New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-07-06

TIE ABSURDITY OF THE INFLATTOV CRY.
There is no part of the commercial world
where there is not at the present time more or
less complaint of dull times. These dull times
are accounted for in various ways but the
main cause of them, in our opinion, is the
close interdependence among commercial ma
tions. Take England for an example. Let us
admit that she is the richest of nations, amply
supplied with capital for her own uses, and having
extensive productive investments in all other
countries. Grant that her commercial system Is
perfect and still we shall find that the power
of her capital and the advantages OF her colos-
sal trade have their limitations. She cannot
sell to those who are too poor to BUY. ohe
cannot transgress the laws which regulate
commercial credit without suffering Tor IL.
With abundant harvests and cheap 1000 her
trade languishes, and every wound inflicted on
the nations with which she trades is TRANSMITTED
TO her nerves as by an electric shock. If dull
times taught no other lesson than the unity OF
fine modern commercial world they would not
he without considerable compensatiOns.
There is another way of accounting for hard
times which was accepted as the true theory
by the majority in both houses OF the last
Congress. These gentlemen would persuade us
that the whole trouble comes from scarcity OF
money. We beg to refer these gentlemen to
the financial condition of England, France,
and the United States at this very time, as a
practical demonstration that scarcity OF money
has nothing to do with the universal dizziness
of trade. We point to the remarkable TACT
that in each of the countries named unem-
ploycd money is extraordinarily album
dant. In countries like England, France,
and the United States, where banks have
been established, and where few pecu-
mary transactions of any magnitude are
made without Their assistance, 1t is impossible
to introduce or withdraw any considerable sum
of money within or from their territories with
out an immediate effect on the reserves of the
banks, unless under very extraordinary ana
exceptional circumstances. 1t is true that Mr.
Richardson in 1873 got ont some $26,OOO,O0o
of new LEGAL tenders which were temporarily
swallowed up in the panic, but within few
months they reappearcd, and they have acted
ever since to swell the reserves of the New
York banks. Prices having fallen, and the
number of exchanges having diminished, it
stands to reason that so soon after the panic
as the ordinary ways of buying and selling by
cltNll, Scl-Ol, Dooh htDt~, W., "iO i'''"'"N''
the quantity of money required for active use
must diminish. This is exactly what has hap
pcncd, not only in the United States but in
England and France. The following are the
facts which prove this in the present instances
l. The average quantity of legal tender notes
held in reserve by the associated banks OF this
city last week reached the total of 1913,
600, an amount which we think has never been
reached before, except for two weeks in 1871,
when the averages were still below S71, OOO,-
600. Before the end of the current month
there is little doubt that an average OF nearly
$50, OOO, 900 will he reached.
ii. The present specie reserve of the Bank
of England-about $133,O00, 00O-has never
been surpassed but once before, and, cuIlously
enough that also was in the Summer of ISL.
III. The specie reserve for some months held
by the Bank OF France-abOut $31 1000, 600
has no parallel for it, magnitude in the history
Of the world.
Finally, we invite attention TO the circum-
stance that all this money in England, France,
and America il offered to the public on the
usual conditions which govern bank loans and
discounts at very moderate rates of interest.
In France the rate for over year has been
four per cent, and in London for more than
four months the discount rate has remained
fixed at three and half Does this show that
the business world is suffering for want OF "a
circulating medium, either gold or papcrl