THE VALUE OF MONEY IN CALIFORNIA. (From the Alta California, February 16.)

New Zealander, Volume 5, Issue 423, 4 May 1850, Page 3

THE VALUE OF MONEY IN CALIFORNIA. (From the Alta California, February 16.)

The value of money in California will afford a curious subject of speculation to, all communities other lhan our own. It will be looked upon nbrond as a Bine indication of the unhealthy state of a (Fair a hero, and many a prediction will be made by the sngo oracles of thn old world, and even of our eastern cities, of the rum which is sure to overtake us in all the relations of buiiness. They cannot, without thoroughly knowing our condition in business matters, form anything like ajuit estimate of the causes which produce this high value. It does indeed seem strange that the richest mineral country in the world should by a legislative enactment offer the highest rate of interest almost ever paid by a sovereign State for the use of money. It does seem strange that in the city where the largeit fortunes have been most suddenly realised, cither by the legitimate operations of trade or speculations in real property, there should continue to be paid the highest rates for the use of money ever before known. One accustomed only to the course of things at home, would certainly conclude that we were on the eve of a complete revolution in values ; and that the edifice of prosperity, which we have so suddenly reared, would as suddenly come down, and involve all interested in ruin. But here we know better. In New York, in cases of sudden and extreme scarcity of money, where the balance of trade has for the time turned agaiust them, money reaches a value approximating our own. All those engaged in trade (and there, credit forms its principal element) are affected at once, and are compelled by the sudden exigency to pay a rate of interest which would be ruinous if continued for any long period. There, at here, the high rate of interest at such times, bears a certain proportion to the general profits of business. At such time, credit depreciates in the same ratio that capital, that money appreciates. There too the value of money is kept within certain bounds by the mccumlation of capital, which at such time ii boarded by the timid holders, until the point is reached when, by the inevitable laws of trade, it seeks a vent and reduce* everything to a level with the rest of the world. Similar causes produce similar results in all commercial nations. In England, for example — at preient the most highly commercial nation in the world— during the speculative rail-foad phrenzy, capital was absorbed faster by such enterprises than it could ba supplied, and the rate of in tare it rose to 1, I J, and 2 cent, per month— which, for England, are higher rates of interest than 20 f cen\ is for California ; for England has accumulated ub much, or more capital than all the rest of the world beside. But the causes which produce the high value of money in California, arc not to be sought for in any speculative movement either in merchandize or real property. It is simply occasioned by a scarcity of capital. One or two hundred thousand persons, with all the wants of a highly-civilized people, have been suddenly landed in a country vyhich, from the nature of the case, is not capable at once of supplying these wants. Although the supply of gold is apparently inexhaustible, it cannot be realized by these miners as speedily as would be required to supply capital necessary to carry on all the multifarious business of this widelyicattcred community. It results from this — that for the time, money is in the highest demand, and pays a profit proportionate to the value of labour and to the general profits of eveiy branch of industry and trade. The business of life here hurries on with a mo> men turn unequalled in any other community. "Our actions are our epochs." For here certainly, " existence does not depend upon time," but the events of a man's life mark his career more indubitably than the current days and hours—and more of actual exUteuce in crowded into a month of California life than in a whole jear passed in other countries. Loans here are negotiated for a mouth instead of a yew, upon the security of real property. Houses are here rented for a month instead of a year. Labour, the foundation of all capital, regulates in this at in all other things, the value of capital. If labour is worth one dollar per day at home, it is worth from six to sixteen dollars here. If money is worth 5 per cent, at home, it is worth from 6to 12 per cent. here. It is therelore evident that the value of money bears a not unnatural relation and proportion to all other values ; and as we are in a state of constant transition, ttyeie rela» tions gradually adjust themselves to the rest of the world. It is certain, labour bears a higher value here than in other pirti of the world. Long may it continue to do so— for in this we have the moit certain, security fvr

all the othnr valuei we poisess. It is also gratifying to reflect that in no other couutry ii labour 10 respect" able. Long may it continue 10 ; for this moral consideration, combiued with the materiel, gives greater security to all the valuable interests of society, and will contribute more to the social elevation of our community than any cause poseeised by any other commonwealth in the world. We are satiified to draw such flattering conclusions from a circumstance that to the rest of the world would teem pregnant with, the most fatal consequences. We are latisfied to believe that the high value of money in California proves a partnership of interest in all claues, which will work out tbe most beneficial result! for all ; and that what in other quarters would surely infer some radical defect, is but a proof, paradoxical as it may scein ( of a certain and widespread prosperity.