, 1873-06-17
MUNET ANU VUM EWE hCE
MONETARY.


ntock on hnnd in this city. II, Bny, 100000
bushels of tho corn that has boon accumulating
l,ero had boon kort in tho country warehouses,
prices would haye bcen much better sustained,
and tho whole surplus Of tho Wost could havo
boon worked of during tho summon at much
lighor average price. It Is not impossible, how
ever, that the railroads. may do for tho forming
community what tho farmers hayo failed to do
for themselves. It Is thought In Home quarters
that, III ordor to ronder tho now Rsilrond law
which goes into effect July 1-obnoxlous, tho
railroads will comply with 1t to the let
ter, and will charge local ratoa In
stead Of through ratcs ior tlio transportation Of
grain acrosy this State. Should this be done, 1t
grain from tho West to tho East, md there would
be q speculative rise in prices in this and the
Eabtorn marksta.
Money in tho local market Ia abundant.
Now York exchange WIS sold botWcon banks
oAusEs or FLUCTUATIONS IN TIE rnroE OF GOLD.
Gold declined to-day to 115N, which is ~ nor r
last ten days. So large. a decline In so short
time naturally suggests tho old query ngan, VIZ:
Docs tho yalue OF gold change, fuotunsfng nke
that ot other oo,nmotsos in a. accordance y ,3 With
us Of tito currency. that ductuates :
II anything had happened during tho past ten
days to greatly improve the credit OF the Gov
GfEm0uE, hlu consequently A!oApaoo sao tf4Ao
Of lis promises to pay, most persons would have
said ut onco TINT 1t wna tho currency that fluo-
tuatea, and That in this instance It hid risen IN
proportion 10 tho improgomont Of tho national
transpirod to affect tho credit Of the Govern
mous; It standa just about aa It did ton days
or two weeks ago, whom gold waa 118}1, and tho
total volume of grecnbaeks wcro r: worth nearly
people will, therefore, take tho Other yicw Of
tho oase in the present instance, and say
thut il ia tho value Of gold that
Inns decllnod; that becauso the Bank Of
interest to @ per cont, and thus shown that 1t ia
not 30 anxious o customer for gold, tho yaltlo OF
tho gold az D commodity hns declined In accord
nnce with tho Diminished demand; thia Woro
prices Of ali commodities for which gold ia OF:
changed, and tho values Of which aro measured
by gold should riHc, ~ It is quito evident that
deereaao In tho demand tor go could not also
moditioH But thoro has boen no corresponding
rise inthe prices Of other commodities. On
tho contrary, there has been gradual
decline In tho pricoH Of most agricultural PRO
in this country and In Europe, for aome months
past. It Is apparent then, BY this test, TINT the
theory Of decline in tho value Of gold as .
t. not sonaa na 70 moit see Ss
no as compared with Grecnbacks.
We think clue to the solution Of this problem
may bo found In tho rise and fall Of sterling ox-
sngo on ss5ps nnn4 so 6F 6s
there in invariably an outflow Of specie from tho
United Statos to Europe. When exchange is be-
low tho specie shipping point, there is no outflow
Of specie, and tho constant product Of cur m1noB
accunlu1ates in this country.
Gold and silver arc tho money OF tho COM
norcial world. Therefore It follows that, when
tho export Of tho precious metals falls below tile
purront rate of their production IN this country,
" Hrr Tim
commerce. ..
But 30 do not use this universal money. We
havo fictitious money Of pnper, the volume OF
which III fixed and cannot legally be increased or
diminished in any way to roprosent tie natural
fluctuations OF tho volume Of real money Which
lilo mutations Of the balance Of foreign trade
would |oayo in this country. It is obvious that
ut times We must have more and sometimes loss
money as the result Of our traffic IN commodities
with foreign countries. But the volume Of paper
money III this country is fixed at about
e7oo,oOo,ooo, aud cannot DO changed to
possible Indication of the dooseaso Or inorease
Of money In this country is IN tho appreciation
or depreciation Of tho h1ed volume Of paper
ton Of tho riae or fal Of the price Of gold under
such circumstances Us the present, when it can
not bo traced directly to anJ change in the credit
Of tho Government. whose promises to pay con-
Btitute the basis Of our currency.
Thoao who attompt to maintain that tho yalue
OF gold GuctunteB like that OF othor commodi-
ties, would, perhaps, eay that tho accumulation
in this country Of gold and silver, which are use
caused depreciation in their value, and that tic
decline in the currency price Of gold was tho
measure Of this depreciation. But the error Of
this argument ia apparent from tho fact that it
this country to Europe, aud that at tho first In
dcation Of q real depreciation in the value ol
gold in this country appro1imatlng ! per cent be.
low its value iu foreign countries, It would In
slantly DO exported in an enormous volume that
would quickly equsllze values.
1t is, therefore, conclusive that, unless q do
cline in the currency price Of gold in tlis coull-
try indicatos general decline III Its value
gold does not change to any approclabla extent
and that in NIL fluctuations Of the currency price
Of gold it is tho ualac Of the paper currency thu
changes.
Tho arguments statod above arc sustained BY
the present situation ~ regard to gold. During
the past two months the exports OF domestic
products, othor than specie, have beon unusual
lylargo. We have boon paying for foreign com:
not in gold, honco We lavo been accommodating
money, and tho effect OF this for q month pas
has boon to chock tho rise in gold. But another
cause operating in tho Same direction, and show
ing it's effcct much more quickly, has been a
work in the past wook: Ten days ago, when Il
seemed that the efforts Of the Bank Of England
would be directed to making money tight in Lon
don, in order to draw specie into it's vaults, the
American agencies and correspondents Of for
eign tanks wore obliged to pay up 1oans made
them by tho foreign houBes. This obliged for
elgn bankers in Now York to be buyers Of sterling
exchange, and advanced the price. In short
thoy wore remltting credit to Europe at rata
that would Hoon have drawn tho specie after it
The prospect Of an outflow Of specie put up the
price Of real money-gold In other words, Il
appreciated the value Of greonbacks In tho sams
way that the prosIoct OF stringenoy would ad
vance the rate OF interest aud doprecIaso tht
value Of commercial papor. When the Bank 0!
England reduced it's ratio OF interest last Friday
to por cent, and the prospect Of an artilcia
stringenoy in London disappeared, tho forsigt
bankors were no longer buyers Of sterling e1
tho Value Of gold, or, moro correctly, We shoult
eay, tho price OF greonbaoka advanced, 80 tim
tho aggregate value OF tho whole volume 0
puper currency would moro correctly ropreaeu
The volume Of rcul money in the country.
LOCAL sTocK AND noNp MAnKHT.