The daily Gate City and constitution-Democrat. (Keokuk, Iowa) 1916-1922, 1917-11-26
CIVIL WAR FELT
IN MONEY MATTERS
Fluctuations in the Present Day Due
to Russia's Wavering, Were
Like Those Of
the SOS.
EXCHANGE NOT QUOTED

Either New York or London
Papers On
This.
The violent movement in the last
month of Russian exchange and OF
| the Russian securities here-the low
Errice of liz cents for rubles two
weeks ago. compared with parity OF
51.2, the simultaneous drop of the 5ls
per cent 1000 ruble internal bonds,
originally sold here at s325, and with
a nominal parity of s512. to s1S3, the
sharp declines even of the 51a per
lcent and 61s per cent external gold
notes in our market, and the very
low Levels compared with parity at
which those securities are still sell
ing-seems to present a dismal pic
ture of Russia's economic future; but
the whole situation instructively re-
calls conditions half century ago.
II was then that the United States
future was in doubt, observes writer
in recent issue of the New York Eve
ming Post That doubt was measured
in London.
Exchange on Great Britain was then
quoted on quite a different basis from
today. No one spoke of s4.S6as to the
sogereign. Exchange was calculated
On the number of dollars required to
/ purchase 4 shillings 6 pence. Parity
was roughly S1.091s. The present sys-
! tenn was not adopted until 1874 The
American papers during the civil war
did not regularly quote exchange on
London. Nor did the London Times
| publish exchange on New York. The
/ London Times daily and regularly
published quotations Of American
stocks in London, and daily and reg
ularly quoted exchange on more than
twenty centers; but New York was
not among them.
Exchange Rates and Gold.
New York exchange was, however,
quoted In the London Economist,
though quotations were always two
weeks late. A comparison Of the ex.
change rate with the premium on gold
during that period is exceedingly In
,teresting The suspension OF specie
payments in January, 1852. and the
depreciation of our currency led TO
a premium on gold, the establishment
/ of a gold exchange in New York, and
daily quotations of the metal, on the
| basis Of the number of cents in cur
lrency required to buy dollar in
| gold.
Following are few comparisons
of the quotations of the rate or ex-
change and the premium on gold on
the same dates: July /, 1868, rate Of
4 ~
I1ate of exchange 141. gold 129 34;
June %. 1864, rate of exchange, 234,
gold 2O5 to 223; July 16, exchange
274, gold GAS IL to 261 IA; July 27,
exchange $50, gold 254 to PSI IA; Dec.
81, 1864, exchange 249 IL, gold ga IA
to 227 rs; April Is, 1865, exchange
LOG IA, gold april I'D 14s Is to 153.
1t will thus be seen that the prem
ium on gold and the rate of exchange
| fiuctuated roughly together. Evident
lily, however, exchange was quoted
strictly on a gold and not on cur
rency basis. On April Is, 1865, a
week after Lees surrender at Apo
mattox, exchange was back to parity
while gold was at a premium OF about
so per cent Gold, in fact, retained
a premium until 1879, when specie
payments were finally resumed. The
concurrent fluciuation Of exchange
with the premium on gold was due to
political and military Influences, the
fortunes of war, and opinion on our
economic future.
The nature of the speculation in
London is revealed in the daily market
comments of the London Times. On
July %, 1863, it said:
~ -,t cT, ~ y
has again greatly increased as re
CARDS all speculative securities. II
the foreign market the principal fall
has been in the confederate loan
which. on the news by the China Car
American merchant ship has reached
to discount: or more than per cent
below the reduced price of Saturday
On the following day the Times
further remarked:
':In the confederate loan yesterday
it was scarcely possible to effect salei
at any price. The stock is alleged
to have been offered at 20 discount
but it is not understood that any
transactions took place below IS dis
count. Finally, the quotation was u
to 10 discount. The fall in this case
has been rendered more heavy by the
fact that the first success of the in
yasion of Pennsylvania by Gen. Lee
, led to a great number of speculative
purchases, many persons feeling
confident that an early mail wouit
Bring news to send the loan to
premium as remarkable as the dis
count to which it has now fallen
n From the first this loan has realized
the expectations entertained as to the
wide fluctuations to which the chances
of the war would subject it, and there
=. Is reason to believe that it may still
w experience changes of the most sud
den character"