The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1879-10-13

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Heavy Imp0rtatioHs of Goid-Dan-
gers which Attend a Revival of
Prosperity.
Recent statements made by MIR. Bur-
chard, Director of the Mint, enable us to
measure, with toleinble approach to ac-
curacy, the large volume OF the precious
metals which is flowing into the United
States from foreign countries. Within the
last three months our importations of coin
and bullion have amounted TO S34, 312, 745,
and there are at present more than
aggregate of about $40 900, 900 for the
three months. This is at the rate of
Sl60, 900, 600 per annum, or more than three
times our average expectation OF gold since
the full exploitations OF the California
mines. This wonderful reversal of the
current. this turning back of the outflowing
tide of gold and substituting for it an in
flowing tide Of more than three times the
amount, is so contrary TO the usual and
natural course of things that it challenges
the thoughtful attention of the financial
world. As this country is the largest pro-
Queer OF the precious metals they should
be, in any ordinary condition OF trade. a
heavy article OF export, and not of import.
The present great influx of gold must, in
the nature of things. be temporary; but
the Director of the Mint thinks ii may con-
tinue for at least six or seven months. It's
tendency, while it lasts, is toward an
enormous expansion of our circulating
prices. In other words, it tends to intro
duce new era of speculation.
A vast and sudden influx of money is not
necessarily q benefit, as Germany expert
enced to its cost in the six or seven years
which followed the stupendous French in
demnity. Among the most instructive phe-
nomena in the financial history of the
world are the wonderful recovery of French
prosperity during those six or seven years
and the severe business prostitution which
ensued in Germany. A sudden and enor-
nous increase of the circulating medium
of country is not necessarily n blessing
We are not blind to the advantages of
this great flow of the precious metals into
the United States. We share, to some ex-
tent, in the feeling OF exultation which it
seems to be exciting in the business classes.
It insures the success of our great expert
ment of the resumption of specie payments,
and in this view it is o proper subject Of
congratulation. If it had so happened
that during the first year of resumption
the flow of gold had been in the opposite
direction it would have been difficult if not
impossible to maintain the experiment.
Fortunately, we are relieved from all
anxiety on this great and vital point. We
never at any period OF our history had SO
much gold in proportion to our population
as the country possesses to-day, and the
volume is certain to go on increasing for
many months to come.
But there turks danger even in this
brilliant success. It is the tendency Of
redundance OF money to foster o
spirit Of speculation. As the cir
culating medium expands prices newt
ably rise. and in what is called u
rising market all who are in haste to be
rich are tempted to buy not only to the ex-
tent of their means, but to the utmost
stretch Of their credit, in the hope of great
profits from the expected rise of prices.
An expansion of real money has this effect
as well as expansion of paper currency.
We are, therefore. in imminent danger of o
new era Of wild and crazy speculation.
Wise legislation by Congress might avert
this threatened evil and convert the dam
ger into triumph. Never was q nation SO
favored by opportunity rs our nation is at
present, if it will but seize the occasion
for retiring the greenbacks and substitute
ing gold in their place. Before Congress
meets there will be gold enough in the
country to make it easy for all the national
banks to replace their greenback re-
serves with specie reserves and to fill the
vacuum in the general circulation which
would be caused by the full and final retire
ment of the legal tender notes. The bug
bear of contraction which has been so per-
sistently held up against this change has
no longer any terrors, and the withdrawal
and cancellation of the greenbacks would
forestall the threatened evil of an enor-
nous expansion of the circulating medium
and new cycle Of wild and miscellaneous
speculation.