Year: 1879

auce. notwithstanding O momenbary cneok III


1873. has been continually increasing. 1t ID
now very large. During the same period the
price of gold has gradually decreased from hfty


per centum premiam to par, in paper currency
aud this circumstance has followed the pro-


geess of the other, with the regularity OF effect
| from cause.


Everybody knows that the difference be-


tween the exports and imports must be paid in


coin and that gold must therefore flow into
! the country of which the exports exceeds the
| imports of consumable values. There is nc
other way of settling the balance and such
| balance is being settled year by year-nay
1 should cay, daily. In this state of things, II


merchant. wishing to import anything or pay
| o foreign debt, should send gold instead OF
meroh andizs he would 80 far as the volume OF


gold coin in this country 10 concerned, be doing
vain act for that same gold, or the came
amount of gold, would flow back to settle


balances on the goods he did not choose to
send himself and left other parties to export.
There could not be, nor is there now, in this


country, any demand for gold for expectation.
No one would need it for that purpose; and it
would have to stay here-become abundant
here. Nor would this have the effect of driv-
ing paper money ont of circulation for paper
currency has certain advantages over gold !;
and 80 long as the paper is not in excess of
what the con yenience of business requires, it
will always be at least on par with gold.
If there is danger OF an over issue of paper,
there is, on the other hand, also, danger
of q superabundance of gold. Should
the favorable Balance continue to occur
or perhaps it might become greater and
greater-then there would of course be extra
ordinary amounts of imported and native gold,
within the national limits, and in the hands of
persons anxious to find some way of using it
proftably. There would be great competition,
not to accumulate gold but to dispose OF it in
loans OF safe enterprises. But safe and
paying enterprises are not common-not
easy to discover, devise, and carry into sure
execution. They will be comparatively scarce,
while the holders of gold would be competing
for them. One thing appears pretty clear,
manufacturers and importers will, in such
state of things, prefer to pay taxes and duties
in gold, and which must therefore accumulate
in the treasury. The government will be put
to great inconvenience by it's not getting back
enough of it's own paper issue for its own uses
its payments, it's transfers, etc. 1t will have
to force it's creditors to take gold, though they





foresee how far this tendency may progress.


/ am astonished that Secretary Sherman did
not foresee the natural effect of the favorable
Balance of Trade. He and Hayes, and Grant
before them, spoke several times of the "pros-
perity" and economy the excess of exports
over imports indicated; but did not seem even
to see the effect it would have in making re-
sumption success. On the contrary Sherman
gave material aid to the gold dealers, and kept
up the gold premium, by boarding more than
one hundred and fifty millions Of gold coin
which he got not only for duties, but also by
purchase. Clearly he believed that there
would be q run on the treasury to demand gold
for greenbsoks. Clearly, also, that not having
foreseen the very contrary which took place,
be is not entitled to any credit for the result
and makes now sorry Mgure as fnancier.
Il is now plain that Resumption was possible
only by the mere effect of the laws of trade,
which turned the balance in favor of this conn
try; and that Sherman's manipulations in the
bond and gold market had no influence on the
final event except to delay it till the time came
when by act of Congress he could interfere no
more.


A new fact is added to the many which pre-.
viously proved that gold and silver are, in
spite of all legislation for coming and giving
them currency as money, really and above all,
having an exchangeable value de-
pendant on supply and demand, and on circum-
stances which no measures of finance can con.
troll. T. VIC.