The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-05-18
FINANCIAL and COMMERCIAL.
The Currency QuesliOn-A Letter from Ex-
Secretary McCullOch.
REVIEW OF THE WEEK.
Imports and Exports-A Good
Bank Statement.
THE MOVEMENT OF GOLD ABROAD.
WALL STREET,

WALL STREET, /
SUNDAY, May II, 1874.
The principal financial event during the past
week is the passage by the Senate OF what Is
known as the Currency bill. We have already
shown that this bin is Objectionable. In connec-
ton with the subject we find in a London journal
. letter from ex-Secretary OF the Treasury Hon.
Hugh McCulloch, in which he emphatically de-
MES that his policy OF contraction disturbed our
money market He says:-
When oHa#
a THE POLICY OF CONTRACTION
was commenced, and was being pursued 1t was
necessary for me to institute measures for iundlng
The noating debt short date obligations) OF the
g0ver nment, at that time amounting TO nearly
$1,000, COO OOO IN addition TO legal tender notes in
circulation. which measures could not have been
successfully carried out If the money market were
really disturbed bJ conWactlon II became, there
ofe, necessars o nn ~ on Tue , no
the money market and the result OF my obserya-
lions was that contraction did not paralyze or d.
minlsh industry, not affect njuriously the money
market. IL was not the realized effect OF contrac-
tion, but an unwlse and unIounded apprehension
OF Its future effects, that raised the clamor
against IL which resulted in the peal OF the laws
authorizing 1t. My policy, OF course was not TO
reduce the real money oil the country. but TO
APPRECIATE THE VALUE OF TIE CURRENCY
IN circulation BY reducing the volume. Ny convic.
zion at the time was GEAR and decided, and this
CONVICTION has been Confirmed by subsequent OBJ
servat1on. that the only way back to specie pay
ments was oy reducing the circulation until the
lar in coin; and have no doubt, II this policy had
mot been interrupted by repeal OF the law, that
the specie standard would before this nave been
restored, without disturbance to a healthy money
market or prejudice TO the productive interests OF
the country. The President has done himself great
credit and the nation great service by withholding
his signature from the Currency bill.
After such language as the foregoing Mr.. McCul-
loeb will scarcely lend his sanction to the pending
ol which, instead OF reducing, proposes to aug
ment the volume OF currency and put US further
away from specie payments than ever. For ts
must not be forgotten that the bank notes retain
AL their legal tender functions, ana Congress has
no more constitutional right to authorize an addl-
ton TO their sum while they possess this equiva-
lent relationship TO legal tenders than it has to
issue another $l00, ooo 900 Of greenbacks.
THE FOREIGN MARKET.
While there are no important changes to be
noted in connection with the value OF American
securities abroad, there Is o condition OF affairs
on the other side OF the Atlantic which in
measure explains the recent shipments Of gold
from this country and accounts for the rise in the
Bank OF England rates OF discount TO per cent
France is preparing the way for a return TO specie
payments The strain OF these payments Is nat
urally thrown upon the Bank OF England, not in
fullest measure, it Is true. but indirectly. The
gain OF bullion by France since the 1st OF January,
1874, has been than s12, 800 00o-an income OF
vast amount is being boarded for specific pur-
pose, IT follows that being Withdrawn from the
ned OF foreign exchanges in which the precious
metals may be required, England was compelled
70 resort to the usual policy OF self protection that
attends
DRA1s UPON THE ExcHEeUER.
1t is said. however, that this large sum has been
gently and carefully taken. and not In manner to
annoy the market; and that the Bank OF France
fnr1 MO i-a draf RI
rs TO raise the value OF money very high, because
perturbation tigntness OF tue money market
would materially aggravate the difficulties OF
return TO specie payments. A further advance or
the English Bank rate Is therefore not expected in
the near future, trade being duh and the export OF
gold to Germany being suspended. The latter was
the disturbing cause last year. A large sum Is also
now due to England on American account. We note
among the Items OF financial interest that the
London Stock Exchange has recently been seized
with speculative mania In Peruvian and Egyptian
securities, the former having advanced since
April T. 1874, Il and Is per cent and the latter
~ per cent.
EXPORTS AND IMPORTS.
The foreign commerce OF the port for the week
was:-Genera, merchandise imports, including
dry goods. $7523 500; produce exports, 454 3s7,
and specie exports $2,665336. The total mer-
chandise imports including dry goods since jan
nary this year are $l5s, $50, 0S2, against SILL.
l59,44o last year. and 74s In 1872 The
total exportsof produce since January are $780,
700 2o4 against Slon64o,53s last year, and $77l59.
l35 In 1872. The total exports OF specie since
January are s15,so4e GA, against SO, 800 last
year, and $4,000, 49, in 1877
THE MoSEY MARKET.
Although money on cali loans during the week
was exceptionally quoted at and per cent the
prevailing rates have been on the basis OF 8 and
per cent, with more capital offering than could
ind nse. Plethoric banks are very sure sign 0f
business stagDaton. The discount market was
easier and prime commercial paper passed al a
6h per cent. Sterling exchange advanced to the
highest point OF the season, and permitted the
shipment OF gold with slight pro1t. TIE close,
however, was heavy The business IN exchange
has been comparatively dull. OWING 70 the dimln-
ished trade OF importers and to the comparative
ease OF money or the other side, which induces
manufacturers 10 allow their accounts 20 run, pro-
vded they receive interest on their balances
THE GOLD MARKET
has been sluggish, notwithstanding an outflow
from the country exceeding s2,o00o00. The two
extremes OF the week were my and 1922. The
following were the fluctuations -
OPEN LoD-
mo. Highest. est CLOSING.
Monday, May ll.... ll2n I2H Il2X il2ls
TUESDAY May H.. n23 ll2h Il2 il21s