Wilmington journal. [volume] (Wilmington, N.C.) 1844-1895, 1853-04-29
From ths United st;ltes Economist.


when the evils which grew out of the connection of
banks with the government were gross, palpabe and
indefensIbe, meant to be closely woven and as
sringenr applied as human ingenuity could devise;
10 prevent the pablo money from being in any way
loaned made the basis of loans to any person or
any number of persons. The whole spirit of the law,
adopted at time when of loans had inflicted
indelible injury upon whole generation, direc-
ted against any future of the public funds for spec
uIative purposes. The United States Bank system
had been tried and universally admitted TO have been
corrupt and corrupting, ending in utter and complete
failure. The pet bank system had also been tried
and found so disastrous, that those banks which had
been the cusodians of the funds principally
those which Were most opposed TO lis continuance.
many of them utterly refused to take the public money
on any terms. The establishment of Government
Treasures for the reception and safe keeP'nS met
with almost universal approval, and at this moment
no measure of the federal government is more popu-
| lar with the commercial community than probably
this Sub Treasury law. Yet the Secretary of the
Treasury has broken through the law, set al naught
is restrictions defed its penalties, and loaned the
public money to bank and broker for all that appears
on the face of The transaction up this lime, for mere
purposes of speculation. The whole transaction is
strange one Mr.. Simeon Draper, who was the Dor
rover of this money from MIR. CoIwn was original
" dry goods dealer, and is known TO the political
history of the country, in connection with the ''Glen
worth operation of the hard cider campalgne He
has since been politically active and his name is off,
cay connected with the extraordinary sale of certain
city property, which has been recently overhauled-
Mr.. Draper was dry goods auctioneer until Mr.. Cor
win had got possession of the Treasury Department.
He then TO utmost surp Use of the brokers body,
applied for admission to the board, and became regu-
lar stock broker, at the same time holding weekly auc
ton sales Of stocks at the Merchants Exchange. and
being large negotiator for all sorts of Western fancy
railroad stock. his gentleman it is who has succeed
ed in borrowing from Mr. Corwin, these fancy
stocks. sums of money ranging from 100000 10 ST.
700 900 wherewith TO purchase United States per
cent stocks And his adoption of the business of
broker was simultaneous with these loans him from
the government.
| The pretentons set forth by the defenders OF this
law is that it necessary 10 disguise the transac-
ton in order that the knowledge of the fact that the
government was buying nigh: not put up the price.
This is mere preense, an excuse so msy as TO a.
mount admission of the utter indefensbility of
the transaction. Admitting for moment that the
government could save something by buying private
ly rather than publicly is that reason why cabinet
officer should set the example of disregardng solemn
~ enacted law, and treating conempuously the will
of the nation expressed in the act of Congress q?
Of which is the most value, the integrity of the law
and the authority of Congress the palry saving OF
perce, which The friends of the Secretary pretend he
made by breaking the law and setting example OF
disobedience 1t is not true, however, that penny
was saved by this clandestine operation. In the first
place the stock not purchased but after the mo.
ney had served lis purpose in the hands of the fbor
. rover a part returned whence came. The pub
TIC ndu incurred great rSk Oy loan OF money on IAN
cy railroad stocks, without any benefit TO the Treasu
ry II precisely such risks that the Sub Treas
ury law enacte | to avoid Thus the amount OF
money in the Treasury is SIT: 100000, which al
per cent gives 81 O2l 900 loss of interest which
Congress chooses incur rather than run the risk OIL
oosing the public money. The Secretary breaks the
law and loans the money, as II is aiedged 10
, few thousand dollars.
But it is not true that there any idea OF saving
money. The stock sought to be redeemed is due in
l,1ly nj will hoor
simple notice that the stock would be redeemed
at the Treasury interest off, would, in the state of the
market which has existed during the past few weeks
have broug every disposable dollar TO the office fol-
redemption. Money has been worth from 10 16 pei
en, and it is little absurd to suppose that pei
5 cent stock payable next July, would not have beer
gladly presented for payment at such juncure, if the
holder had known where; but who, of all holders O
the stock, knew that a single broker in Wall stree
was prepared 10 buy for the government? There was
no certainty that the attempt to sell per cent stock
in market where money worth at least per ct
would not force it under par On the other hand, hat
the government made public notice that par would b.
r given for il now at the Department, saving nigh, &C
tually have been made, AM the money market reev
ed by government disbursements, without any viola
ton of the law.
: There is another phase of this transaction. 1t vii
be remembered that of the principal evils which thu
'pe: banks and the public formerly encountered from
the OF the public money was that 10 make it pro
fable the banks loaned it out such securities a
/ offered. When the government wanted the money
e sudden curtalmen or calling in of those loans, dis
tressed both the banks and the public TO such degre
that some OF the strongest near falling in the op
Grafton What has been the case? Up to tn
close OF February, money was very abundant; sudden
denly general demand for specie took place, withou
any being required for export, and one of the severes
, pressures ever known took place, without any appa
u rent cause. 1t now turns out that between Mr. Ora
per and the Merchants Bank nearly So, 900 900, a
!, some accounts state, had been used in the market
Il When the administration going out of power an
demanded the money, the struggle for specie and Sc
q cuailment took place which actually broke sew
era banks, and cost the merchants of this city leas
d 81 600, 900 difference in interest.
e Again-The pretense being that the government
could not buy cheap enough itself, the course pursu
y ed was to loan the money to banks and fancy
broker, when it was directly applied in initiating th
prices of stocks, in order that the stock might be &c
IS cheaper The custom of the English government ha
= BEEN when it wished 10 convert its stock into one
lower rate of interest, to employ the bank and bro
kers to lend upon the stock in order to give it an art
=, fetal rise 10 facilitate the Transaction Financier
would be disposed to laugh if the government oane
c large in the stock market for the sake of buvin
the stock cheaper, yet sagacy such as this is lead
ID ed in excuse for a violation of law.
- Later from Buemos Ayres and Montcvidco.
l. SALEM, MASS, April 26.-By the arrival here {
the barque Peacock have advices from Montevil
lie 60 to the l4th. The United States ships Congress
g and Fredona were in port of Monevideo with trooI
y. bouud for San Francisco, They both put in in dis
ress and after having been repaired sailed on the III
v The advices from Buenos Ayres are 10 the 11th tn
g United State ship Jamestown lying in the harbc
- Officers and crew well, were also the officers an
= crew of the Congress and Fredonia
n UrquIZa was expected soon to arrive with conc;
tory IlrInC Tho cIr;