New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-03-22
TIE GOLD PREMIUM as A MEASURE Oh
DEPREC ,dT[ON


MUM indicates corresp5na;Ggiy increased
depreciation in the value of our paper money,
as compared with tho values of those cur
rences in other parts of tho world which are
based on gold and silver. 1t is solf-evidcnt
that, as compared with each other, gold ID
worth more and greenbacks are worth less than
was the case four months ago. In that narrow
view of it the paper is now more deprecated
than it was in the Summer. But thb question
may be regarded in another light. For nearly
every purpose, requiring the use OF money, the
owner of ten thousand dollars in grcenbacks
is no worse and no better off than he would
have been six months ago with the same
greenbacks. He cannot buy with it as large
quantity of gold, but in other respects his
wealth is undiminshed. Tho owner Of ten
thousand dollars in gold, however, is richer
now than he would have been in September
last for all purposes. The general value Of
gold throughout the world may not have
changed, but its local value in tho United
States has risen. 1t should not be for
gotten that tho value of gold is on an
entirely different footing in New-Y0rk from
that on which it stands, for example,
in LONDON. In the British metropolis, it
constitutes the circulating medium. To
the amount of six hundred million
liars it is estimated to be in constant use in
Great Britain as money. Here it is an article
of merchandise, of great importance in our
commerce, it is true, but still of far less cOnse-
qucncc than it would be if every bank-note
and piece of paper money were convertible
iato metal on demand. Being an article of
merchandise, AMI its fluctuations no longer
directly affecting every contract for the receipt
or payment of money, its price may rise or
fall, like that Of iron or cotton, without any
perceptible effect for the moment on the in
ternal transactions of the country. If, how
ever, the rise or fall should become permanent,
the pecuniary engagements are few in number
which could escape ITS influence.
We have at the Atlantic and Gulf seapOrts
of the country about sixty million dollars
worth of cotton, and less than twenty millions
worth of gold exclusive of that owned by the
Government. At any given moment rise or
fall of the gold premium determines whether
more or less of the cotton shall be exported,
or less or moro foreign goods brought into
the country. When gold rises, exports are in
creased and imports diminished rs compared
with what they would have been had gold not
varied. When it falls, exports are less and
imports more than would otherwise have been
the case. Under n convertible currency these
effects could only be- produced by general
change in the market prices OF the articles
themselves. Taking our whelt. cotton, tobacco,
petroleum, provisions, and the other staples
which we send abroad there are probably
two or three hundred million dollars worth of
them constantly in the hands OF wholesale
dealers and available for export. A rise or
fall of one or two per cent in the gold pre-
MUM affects all these articles at once in the
same way, irrespective of any special changes
in their market values from natural causes.
Changes in market prices from Ordinary
causes the dealers in the articles might be
able to foresee, or calculate upon; but it is
evident that they cannot form any estimate
of the Influences which, from day to day, may
nroduce fluctuations in the gold premium.
Thus tho forces which Wall-st. spectators
NAV bring to bear on the value of the
comparatively insignificant sum OF twenty
million dollars in gold are constantly
producing unforeseen profits and losses
lo the owners of two or three hundred mil
lion dollars worth Of cxpOrtable articles,
and also, though in the opposite direction, to
! all those engaged in the import trade. To
n certain extent the eDtiro foreign trade OF
the country is by this means made to have
its profits and losses depend on chance, instead
of the knowledge and skill of the merchants
who are engaged in it. The exporters and
importers are thus placed under constant
temptation to speculate on the price of gold.
When the gold premium rises the demand
30 IF IN fnr
eirn countries slackens, and when gold falls
exchange is in request to pay for the foreign
goods of which the importers are melted to
enlarge their stocks. The exporters are sub
iected to the opposite influences, and are
enabled by an advance in gold to raise the
prces of their commodities, and compelled to
lower them when gold falls.
If we take the gold vLuo of the paper
dollar as o measure of the depreciation of
orr currency, we must take the average, not
merely of month or quarter, but OF
series of years. The extreme prices reached
by gold in some of tho dark days of the war
ara Unfair tests of tho depreciation, and
equally unfair are the lowest prices touched
during the years of peace. The laws which
reouire the duties on imports and interest on
the Public Debt to be paid in gold have been
of the utmost service in keeping the range of
the premium within moderate bounds. A
market abundantly supplied and constantly
resorted to by purchasers, is much steadier
than one where supply and demand are matters
of great uncertainty. Were the gold premium
left to turn solely ON the supplies from the
mines and the demand for expectation to for
eign ports, we may be sure the fiuctua-
tons in it would be more violent than they
arc now. The demand for customs and
the supply furnished by the regular in
terest payments from the Treasury act as