Year: 1871

Aoo IesSai money OFooE oSSsO0-As@~' ~
ence Or the Telegraph and Steam Pewer
In Financial Affairs.


A great revolution In the financial affairs


and relations Of the world is going on silently


and with little notice from the mass Of people.
The magnetic telegraph, steam power and the
quickening influence of the press are effecting
this. Nations and local communities are no
longer isolated or bound up In their own mar
row interests as they used to be. Their SYM
pathies and interests are enlarged. The
people of all civilized nations begin to feel
like the members of Q single community, and
to seek closer and more friendly relations.
True, there are wars still-dynastic and am
bilious wars, as in former times, though wars


at the present day are waged for the most
part for other and higher objects-for national


unity, in accordance with race, language and
defined geographical boundaries. But they are
being modified by the rapid and general diffusion
of intelligence. Even the working classes, en-
crusted, as they have been, in the old-time


prejudices Of race and nationality, and imper-


fectly educated as they are, begin to form
close international relations. 1t Is the same
with enlightened governments which have for
their aim the progress and well-being OF man
kind. But in commerce and financial ahairs


there is more marked tendency to unity,


enlarged and friendly intercourse and to the


equalization Of interests and values.


Among the many events of late showing


this progress and improved state of things


we may mention the postal money order con-


vention which was made last July between


Great Britain and the United States, and


which went into operation the 1st of October.


To many and at first this may not appear to be


an important matter, except as to the con-


venience afforded to the general public or
poorer classes for the transmission Of small


sums Of money. And, in fact, the convention
seems to have been made only or chiefly to
accommodate the poorer classes in making


small remittances. Article 1st Of the conven-


tion, after stating that there shall be regular


exchange of money orders between the two
countries, fixes the maximum Of each order,
pounds sterling, and when issued in the United
States at fifty dollars in currency. But it is
evident the system could be extended so as to
admit of larger sums being exchanged In this
way. We regard it as the first step, and an
important one, not only in regulating and
cheapening exchange between the two greatest
commercial nations in the world, but as leading
to general, improved and freer exchange
among all nations. It is applying the same
principle in international intercourse as has
been applied between the different sections of
separate countries, and the same that we have
been acting upon in the United States.


There may seem to be q difficulty In ex-
tending the postal money order system among
the nations generally on account Of the diff
ferent currencies and standard of values.
This, however, win vanish In time. In the
convention between the United States and
England the difficulty has been overcome by
fixed rules for calculating the relative value Of
currency and coin. Similar rules could be made
for Germany, France or any other country. Il
is this confusion of currency and coin values
that has long made the business of exchange q
source of great profit to bankers and brokers.
If values should be fixed by conventions gene
rally among the governments, that would
prove both convenience and saving to the
public and commercial men, and would tend
to prevent unnecessary fluctuations arising
from speculation and the power Of individual
capitalists. The rule established by the
British-American Convention to determine the
relative value Of money in the two countries,
until the two general Post Offices shall consent
to an alteration, fixes the pound sterling of Eng
land as equivalent to four dollars and eighty
six cents of the gold coin of the United States.
With regard to paper money deposited for
transmission through the Post Offices, the rate
of exchange is to be determined in New York,
according to the rate Of premium on gold on
the day Of receipt at that Office Of notification
Of such deposit. On the other hand, the value
in United States currency Of money orders
certified in the lists sent from the exchange


Office Of London to the exchange Office of New
York, is to be determined also at New York,
In accordance with the premium on gold on the
day of receipt Of such lists. This is very
simple, and under it relative values and the


rate Of exchange can be easily calculated.


Here We have the principle and basis Of this


new system Of international exchange. The
remainder Of the terms of the convention are


but the details for carrying out the object.


In the early history Of modern commercial


development in Europe, when England and
Holland were rivals, the great object was to
create such a system Of trade and finance as


to secure the advantages Of favorable ex-


change. Statesmen made the greatest efforts
to obtain balance of trade in favor of their
own country, and failing in that sometimes
resorted to financial maneuvres. In those
early times, when the Dutch had the balance
Of trade in their favor, England succeeded in
turning the exchanges favorable To London hx