Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-07-02
CHEAP MONEY.
Some Facts for the Discontinued
why Money Is Plentiful i'm Some
Places and Scarce in Others.

During the last session of Congress
one of the most marked features Of the
debates was a constant reiteration of
the statement that the business of the
country required more money. As a
matter Of fact, hOw.yer there has not
been a 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 as having prevailed
on the street on Saturday, in the face
of rather buoyant stock market, were
only from two to three per cent. In
Chicago the daily papers remark a
greater ease and lower rates-five and
six per cent.-in the money market than
have been known there in many years.
Nor is this disproportion of supply
and demand In money peculiar to
our own country. All the money CEN
tres of the world are heavily stocked.
Indeed, it 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
it has been before in a long time-lOw-
er, it Is stated on good authority. than
it has been for ten years. France Is
the only country where money COM
mands,much more than nominal price,
and this is due To the remarkably ener-
getic 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. viii also be temporary III its
effects. The general fact remains that
in all the places which money seeks,
ana where money is sought, there Is
4 great deal more to be had than IS
wanted.
The fact does not arise, as some Of
our precious financiers in Congress
seemed to think It does, from any SUD
den increase in the amount Of money
III the world. That remains nearly the
same at ali times, and changes, when 1t
changes ut all, 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 1t 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
a part. has suddenly found out that Its
production has OutTun 1t necessities.
For. after all, commerce, N its many
forms. is only the exchange between
men of articles which one has and the
other wants. and when the wants are
all measUrably satisfied, while pTOduc-
! ton still goes on, there Is check given
to exchanges. Business droOps Just IN
proportion as this process gains way,
and may at times, as now, reach gen
eral stagnation. At such periods
money. as the medium by which ex-
! changes are made. ceases to be IN de-
mand. and becomes, as at this moment,
plenty
In our 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 contrivances for de-
feating the laws Of trade that We en-
| iov. 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 and 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 will
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
are generally followed by a gradual re-
! yiyal of business, Of which, with us, there
are already some signs. The 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 resumed proftably it 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 lowerprices,
which advance but slowly. But once
production becomes fairly profitable.
wages will be raised. And this viii be
the course which things will take with
us. The money plethora is by its nature
a condition Of affairs that tends con-
stantly to pass away. While 1t lasts
prudence and patience are particularly
necessary. but discoura cement is by no
means justified.