, 1875-08-04

THE NATIONAL EXCHANGE.
Prior to tho War, md for some time Sub.
soguent to the outbreak, we had in this coun-
try a system Of State Banks, which in Romo
ten Or more States maintained specie.pny-
u,cnts, redenming their notes on demand in
coin. Tho country then engaged in str,,g-
G1e for life with armed rebellion; then fol.
lowcd tho issue of national notes, made legal
tenders, tho taxation Of S.ase Danks out Of
existence, mud the creation of now banking
system. Of which, redemption in coin was not
required. result Of this establishment Of
m itreteemable currency was tho organiza-
ton Of what was called Gold-Boar1, in
New York,-which practically las been
from TINT dny to this National
Gold Exchange or National Bank, through
whicl, the ir1sdcemable currency Of the coun-
try in bought and sold at It's value in rod
money 1t is only through this National Ex-
change that the currency Of tho United States
in convertible into money; it takes tho place
of the old Bpecie-paying bnnla, with this diff
ference: that the banks, hnying issued the
notes, redeemed them at par in coin, willie tho
Gold Exchange, not having issued the notes,
redeems or buys tho currency as any other nn-
curront or deprecated funds.
Tho Gold Exchange il MI institution main-
tanned by private capita. It's members hold
n cash capital Of sovonty-hve to eighty mill
ious of dollars, ono-half or moro of which
they hold on deposit in the New York Sub
Treasury for safo-keeping. With this capitA
they transact tho general clearing house bust
uesa for the currency Of the United Statos.
'lhoy hnndle all the gold that is mined; they
sell Whatever gold is exported. Directly or
indirectly, all the gold transactions Of the
people and Government, as well as Of all the
States anu municipal governments, aro dono
through that Now York Gold Exchange.
Whom payments Of any kind havo to bo 1nade
in gold, whethor for customs, or for bills Of
exchanye, or for any other purpose, the gold
has to DO obtainod, directly OF indirectly,
through this Exchange. Any man wanting
thousand dolnss III coin for any pur-
pose must tako his groenbncks or his Na-
tionl Dank notes to this Exchange, and
there have hts derreciated papor exchanged
for money. Tho rate at which the exchange
can bo Ind yarics. One nun may offer 10
furnish the 81, ,00D in coin for 1,l30 pnpor
dollars, when another may oiFor the coin
for !, ,125 paper dollars the man nooding the
coin will close the bargain with the person
who oiIcrH to take the loaHt number Of paper
dollars. Tho value OF grccnbacka in cx-
change for gold May, and aotnnlly does, vary
repeatedly in the course OF week, and evon
Of day. Tho Gold Exchange, however, pur-
chascs at the current ratos its business ia
inoessaut, its rooms have been open continu-
ously from tho beginning fourteon ycars ago,
except when closed abruptly on Dlack Fri
day, a.d during q day or two In tho panic
Of 1878. Tic Government iLsalt Inns
to deal directly or indirectly with
this Gold Exchange, this National
clearinghouse for tho currency. Whom it
Inns more gold than 1t needa, it offers gold IN
exchange for grosnbacks, and asks for bids,
stating how many paper dollars will DO given
for 800 in gold. Whoever will givo tue
greatest number Of papor dolars for the
gold gota tho bargain Tho man who has to
pay customs duties, or has to purchase q
bill on London, on tho contrary, wishes To
Gos gold, and lo sells his groenbacks to aorno
ono III lnc E1cllauge who will give him coin
for the least number Of paper dollars.
This National Dank or Exchange for thocon-
version Of thu currency into coin Is q nccossl-
~. II is essential to the transaction Of busi-
hess' 1t there wcro no placo at which the
currency could he exchanged for gold, business
would come to aHtand.stiil there would be
general suspension Tho operations OF the
Government, Oh well as foreign commerce,
would DO brought TO Init. This Gold E1-
chango Affords tic meana OF escape. IttaAes
tho placo OF tile Government mud Of tho M.
tional Banks, and pays out gold in exchange
for currency; it furnishes the actual money
essential to carry OH the foreign trade aud
business Of the country. It gives a sort Of
stability 10 tho valuo Of the currency, md &c.
cures for 1t tho highest possible value the low
Of supply aul demand viii iinpart 10 it.. Its
the best possible institution Of tho Kind 70
long rs tho currency is not redeemed by the
makers of it. Willie tie greonbackA are not
redeemed by tic Government. their purchas-
iug power il greatly steaaied and e,.haAcedby
tlo competition OF the brokers OF tho Gold
1toom. kobody else pays 90 much for them.
Without such M exchange the value Of our
nconycrtiblo currency would BE- utterly uu-
certain, nud would be different In the various
ps1ts of tue country. Indeed, there would
bo perpetual black Friday, until ths people,
by spontaneous action, no longer able To an
uuro them, would xSIsat Ia Msn ok areAutaaka