THE WAY THE MONEY MARKET IS SUPPLIED.

Otago Witness, Issue 801, 6 April 1867, Page 2

THE WAY THE MONEY MARKET IS SUPPLIED.

(From the Scientific American.)

In reading the money articles in our leading daily papers it is manifest that nearly all the writers suppose the supply of loaning capital — the supply of the money market, as it is called — depends mainly upon the quantity of currency or money in the community ; the truth is, this supply is influenced very little, if any, by the quantity of money in the country. This will be made plain by the examination of an individual case.

John Robbins, one of the money lenders of this city, recently died. It is said that fifty years ago he had accumulated loo,ooodols in the jobbing trade, and that at the time of his death his funds at interest amounted to 4,000,000d015. In fifty years, the amount of capital that he supplied to the money market of Wall street had increased 3,900,000dols ; let us see in what form this increase was made, and what connection it had with the volume of currency in circulation.

Mr Robbins kept the run of dealers in dry goods, and confined his purposes exclusively to their paper. It is well understood among traders that the amount of their sales depend? mainly upon the stock of goods which they have to sell ; and, as their profits are proportioned to their sales, they all strive to keep a3 large a stock of goods as possible. When, therefore, their own capital is all invested in gcods, they are generally ready to hire the capital of other men, if it is offered on satisfactory terms. It is plain that if they hire capital and keep it on hand in the form of money, they will lose the interest on it ; in fact they do not want it for this purpose; they .want it to increase their stocks of goods, and so soon as they hire it, they invest it in merchandise. The capital that our dry- goods dealers hired of Mr Robbins enabled them to increase their stocks of dry goods. The enlarged stocks augmented their sale 3 and profits, thus giving them the means to pay Mr Robbins his interest. As the interest accumulated Mr Robbins loaned that also, and.it was immediately invested in stocks of dry goods. Thus his accumulation of 3 900,000 dols. took place in the form of bales and cases ot cloths. Had he taken a fancy to loan his funds to leather dealers his accumulation would bave added 3.900,000 dols. to the stocks of leather and hides. He called his investments "monoy at interest," but it would have been nearer the truth to call them merchandise at interest. It is true that Mr Robbins paid money for each of the notes when he bought it, and each was paid in money when it was due. So is money paid for a bushel of wheat or a barrel of pork when it is bought or sold, and there would be just as much propriety in calling a pork barrel money, as in calling the capital loaced by Mr Robbins money. The whole supply of capital to the money market of Wall street is made by individuals like 'Mr Robbins. This supply is increased by these men spending less than their income; it is diminished when they spend more than their income, or when they make loans that are not repaid. It is neither increased nor diminished by the quantity of currency circulating in the community.

The new Roman lira, just issued from the Papal Mint, has the same weight and diameter as the French franc. On one side is the inscription " 1 lira, 1866," and around, " Stato Pontifico ; " whilst the other side has the portrait ot Pius IX., with the legend : " Pius IX., pont. max. an. XXI." This coin has been struck in consequence of the recent adoption by the Pontifical State of the French monetary system as defined by the treaty between France, Italy, Switzerland, and Belgium.

Mr S. Laing, M.P., and a party of gentlemen, amused themselves labt week by examining the remains of cairns near Stromness. They turned up a part of a skeleton, but the ekull could not be found. There were also found some knives,, hatchets, ancient combs, and rude pottery or earthen urns.