Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-07-02
CHEAP MONEY.
Some Facts for the DISCONTINUED
Why Money is Plentiful in Some
Places and Scarce In Others.


During the last session of Congress
enc q an most marked features of the
debates was ? constant reIteration of
The Statement that the business of the
country required more money. As a
matter Of fact, however, there has not
been time in many years when the
circulating medium which we call money
was more plentiful IN proportion to the
business which 1t IS required to do than
it has now been for some time. Yes
terday morning the rates for call loans
which we published IS having prevailed
on the street on Saturday, IN the face
of a rather buoyant stock market, were
only from two II three per cent. In
Chicago the daily papers remark a
greater case and lower rates-fiye end
six per cant,-in the money market than
have been known there in many years.
Nor IS this dizpropOrtion of supply
and demand In money peculiar to
our oyEn country. Ali the money CEN
tres of the world are heavily stocked
Indeed, Il is not too much to say that
they are overstocked, and that their
condition is by no means healthful.
The Bank of England rateis lower than
1t has been before N a long time-low-
or, i Is stated on good authority, than
It has been for ten years. France Is
the only. country where money eeH-
mands much more than nominal prce,
and this is due 10 the remarkably ener-
uet!c and sustained efforts which are
being made by the Bank Of France to
accumulate money enough to resume
specie payments. The demand thus
created, while It Is exceptional IN Its
purpose, Will also be temporary IN Its
effects. The general fact remains that
In all the places which money seeks,
and where money is sought, there is
a great deal more to be had than is
wanted,
The fact does not arise, as some of
our precious inancieTs IN Congress
seemed TO think it does, from any sud
den increase in the amount of money
in the world, That remains nearly the
same at ali times, and changes, tShen 1t
changes at alb very slowly and grad
ually, The thing which has altered In
the last year is the demand. 1t is i'm
possible to employ money as prohtably
now as it could be employed year
ago. And the reason of this Is that
the whole active commercial and pro
ducing world, Of which this country is
part has suddenly found out that its
production has outrun it necessities.
For, after all, commerce, IN its many
forms, is only the exchange between
men Of articles which enc has and the
other wants, and when the wants are
all messurably satisfied, while produc-
ton still goes ON, there is q cheek given
to exchanges. Rusine5s droops Just in
proportion as this process gains way,
and may at times, rs now, reach gen
eral stagnatiOn. AT such periods
money, as the medium by which eS-
changes are made, ceases 30 be IN de-
mand, and becomes as at this hioinent,
plenty"
In oar own country the discovery of
the excessive supply, as compared with
the demand, was sudden and accom-
panied by the severe panic of last fall.
In Austria, which is blessed with sew
eral of the same cuEtrivances for de-
feating the laws of trade that We en-
Joy, there was a similar though not so
severe a CONFUSION. In England and
in those parts Of the continent where
the currency IS recognized in the main
as an agency in business, and not as
possessing any wealth giving charac-
Ter, business men arrived at a knowl-
edge Of the real state OF their affairs by
a more gradual ard less disastrous
method.
Necessarily the immediate result of
the condition of things We have noted
is not pleasant. There has been a sur
plus Of production; the surplus must
be consumed before new demand and
new activity arise; and those who pos
sess little or none of the surplus VIII
be for a while with limited means to
supply their needs. Dull business, |
numbers, more or less great, out of en- |
ployment, and a general discomfort, are |
the first consequences of the causes we |
have recited. These we, in common |
with nearly the whole Of the CONNER /
cial world, are now experiencing. They 1
are generally followed by gradual re-
vivalof business, of which. with us, there
are already some signs. T h, accumu-
lated supply brings down prices; low
prices tempt to increased consumption;
the surplus disappears, and production
is again called for. The moment this
can be resumedproftably 1t will be re-
sumed, for nothing is more impatient
than idle capital. In some branches Of
industry production must begin with
reduced wages, to meet the lowerpr;ees,
which advance but slowly. But once
production becomes fairly profitable.
wages will be raised And this viii be
the course which things viii take with
us. The money plethora is BY its nature
q condition Of affairs that tends con.
Stantly to pass away While it lasts
prudence and patience are particularly
necessary, but discouragement is by no
means justified. !