COMMERCIAL CHRONICLE AND REVIEW. STATE OF TRADE-SPECULATIONS-STOCKS OF GOODS-NUMBER OF STORES-DIMINISHED DEMANDGOODS TURNED INTO PAPER-DEPRESSION OF FARMING INTERESTS-RELATIVE PRICES-FALL OF GOODS-IMPORTS-DUTIES-EXPORTS-BALANCE-TRAVELLERS-INVESTMENTS-SPECIE MOVEMENT-CALIFORNIA-EXCHANGE-RATES-DISBURSEMENTS-DEBT-CONVERSIONS-1-YEAR CERTIFICATES-PRICES OF STOCKS-UNITED STATES DEBT-ANNUAL INTEREST-MANNER OF INCREASE OF DEBT-STOCKS. THERE has been during the past month much depression in general business, and, to some extent, a panic among holders of goods, who have been disappointed in the expected demand for consumption. The rapid rise in exchange early in the year caused an active demand for all descriptions of goods. Holders were not disposed to sell, and buyers were very anxious to get into stock, in view of the depreciation of paper. This speculative feeling was anticipating a large demand for consumption at prices. proportionate to the extravagant rise in goods. That demand, however, did not take place, since the usual effect of an extravagant rise in prices manifested itself in an indisposition on the part of the public to purchase. The weak holders of goods not meeting the usual demand, and being caught in a counter speculation for a rise in government paper, or, as the speculators expressed it, for a fall in gold, there was great pressure to sell goods through the auction shops, and that at a decline of some 25 per cent. These ruinous fluctuations in business and the value of goods are the direct results of an unstable currency; but at every oscillation the moment of ultimate discredit is hastened. The real capital of the country is being rapidly used up, since the production is small and the old stocks diminishing through consumption. There were, according to the returns of the Mercantile Agency, 190,000 stores in operation in the Northern States in 1861. Of these, 5,000 failed at an average liability of $60,000. The average stocks of goods held by all the stores may be estimated at $10,000, which would give a value of goods equal to $1,900,000,000, or in round numbers $2,000,000,000, on hand. A very considerable proportion of these goods was "dead stock," or such as from lapse of time, etc., had become difficult of sale in face of constant supplies of fresh and seasonable goods. The first effect of the paper inflation was to make those goods more active and bring them into consumption, instead of the high priced new goods. This operation was not duly weighed by the speculators in goods at first hands, and the diminished demand is very serious. It is also the case that the shop keepers, while thus reducing their old stocks to the smallest practicable limit, buy very sparingly and only of such articles as are absolutely necessary to meet current consumption. The consumers of goods, in their turn, buy very sparingly and dispense altogether with many articles. If, now, the stocks of goods throughout the country are reduced by this process one half, or $1,000,000,000 or $50 per head of each person, it will be observed that the store-keepers have realized that amount of money from goods before idle, and that money they will not reinvest in the way of their trade at high prices, because of the frequent violent fluctuations. They seek for their capital some means of safe and permanent investment. The money which has been taken for goods is government paper, and the indisposition to reinvest it in goods makes it apparently very abundant, and it is attracted only into railroad and other stocks. It is obvious that this process must have an end, which will give signs of its approach in a positive dearth of goods, brought about by non-importation and nonproduction. The depreciation of the paper will then go on in the double process of increased supply and dearth of commodities. The ability of the great agricultural classes to consume goods is very small, since the rise in their produce bears no proportion to the advance in the supplies they purchase. We may turn to the Cincinnati market Thus in 1861 the farmer, for 1 bbl. pork, 1 bush. corn, and 1 bush. wheat, could get in Cincinnati 100 lbs. of sugar and coffee and 70 yards of shirting. To obtain the same articles now, he must give 2 bbls. pork, 20 bush. corn, and 14 bush. wheat, or, in other words, a bbl. of pork, in 1861, was worth 240 lbs. of coffee; it is now worth 40 lbs. A bbl. of pork was then worth, in Cincinnati, 154 yards of shirting; it is now worth 33 yards. These figures indicate how severely the rise in goods presses upon the consuming classes, and therefore how great must be the reaction upon the demand in first hands. It is to be borne in mind that this state of things takes place after a year of the most extraordinary exports of grain, when prices ought to have been higher. The quantity has been so great, however, in consequence of the closing of the rivers, as to counteract the effect of the currency upon produce. The usual influence of such a state of affairs has been to produce that extraordinary abundance of money which has so long prevailed, at the same time that the import trade begins to flag. The amount of imports for the month has been as follows: IMPORTS, PORT OF NEW YORK. -Entered for Specie. Free goods. Consumption. Warehouse. Total. January. March... April... 213,971 123,616 107,061 783.561 1,328.806 7,372,539 3,657,775 11,461,572 3,454,530 16,370,524 1,328,216 9,493,830 6,456,208 17,385,315 12,037,846 Total 4 months 66 1862.... $600,551 $5,854,232 $37,069,168 $15,293,396 $61,523,261 841,144 6,758,331 34,716,535 12,690,406 57,974,120 The quantity of goods sent into warehouse was large in April. The value imported was indeed large under the influence of the activity of February; but that had passed away on the arrival of the goods, and they went into warehouse, to some extent, perhaps, for re-shipment. The duties for the month were $3,957,198 on $13,626,463 worth of goods, being an average of about 30 per cent, against $4,140,952 of duties, or an average of 35 per cent, last year. The exports from the port have been as follows: EXPORTS, PORT OF NEW YORK. January.. February. March... April...... 6,385,442 213,685 758,266 16,137,689 23,695,082 1,972,834 74,949 375,224 11,581,933 14,004,940 Total 4 months $17,148,514 $405,634 $2,411,774 $59,829,606 $79,795,521 66 1862.... 12,944,001 197,497 1,424,845 56,249,767 53,685,791 The exports of the month have suffered some diminution by reason of the declining prices abroad and the decline in exchange, accompanied by a rise in freights. From the sum of the domestic exports for April must be deducted one third for depreciation of currency, and there remains about $10,000,000, as the cash value realized to meet an import value of $17,000,000, showing an apparent adverse balance of some $5,000,000 after the shipments in coin. This has to some extent been met by the realization of exchange held on speculation. There has been also some diminution of the amount of money required to be remitted abroad for the use of Americans there residing, since the high rate which they are compelled to pay for exchange diminishes their revenues one third and compels many to return. There has also been some reinvestments of foreign capital here, for the reason that, after getting interest the last year in paper, they would now lose one third the principal by withdrawing it; hence it is re-loaned for a term of years in the hope of resumption of specie payments, although the interest may during some years be paid in depreciated paper. The specie movement during the month has been as follows: 477,335 159,105 1,050,156 34,317,691 41 a 42 The receipts from California continued small, and the exports also declined. The disposition to realise bills caused a decline from the specie basis of bills in some cases. The rate in coin had been 110 premium, and for paper the price was the premium of gold added. Some houses were disposed to sell at less than 110% for coin, for a short time, since the supply of bills drawn against gold shipped direct from California was greater, and those bills could be sold less than if drawn against shipments of gold from New York. The shipments of specie hence, however, continued to exceed the receipts. The rates of exchange were as follows: The disbursements of the Federal Government, added to the general realisation of goods, and the indisposition to sell on credit, caused a continued increase in the abundance of money, and this fact manifested itself in increased stock speculations. The Treasury Department did not make any decided movement towards a more regular financial policy, but it effected the negotiation of some of the $500,000,000 of 5-20 bonds authorized. It will be remembered that the law authorizing these bonds restricted the sale to market value, and allowed of their conversion at par for greenbacks. The Secretary in his annual report stated that these provisions were obstacles to the negotiation, because they allowed no profit to large jobbers, and asked for their repeal. This request was complied with, and the Secretary was allowed to make such private bargains as he deemed good. Soon after his visit to New York, the conversions were represented as large, but at what rates he had made private bargains was not known. Between April 1st and May 28th, $47,000,000 of 1-year certificates fell due, and were paid. This large amount of money found employment in deposit certificates, and to some extent in conversions, Many new 1-year certificates were issued, but the interest, as well as that on the deposits, is no longer paid in gold. The prices of government stocks were as follows: The public debt at different periods has been as follows: Treasury notes.. UNITED STATES NATIONAL Debt. .5 per cent 100,000 000 22,464,762 One-year certificates....6 per cent Deposits demand....4 a 5 per cent Paper money. Total..... 120,523,450 122,836,550 139,996,950 87,780,000 81,452,812 189,996,950 3,382,162 2,530,641 3,267,511 2,700,000 47,199.000 49,881.980 110.321,241 150,281,126 50,778,567 57,746,106 80,235,636 100,000,000 24,550,320 145,880,000 149,660,000 244,366,251 399,900,956 $267,540,035 $491,448,984 $514,211,371 $721,668,727 $992,381,886 The general stock market continued to show the most active excitement up to the second week in May, when the high prices created uneasiness. Brokers required large margins from clients, and many refused to lend at all on fancy stocks. The market then gradually gave way, while money became in active demand to carry stocks. The deposits for conversion continued, under the interest created by the private takers of the stock from the government. The table of debt shows that since May last year the debt has increased $501,000,000, of which $400,000,000 has been paper money and temporary debt. There have been organized a number of banks under the new banking law, from the multiplication of which a demand for government stocks is hoped for. The limit of the law is $300,000,000 in bank notes, and should all of them be issued, it is inferred that they will supplant the old bank notes entirely. |