Year: 1870

s'.f y .Sas 'ss-' c.u.a


The rise and fall OF gold fraction or two


or even one or two per cent in Wall street do


not reflect the financial, commercial or indus


trial condition Of the country. Gold is down


q trife one day, up little the next, and often


Huctuates In this way several times the same


day. Speculations and combinations Of


brokers, bankers and money dealers cause


this. They live by it. The bulls and bears


feed upon each other. Their operations are


based upon no principle of finance and are


simply gambling. But when gold goes down,


as 1t has been going lately. and the decline is


comparatively steady, there are other causes


at work beyond the control of spectators or
gold dealers. 1t has declined five per cent
within very short time and twenty per cent
in about five months, che tendency being
downward all through. What then, is
the cause? This Is question that deeply
interests business men and every man in the
country; for by looking at the cause Of this
steady decline we may form some idea as to


what the prospect Is of gold remaining down.


1t is evidently not the amount of currency
in circulation that has affected the price OF
gold, because the volume of currency Is about


the same now when gold Is 115 to 1l6 az it was


when gold was 1856 or higher. The true cause


is to be found in the less demand for gold


abroad to balance the account of trade. In
other words, our expectations have equalized
in measure our importatons, without re-
quiring the precious metals to make up bal
ance. But here several important questions
arise. What have we exported to equalize
more the exchange? Have the expectations
been the produce of our soil and industry
only? If that be 80, if our cotton, cereals,
manufactures and other products have paid
for the importations, then chat is healthy
state Of trade--then gold will not so abroad
and will remain down. If that be the case and
we can go on increasing our products and the
expectation of them gold will decline more
and more, and we should not be far from specie
The exchanges and the balance of
trade with foreign countries must determine
The price of gold.


But have the products of our soil and in
dustry exported abroad equalized the value OF
importations and the profits on freights? Have
they come anywhere near that? It is true the
valuable cotton crop, which has been going
ont during the last few months, has contributed
a good deal to balance trade; but that resource
will not hold out long, and we understand the
mportations recently and at present are very
heavy. The truth is we have been exporting
and United States bonds especially,
to great extent, to balance the trade against
us. The credit of the government has i'm
proved 80 much and the demand for our bonds
is so great abroad that our creditors prefer
them to gold. Even the interest coupons are
not sent back to be paid in specie, but for the
purchase of more bonds. But there must be
paying the balance Of trade against us. The
more securities 60 abroad for this purpose the
greater will be the demand for gold to pay the
interest by and by, so that in the end we must
sither find an extraordinary amount of pro-
iucts for expectation to equalize the trade and
% pay the interest on our indebtedness, or
here will be greater demand for gold than
,ver. Shall we have these products of the
soil and industry to balance the trade after the
expectation of bonds ceases? If we have.
gold will not 60 abroad, and will remain down.
If we have not, can gold continue at a low
premium or can we approach specie pay
ments These are questions which prudent
business men should ponder over before they
suffer themselves to be led astray by state Of
things that may be only temporary or acct
dental.