuro enc
southf
Whe.hs- The expansion c: :he cs-.
renoy, BY the issue OF United States
legal tender notes, in consequence of
the panic. will be sufficient to affect the
value OF the currency, is not deter
mined. snpposing, however, thar the
issues will be sufficient to oheapen the pa
per urrency of the United States, what
erect will that have as mere currency
question on the people Of the South? {?
As general rule, the oheapening OF the
currenoysis favorable,to debtors and in
juriors to creditors. 1t the currency is
cheapened by expansion the debtor gets
more OF il for the profits of his indus
try, to pay his debts. An agricultural.
for instance. bringing his produce to
market. finds that specie is the cur
rency, and he sells it for 500; but sup
pose paper is legal tender currency, and
is twenty.three per cent. cheaper than
gold, he will get $3.50 for his produce;
and with this carrsncy paying his debts.
he gains $50, and his creditor loses $50.
The oreditor3with the $3.50, will be
able to buyjwith it only as much as 500
purchased" before. Let Us apply this
principle to the people OF the South,
andto their great staple, cotton. The
price OF this commodity muct be deter
mined by the great law OF oil trade-the
supply and demand; and where thu de.
man6 is greatest, there the price will
mainly be determined. In the United
States. before the war, it was computed
that 60O.0 900 bags OF cotton were con-
sumed in our manufactures. There was
last year consumed in bales of 400
pounds weight. in New England, $780,
.16O bales. The exports to foreign ports
"were. 2. $50, 996 bales. The whole amo cunt
of cotton consumed in England and the
continent OF Europe, in 1912. was
about Is. 100000 bales; in the United
States. !, ,137, $40 bales. 1t is plain, from
this statement, that the demand in the
United States cannot determine the
price OF cotton. The foreign demand
chiefly determines it.
In all the foreign countries, where
there is demand for our cotton, specie |
is the currency. Their purchasers come
hera with their currency, either in boxes
of specie. or with drafts on New York
or other countries of commerce in the
United States, to pay specie, which is
equivalent to specie. When they come
here, however. they and that specie is
not the currency OF the United States,
but that it is paper; and consists of
legal tender or bank notes. say twenty.
three per cent. below the value of specie.
" WHhAssdo they do? They can buy cotton
either with their specie or the paper
currency. If they use specie. they may
pay, for instance. 800 for. bag Of cot
ton; but.if they use the paper currency,
it is the same thing to them. changing
the"specie into paper to pay Sl30 They,
OF course. in the prices they offer for
cotton, are not governed by the demand
for it in t.e United States, but by the
greater demand in Europe There is
the chief competition for our cotton.
and there this competition determines
it.. The general effect of any deprecia-
ton OF the paper currency OF the
United States in consequence OF the
prevailing panic, may raise the nominal
price of cotton in the United States;
but it will not raise the specie price,
which must be gauged by the demand,
chiefly foreign. But the nominal price
will be that by which the trade in cot
ton in the Southern States will be car
ried on. The planter, therefore, will
get higher price for his cotton, ex-
actly in proportion to the depreciation
CT the currency. If he has to pay
debts with its sales, he will have more
money in the depreciated paper to pay
them with. But if he is creditor, or
an annuitant, or rejoioes in salary, or
has contracts to complete, it will then
Affect him ininr;opo1v THO ,yL r,1a