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COMMERCIAL CHRONICLE AND REVIEW.

ON

FLUCTUATING CURRENCY-CHANGE IN VALUES-OSCILLATIONS IN TRADE-ALTERNATE ANIMATION AND DEPRESSION-COST OF IMPORTS-SUGAR PRICES-GENERAL INFLUENCE-RESTRICTIONS GOLD DEALING-HIGH PRICES TO CONSUMERS-LEGAL TENDER EFFECT ON BANKS-CIRCULATION OF-NEW YORK CONSTITUTION-SPECIE PAYMENTS-DUTY OF SUPERINTENDENT-MANDAMUSSPECIE MOVEMENT CALIFORNIA REMITANCES-BİLLS OF EXCHANGE-PRODUCE-EXCHANGE TABLE RATES OF GOLD-DEBTORS ABROAD-PRICES COMPARATIVE-IMPORTS-DUTIES-VARYING COSTTAX ON CONSUMERS-EXPORTS-DEPRESSION OF BUSINESS-GOVERNMENT STOCKS-CONVERSIONS OF FIVE-TWENTIES-PRICES-CONFEDERATE LOAN-NATIONAL CREDIT.

THE most prominent influence upon the market has continued to be the fluctuating value of the paper currency, in which the values of goods are measured. That disastrous agency makes and unmakes fortunes at a turn, baffling the foresight of the most sagacious. In that effect of paper may be recognized one of its greatest evils, since the mere depreciation, if it were continuous, could be calculated upon and guarded against; but when the measure of value itself becomes the subject of speculation, and may be depressed or inflated by the hand of the issuer with the same ease as that of the aeronaut in governing a balloon, the wages and property of every one become the prey of the initiated spoiler. The great change in the prices and cost of commodities is one of the evils, but the spasmodic action of the markets is another as great. While gold rises the utmost desire to buy any and everything pervades and trade is very animated. A combination of brokers, then, by acting upon gold and bringing it down, paralyzes, as with the wand of an enchanter, the whole business community, and suddenly no one wants to buy anything. Thus a few thousand dollars lost in "bearing" the gold market, affects all property from the Atlantic to the Rocky Mountains, undermines every industry, and jeopardizes the weekly income of every family. The following figures show the effect upon a single article-that of sugar-imported into New York for four weeks:

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Thus week by week sugar rose and fell per pound, although the first cost abroad did not vary materially. The fluctuation in paper caused a fall of 13 cents per lb., or 17 per cent for the week March 28, as compared with March 2. In the next week a rise of of a cent took place, but the market, from being animated with the rise in February, became completely dead. The sugars that cost 93 cents in February could find no buyers at 8 cents March 28, and the subsequent slight advance restored no vigor to the market. The same evil influence pervaded all markets, and many importers were compelled to appeal to the auctioneers. The idea held out, that the Treasury department would be able, aided by

the bills in Congress and the Legislature against dealing in gold, to bring government money up to par, simply killed all business, because none would buy when there was a hope, however fallacious, that prices would fall heavily. In March the paper depreciation, as seen above, raised the price of sugar 4 cents per lb., viz: 1.8 cent premium on gold to pay duty, and 2.29 cents in the rise of exchange above the gold par. If paper should again be equal to gold those sugars that cost 9.78 cents would cost but 5.59 cents-a fall of 43 per cent and this enormous decline threatened all goods alike. It is therefore no matter of surprise that trade came to an end. The most sagacious and intelligent merchants. understood the position, and conscious that there was, despite the temporary gambling efforts to raise the price of government paper from 60 cents per dollar, no possible alternative but a further decline, held their goods firmly, and retailers and consumers were compelled to pay for daily wants the highest prices. They had no benefit from the spasmodic reactions. Another influence upon the market besides the withholding pay from the government creditors and the buying of greenbacks on speculation, based on the effect of the restrictive laws upon gold dealing, was the fear that the courts would pronounce the legal tender of the government unconstitutional, and that the banks, in consequence, would be held reponsible in specie for their issues. This apprehension caused a contraction of issues which may be expressed in the banks of three cities:

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March, 1862..... $5,348,138 $2,120,756 $5,368,944

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$12,832,838

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Thus at these central points the circulation nearly doubled, based on "greenbacks," during the summer. They then began to curtail, and drew in $4,000,000, when it became understood that the New York Court of Appeals, although composed of democratic judges, would, as matter of expediency, pronounce in favor of the legal validity of greenbacks as a tender. The constitution of the State requires all banks to pay their bills in specie without reference to legal tender. They are also required to give ample security that their bills shall be paid in specie. Under this constitutional requirement it is the imperative duty of the Bank Superintendent to compel them to deposit securities as fast as gold rises. The bills of the banks that have not paid in specie have many of them been protested and sent to Albany to have the law complied with. The officer does not do it, and the case comes before the courts for a mandamus to compel him to carry out the law.

It is evident that all values in the country having risen 50 per cent as measured in the paper, it would be ruinous to the many to pronounce that paper illegal. In the same manner the Court of Appeals, we think, at its first organization pronounced in favor of the constitutionality of the free banking law, in the case of the North American Trust Co., to protect "vested interests." In the present instance the protection is but temporary, since creditors will be first ruined and ultimately all classes. Nevertheless, the fear of being held accountable being removed from New York banks, and through them from others, gave a new impulse to the expansive movement. The attempt of the New York Legislature to re

strain the dealing in gold had a tendency to extend the business to Jersey City.

The exports of specie continued very considerable, notwithstanding that the paralysis of business caused a great decline in the demand for bills on the part of the importers. The specie movement was as follows:

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The exports from Boston were also pretty large, while, on the other hand, the receipts from California continued to be very limited. The larger portion of the remittances thence being to England. The effect of the bill before the New York Legislature to interfere with the rights of property in gold was, to cause it to be sent to England, where, being drawn against, the bill would pay well in New York. The most hurtful of the measures contemplated by the New York bill was the prohibiting the banks to lend on bills of exchange, which are, so to speak, the vehicles of commerce, and form the most important as well as the safest of the paper legitimately taken by the banks. The decline in bills operated adversely upon the prices of produce, causing a decline and diminishing the activity of shipments. The rates of bills were as follows:

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The rates of exchange are governed almost entirely by gold, and fluctuate with the premium on it. Thus, it is assumed that the cost of a bill based upon an actual shipment of specie to England is 110% per cent, which would be the price to a person paying gold. To get the price in currency that rate is multiplied by the premium on gold for the day; at a premium of 10 per cent for gold the price of the bill is 121.78; at 20 per cent 132,74, and at 50 per cent 165.93. The gold rate for francs is 5.10, which, being divided by the premium on gold, gives the price of francs in currency. At 170 for gold the rate is 3 francs per dollar; at 150 3.40 francs per dollar. A good deal of complication grows out of this use of paper in foreign accounts. Thus, a person in England owing say $1,000 in New York, would in ordinary times be drawn on for £206 12s., but now claims the advantage of the exchange, and demurs at paying more than £132 12s., exchange on London being 170. If this is not submitted to, he orders the amount paid here in greenbacks by a banker for his account. This is not the case however if £206 is due them. The "rate of exchange" is then entirely ignored, and nothing but sovereigns recognized. In this way the country loses in the aggregate a very large amount justly due it.

The effect of the paper inflation on prices of most articles of produce is apparent in the following figures, which show the rates for the same articles in Montreal, New York, and Richmond:

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The quotations from the Richmond paper, as compared with Montreal and New York, indicate the changed circumstances of trade as well as the influence of paper. The blockade of the Mississippi cut off a vast supply of produce from the Western States, that usually went into the South, and turned it upon the Eastern markets, glutting them to such a degree, that notwithstanding the most immense exports, grain, flour and corn are unusually low in New York, in fact, rather lower than in Montreal for specie. On the other hand, the price of flour in Richmond is also low for spęcie, notwithstanding the loss of the Western supplies. Rice is one-third the New York price, but bacon and butter are dear. The imports of the month have been as follows compared with the corresponding period last year:

January.

IMPORTS, PORT OF NEW YORK.

--Entered for

Specie. Free goods. Consumption. Warehouse. Total.
$101,906 $2,413,649 $8,741,227 $4,482,794 $15,739.676

February..
March...

Total 3 months

66 1862....

213,971 783.561
123,616 1,328,806

7,372,539 11,461,572

3,657,775 12,037,846

3,454,530 16,370,524

$493,493 $4,526,016 $27,575,338 $8,837,188 $44,137,946 314,992 9,109,527 24,134,259 10,862,460 44,721,238

The aggregate of imports is nearly the same as last year, but the amount of free goods imported is much less, since the changed tariff has taxed many articles before free. The amount of duties collected for the month has however been less than for the same month last year. The average duties for March on dutiable goods has been $4,554,460 on $14,916,102, or 30 per cent. Last year the amount was $4,626,862 on $13,352,256, or 34.75 per cent. Thus it appears that the advanced duties has had the effect of diminishing the rate per cent, and the advance, including exchange and premium, has been very heavy. Thus the importers have paid in March:

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This is rather more than 100 per cent on the imports, and out of the whole amount the government got but $4,554,460, leaving $10,514,103 advanced by the importers, and ultimately paid by the consumers, for which no one derives any benefit. This is at the rate of $126,000,000, or as much as the whole revenue tax is expected to give, but which does not benefit the Treasury one cent. Yet Mr. CHASE has the effrontery to claim that his paper is a "loan without interest."

The exports for the month have been as follows:

EXPORTS, PORT OF NEW YORK,

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Total 3 months $15,175,680 $330,685 $2,036,550 $48,247,673 $65,790,581 66 1862....

8,906,426 141,647

817,167 81,116,754

40,981,994

The amount of specie shipped was large, including the amount sent away under the first alarm caused by the action of the New York Legislature. The exports of produce for the month were also very considerable as measured in paper prices, but as measured in the currency, for which they will seil abroad, not much in excess of last year.

All business has been very much depressed by the terrible uncertainty which overhangs the future of the government finances. The Treasury is largely in arrears, and the utmost efforts have been made to induce the conversion of greenbacks into 5-20's. Inasmuch, however, as that the law, as it originally stood, allowing conversions into that stock free, and restricting its sale to market value, was altered at the urgent request of Mr. CHASE so as to leave out those provisions, for the express purpose of making private bargains with loyal capitalists, no one can tell at what rates

the awards have been made.

The prices for stocks have been as follows:

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