FINANCES OF THE UNITED STATES. 



47:] 



hare fallen to a lesser extent, &s in the case 

 of hay. which, nominally 10 per cent, higher, 

 ;!v for shipping purposes 25 per cent, 

 lower than last year. Nevertheless, relatively 

 to the other articles of the home market, there 

 has been a general and large rise in prices, 

 which has operated beneficially for all who 

 held stocks of goods, and this state of afiairs 

 has given activity at par prices to goods which 

 had been deemed "dead stock,'' but which be- 

 came salable. As a consequence, a certain de- 

 gree of prosperity has manifested itself hi busi- 

 Tcles, and the number of failures has 

 been far less than last year. 



The actual number of failures in the North- 

 ern States, as compared with last year, with 

 the amount of liabili' : :>llows, per the 



report of the mercantile agencies : 



occurred during the first quarter of the year, 

 or before the advance in the value of goods to 

 which we have been alluding : 



January 374 



February 353 



March 263 



April 



... 108! 

 



July 151 



August 



September 75 



October 



November 57 



December 39 



The failure by months, as exhibited in the 

 following figures, show that the larger portion 



The failures for previous years are given in 

 the * Cyclopaedia" for 1861. The amount this 

 year has been reduced to a small item compar- 

 atively. The beneficial effect of paper money 

 has thus been produced, but the danger com- 

 mences. The goods if realized on cannot be 

 replaced at their prices, but buyers must meet 

 the rising market, which momentarily becomes 

 more hazardous, because subject to the collapse 

 of the paper money. Stocks have followed 

 -arne course of advance under similar 

 influence. The monthly prices for the year 

 rill be seen in Table B, on the follow- 

 ing page. 



The average advance in the stocks was 40 per' 

 cent : that is, the sum of the quotations for De- 

 cember is 40 per cent, more than the sum of 

 the quotations for January, showing that the 

 rise in prices of stocks has about equalled that 

 of gold and exchange. The average advance 

 of the commodities in the above table of prices 

 is also 33 per cent., thus showing a singular 

 uniformity in the rise of pr 



The list embraces Government, State, and 

 railroad stocks. These latter represent the 

 proprietorship, and the theory of the paper 

 money influence is, that the debts of the 

 companies may be easily discharged in paper 

 money, thus leaving the stock more valuable 

 than t 



The advance which pervades all descriptions 

 of business compels the railroads to demand 

 higher freights and fares. This swells the 

 sums of their revenues, and although their ex- 

 penses are also more, yet the result is a higher 

 profit. Thus a railroad'may have earned in 1861 

 $7.000.000, paid -:. and $4,- 



000,000 expenses, and it would have $2,000,000 

 surplus ; on the supposition that its expenses 

 doubled in paper, and that it doubled its 

 charges, it would pay $8,000,000 running ex- 

 pense, $1,000.000 interest, making $9,000,000, 

 which from $14.000.000 revenue would give 

 $5,000,000 surplus. Under this operation the 

 first effects would be to improve second class 

 bonds, which would now get interest hi full. Ul- 

 timately, as the process progresses, the bonds 

 would be paid off in this species of paper, leav- 

 ing the roads clear to the stockholders. The 

 question of the constitutionality of the legal 

 tender notes must be settled however. Already 

 suits have come before the courts, where pay- 

 ment of mortgages has been tendered in legal, 

 tender and refused, on the ground mainly that 

 the State courts cannot recognize anything but 

 specie as a legal tender: a law of Congress 

 cannot override this proviso of the Consti- 

 tution. 



