COMMERCIAL CHRONICLE AND REVIEW. COURSE OF BUSINESS-IMPORTS-DUTIES-EXPORTS-EXCESS OF IMPORTS-PAYMENTS IN COINSPECIE MOVEMENT-EXCHANGE-RATES OF PAPER MONEY-PAYMENTS FROM TREASURY-PRICE OF STOCKS AND GOLD-TABLE OF PRICES-EXCHANGE OF 7.30's-GOLD NOTES-SUPPLY OF PAPER -RATES OF MONEY-NEW YORK STOCK-HIGH PREMIUM-FINANCIAL SITUATION-RECOVERY IN CIRCUMSTANCES-LOAN OF PAPER-ERRORS OF GOVERNMENT-NO SUBSCRIPTION TO LOAN-SECRETARY'S REPORT-STATE OF FUNDED DEBT-ALL PAPER MONEY-CONVERSION FAILED-STOCKS FROM EUROPE-ACTUAL FALL IN GOVERNMENT STOCKS-AGGREGATE EXPENSES-CALL FOR MORE PAPER MONEY-GOVERNMENT BANK-DEPENDENCE ON PAPER-ЕРРЕСТ OF PAPER ISSUES-IT DESTROYS REVENUE-IT INCREASES EXPENSES-FORCED LOANS-PRODUCTION THE BASIS OF TAXATION -WAR DESTROYS PRODUCTION-DEPENDENCE UPON CUSTOMS-BASIS OF CUSTOMS REVENUEWANT OF CONFIDENCE-DISAPPEARANCE OF GOLD. THE course of business has, during the month, exhibited an improving tendency. The long continued abundance of money and the reduced stocks of goods have naturally brought about a greater demand for the most necessary descriptions. It is true that the anticipation of a more liberal demand for goods from the South, consequent upon the opening of ports and the progress of the armies, has not been justified to the full extent; but the indispensible wants of great numbers of people gradually make themselves felt, despite the utmost economy. There has, therefore, been some revival in manufacturing industry, and an increase in the importation of foreign goods, as seen in the following table: IMPORTS, PORT OF NEW YORK. January.................... February.................... March. April. May.. .... 62,007 ....... - Entered for Specie. Free goods. Consumption. Warehouse. Total. $163,658 $2,552,050 3,381 473 3,476,004 26,152 2,232,315 110,383 $6,663,396 $3,141,725 $12,620,829 7,058,174 8,370,486 13.872,140 10,312,689 4,841,846 18,719,866 7,141,197 3,853,218 13,252,882 1,146,093 8,091,120 4,600,920 12,948,516 Total, 4 months.. $451,532 $13,047.935 $39,366,576 $19,808,195 $72,914,238 1861....... 20,522,515 15,095,389 30,165,694 25,426,536 91,210,143 Exclusive of specie, the entries of goods are but little more for the whole period of five months than they were last year. The quantities of goods put upon the market this year are nearly nine millions more than last year, or, with the duties, they have been as follows: These duties show the change from the old to the new tariff, and the charge is nearly doubled on goods imported. The exports from the port of New York have been as follows for the same period: Total, 4 months.. 1861...... EXPORTS, PORT OF NEW YORK, ---Foreign. Specie. Free. Dutiable. Domestic. Total. $2,658,374 $27,193 $149,493 $12,053,477 $14,948,437 8,985,176 11,980,714 8,002,094 12,703,797 5,164,536 76,971 752,797 9,837,693 15,342,097 $18,108,737 $274,968 $2,197,642 $48,966,541 $59,517,888 3,005,196 1,036,847 2,534,586 51,207,009 57,783,638 The marked feature is the large increase in the export of specie, exclu sive of which the exports correspond with the imports as follows: The decline in the prices of grain has involved the export of much larger quantities to produce the same amount of exchange, which has been scarce, and gold has been freely shipped to make up the deficit, which has been further increased by the tendency of stocks to come home from Europe for sale, in consequence of the inflation of prices caused by the paper issues here. The financial course of the government has not been such as to inspire confidence, and a very large margin existed between the prices of stocks in London and in New York. The specie movement was, therefore, progressive, as indicated in the following table: The price of gold, in paper, rose rapidly under the shipping demand, which became urgent about the middle of April, when the government issue of paper commenced. The rates of exchange followed the rise in gold, and was as follows: The government paper money being ready for delivery in the fore part of April, it was paid out freely from the Assistant Treasury in New York, and its effects are manifest in the following table, showing the weekly payments, the deposits, and specie in the banks, the export and premium on specie, the price of United States 6 per cent stock, the premium on the old paper money, or that which is receivable for customs: Bank Prem. Price Prem. Payments. April 12...... 4, 43,831 19....... 12,531,675 " " deposits. Specie. 93,759,063 34,594,668 26....... 24,723,223 101,897,435 35,297,944 May 3....... 22,747,942 109,634,535 35,175,828 1,093,031 3층 105 938,032 3 103 881,452 30 104 June 7....... 6,570,880 125,566,961 31,284,882 1,647.299 44 106 14....... 9,832,791 125,613,375 31,162,084 2,040,327 6 107 23....... 8,486,213 126,654,422 31,047,945 3,150,988 7 106 1 3 3 As the paper money flowed out of the Treasury, it swelled the deposits in the banks, and sought investments as a matter of necessity in government paper, deposits, 5 per cent certificates, one year 6 per cent certificates, three year 7.30 bonds, and, to a small extent, in twenty years 6 per cent bonds. The price of which rose 14 per cent in paper, while gold rose 5 per cent. The different descriptions of government paper were affected as follows: The June quotation for the registered stock are ex-interest. The paper flood floated up these securities to par nearly, for gold, but in doing so attracted stocks from Europe. The interest on the stocks is payable in gold, and consequently the Treasury must buy gold, since the $60,000,000 of old paper money out is held to pay duties, the only revenue of the government. The Secretary, therefore, changed the 7.30 bonds for gold at par with the banks, to the extent of $6,000,000, which served to pay the July and August interest, most of which is due to the banks. The Secretary also exchanged $2,500,000 7.30 bonds for old paper money, at 3 per cent premium, when the market price was 64 per cent premium for the bonds, and 1 per cent premium for the notes, an operation which left a large profit to the banks. It was justified on the plea, 1st, that the Secretary wanted money, and 2d, that it was requisite to get the old notes out of the way as fast as possible, in order to get gold for customs; but as there are $56,000,000 of these notes outstanding, the getting in $3,000,000 would not help the Treasury. Again, if the notes were got into use as money, they would be paid out again, an operation which the law forbids. Again, if money was the object, the 3-year bonds would have brought 6 per cent in new notes, instead of 3 per cent in old notes, which are no more money than new notes. The operation was private and was inexplicable. The flood of money from the Treasury, which so filled the bank vaults, inflated stock prices, and swelled the Treasury deposits, also caused a fall in rates, which were as follows: The demand for money was very small, but little new business paper is made, the offerings for discount were very limited, and money was at 3 per cent on call. On the 1st of July many States paid their interest in gold. These payments, with those of the Federal government, were estimated at $7,000,000, a considerable portion of the gold remaining with the banks that held the stocks. The State of New York negotiated a loan for $800,000 6 per cent, redeemable, 1878, payable in gold. The amount of money offered was $5,400,000, and was awarded at a premium of 110.794, equal to 117 currency, or more than 10 per cent higher than federal stocks, which are not subject to taxation. When Federal stocks are so low, the transaction is a significant one. There has been no material change during the month in financial affairs, although there has been considerable progress in the development of those effects of paper money which we pointed out in our last, as apparent in the market. The symptoms of paper inflation have manifested themselves mostly in the rise of stocks, gold, and exchange. Yet these unmistakable evidences of approaching danger, have been, by a portion of the community, regarded as signs of prosperity, and by others not bold enough to deny their evil import, as the results of speculation. It is remarkable how exactly arguments and assertions reproduce themselves with the recurrence of the same circumstances. When the irredeemable paper money of the revolutionary French Government began to depreciate, the apparent rise in prices was charged upon speculators, forestallers, monopolisers, and the government resorted to laws making it criminal to charge a premium for gold; maximum laws fixing the prices for all necessaries of life; laws to punish contumacy in refusing to sell at legal prices, and manifold devices, the only result of which was to crush out producSion and accelerate ruin. After a lapse of seventy years, the same effects from the same causes are again charged upon speculators. The results cannot, however, be changed. In embracing the paper money policy, in order to avoid direct taxation, the government has invited national ruin to shield politicians from present responsibility. This process must be continued, for the reason that the accumulated capital of the country, which seeks permanent investment, is rapidly decreasing, and not a dollar has been obtained by the government from that source in the last six months. We may look back at events. The Secretary, in his annual report, states that the debt of the government had been, July 1, 1861, $90,867,828, and December 1 it was $267,540,035, an increase of $176,672,107. Of this amount there had been subscribed by the banks $50,000,000 in 7.30 notes, and $50,000,000 in 6 per cent 20 years' stocks, making $100,000,000 held by the banks; also, $50,000,000 had been taken by the public in 7.30 notes, and $24,550,325 had been put out as currency. May 29, the Secretary made another report, and the funded debt had risen to $491,448,984, an increase of $233,008,949. Of this increase none whatever had been subscribed. It was composed as follows: 7.30 notes paid out....... Paper money paid out.... Deposits at 10 days notice 1 year certificates paid out Oregon war debt........ $20,523,450 | 5.20 bonds funded notes... 47,199,000 Less treas'y notes red'med 570,550 2,699,400 $243,100,641 19,191,692 Net increase of debt..... $223,908,949 |