, 1880-09-26

by yielding to the bummers In the smallest
degree
HOW TIE INFLOW OF GOLD AFFECTS
PRICES AND IMPORTS.
The English papersnre discussing the drain
OF gold to the United States, the possibility
and extent OF its continuance, and the prob
able effect of the same upon business In
Europe, and especially In Great Britain. The
London Economist ot Sept II states that be-
tween August and November, 1873, there was
shipped to the United States gold to the fol-
lowing exteut-counting pound sterling as
equal to five dollars:
From France. .....-.---...-.''..:.'.... oo'ooo'oV
IotaL... f67.oo.ooo
That much was needed in those two months
of 1879 to settle the balances. The question
isconsidered now in England, How much will
be needed for the same purpose in September
and October, 1so2 On this point the follow
Ing figures are given: T.
4a ,,s Nsx J; York bank banks - IS s1'+'aoo so7oooo
fssi e5ssi n months saPsfs 10. esoo 21ooooo
British harvest. per cent be- Good
low average. average.
These figures show reduction Of the bal
ance of trade Of S15, COX, COO, or that much less
to be paid to the United States. The same
paper gives. the following additional figures:
Net imports of specie into United
States year ended June 80, lS6o,....S 1900. 00o
Increased stock of gold and @@ - ~ ''''
silver coin and bullion, less
certificates, in Treasury, .E34. .Q0QUQ0
Increased stock uf specie
and certificates Of Nadon- ~
al BANKS. c1s0A.VV -.
Gone into circulation. ....::.......s 100000
Decrease IN leEal~tenders In Treasury
1nerease ere 'n' il note 'c;ircuiatio;p; of the -
National bAnKa.. z-,oN,V0V
Increase Of currcucy in circulation in
year ending June 10, 1851 $107, ,00oooo
The Economist has this to say in comment
ing on these figures:.
These figures show wonderful power of ah-
aIon Of y the tee Gnited ssates aftef @
them we can hardly argue that because the Now
York NANCY market is qufescent gold may not
for tie New York banks themselves, but much
may be wanted for circulation tn the western
States. especially for the harvest demands Of
borne ia mind With respect to tie demands
which the United States may nuke on us for
bullion: They have clearly larger stock of the
ton between their1efports and imports fa less,
and prices havo also; to some extent risen on
tank tSfae hae oxh Eod snd probaSy viii
be taken for the United States from this country.
it wifi probably also not be taken to the extent
that it was Inst year. An intermittent course,
not a regular tiow. may be expected. Goods and
securities will, we cannot doubt, this year as
last, be taken by choice. The Americans ca; VII VII
in income, Or be a source Of profit. to tnae
which, though valuable, is under the ciruum-
stauces source Of neither.
The American reader will find In this
commentary much that is worthy Of atten-
tion. We cannot go on receiving gold at
the rate we have been doing without pro
ductng an imitation Of prices in this country,
and also MI Initiation Of the cost Of produc-
ton, which in the end will make us CUSTOM
ers OF foreign merchandise. The history Of
last years sudden advance I'll prices is too
recent to have been forgotten. In July, 1872
there was a sudden craze in the iron and
steel market. Prices advanced rapidly and
enormously. The British iron and steel
production, which was largely suspended,
revived. Prices had become so high in the
United States that the British mills were
overwhelmed with orders from the United
States. BY October Of 1879 the number Of
British mills and furnaces In operation was
doubled, and they had orders at large ad-
vances over prices which would have been
gladly accepted three months before. We
imported pig-iron at enormous prices and
steel in all its forms, our own establishments
not being able to meet the demand even at
prices 100 per cent greater than they were in
May and June. This bubble burst in Feb
ruary, 1850, but not before we had contracted
for iron and steel amounting to many mill
ions Of dollars thereby reducing the balance !
in our favor. We had simply imported !
that much iron and steel in place OF that |
much gold. The British manufacturers had !
reaped the profit.
But the Initiation Of prices was not confined |
to iron and steel. It extended to all branches !
OF manufactured goods. There was general !
advance in the cost of production and Of !
local prices, and as an immediate and natu- |
raj consequence there was an increase of i'm |
portatlon Of foreign manufactures; especially |
OF textile fabrics. How great this increase |
was may be seen by comparing the values Of
imports for the years ending June 80, 1879
IQuonf,fi1s- -77r1Ire eITaTues--TweIos
4ttte,. 5sn!ss g4ms 8. s"ase gsmt J;natas (. '"a'a
--- ~ ~ a5g ~:
&: 81; $; .sss, .,n,p. .,s, .,p
unbrd. sq'r -, NJ, ,,,oo