New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-05-11
STOP THAT GOLD!

The true principles which govern the move
mentS of the precious metals from one country
to another are among the most important and
most universally misunderstood of all the SUBJ
jects treated Of in Political Economy. Were
it not for their intricate connection with the
question of the currency we should not
attempt to discuss them here. By Mr.. Bout
well and many others it is enunciated, as an
axiom in finance, that we must wait for the
balance of traden to rule in our favor before
we can ever have specie payments again, while
we maintain the direct Opposte-that effective
measures must be taken for the restoration OF
the gold standard before the balance of gold
payments will be in our favor. The "balance
"Of trade" has for six months been in favor
of the United States in their trade in mer-
chandise with the rest of the world, yet we
now see the exchanges turning against us
and gold again flowing i'll a stream from
New-York to London. If Mr.. BOutwelrs ideas
about the balance of trade were correct this
could not be the case. His method of getting
back TO specie payments is to get the balance OF
trade in our favor, to let the gold, which he
thinks a favorable balance would bring to us,
accumulate, and then, when we have enough,
to resume specie payments as naturally and
easily as one puts on ones shoes in the morn
ing. We have steadily maintained that this
theory would not work, that the gold would
not flow this way, and that the balance OF trade
would not stay in our favor.
Suppose, by some suspension of natural
laws, two hundred million dollars in gold coin
to have got into this county, and our paper
currency to remain as it is, how could that
gold be kept hereP 1t might it is true, be kept
as dead weight in the United States Treasury.
We have now, at liberal estimate, one hun
dred million dollars in gold in the United
States, east of the Mississippi River, and
of this sum more than one half is
owned by the Government and lies as dead
weight in the Treasury. 1t does not seem to
be the policy of the Secretary to increase this
hoard, and, in fact, it is now considerably
smaller than it was five or six years ago.
There is further sum of thirty million dol
lars, more or less, which passes, or, more
exactly the gold certificates which represent
il pass to and from the Treasury in pay
ment of interest and customs duties, and
are employed by the dealers and specu-
lators in Wall Street as a basis for their
transactions. There are probably twenty mil
lions more in private hands lying idle and
boarded. The very fact that gold is now
leaving the country proves that the channels
here in which gold circulates, or rather stag
mates, are over full. If more gold was wanted
by the Treasury for its reserve, or by specu-
lators to gamble with, or by brokers to put in
their windows, or by private and over cautious
citizens to bury in the earth, the metal would not
be leaving its native country, especially after
such an extraordinary run of luck as we have
had with the balance of trade. But if it is
barely possible, under existing circumstances,
to retain one hundred million dollars in gold
in the country, it must be sheer madness to
think of retaining two hundred millions. We
90 so far as to say, that if any receptacles
now existed for retaining two hundred mil
lions of gold in the United States, gold would
not be leaving us but coming to us. If any
one could have been found in NewYOrk will
ing to pay five per cent interest for the two
millions in gold which were carried out of
New York harbor last week, that gold would
have remained here. Why indeed should it
be sent to London, where it is worth but four
per cent OF to Paris, where it il worth but
four and "a half, except that still less can be
had for it in New-YOrkf
There is nothing new in this discussion.
Over sixty years ago the true theory of the
movements of specie, and their connection
with the currency, was stated and defended
In a mastery manner by Mr.. Ricardo in his
pamphlets 81 The High Price Of Bullion q