Daily Nashville patriot. [volume] (Nashville, Tenn.) 1860-1862, 1861-08-18

Secretary Chase has been spending several
days in our city, endeavoring to negotiate
loan with the moneyed men in Wall Street,
but owing TO the strict features of the law
passed at the extra session of Congress be has
thus far met with little or no encouragement.
The law under which this loan is asked pre-
vents the least modification in terms on the
part of Mr.. Chase; but, on the other hand, the
Wall Street fnanciers will have to take il at
the terms fixed by the government, or not at
all. Such is the Ignorance exhibited by Con-
gress on this question Of loan that a refusal
on the part of the moneyed interest to acqui-
esce In their terms is likely to produce enc
of the greatest panics known In the history of
this or any other country, and render many
of the securities carefully slowed away in
vaults worthless trash. Let rs for moment
glance at the provisions of the law and view
the financial precipice upon the brink of
which we are now tottering. -s--sf
Among the bills passed at the extra session
of Congress was one authorizing Secretary
Chase to borrow S250,000, 900. either by issu-
ing seven per cent bonds, which he is obliged
to sell at par, or, failing to find purchasers at
par, another provision of the law gives him
the power to issue Treasury notes of various
denominations, drawing interest at the rate
of seven and three-tenths per cent These he
is also restricted to selling at par. Now the
Wall Street financiers being able to obtain
United States sizes, already in the market, at
lightweight cents on the dollar, refuse to
take either the new issue of bonds or Treas
ury notes for par unless they are made to
draw eight per cent, which they consider the
present market rate equivalent to. At this
point We find the Secretary of the Treasury
at a standstill. He can no more fix the rate
OF interest at eight per cent than he can sell
the bonds or notes for less than par He is
unable to compromise with Wall Street upon
either terms, but, with the government cali
ing for money, remains with bis hands tied.
His estimates are for S120, 900 for the
next four months operation, or at the rate of
1000, 900 per day. The bankers refuse to
furnish that amount at his terms-the only
terms on which Congress has permitted him
to receive it-and he cannot abate one iota
if he would. What, then, is to be the result?
The ignorance of the politicians in Con-
gress in regard to the financial affairs of the
country has thus placed the government, as
a borrower, in an exceedingly critical posi-
ton. They have arranged the provisions of
the loan that they asked fer on such terms
that the leading financiers of the Union will
not touch it, and the very means necessary
to prosecute the war are thus apparently cut
OF and the government crippled. Congress
has adjourned, and cannot be convened to
meet the emergency and change the terms to
suit Wall Street in time for the requirements
OF the government, owing to the length of
time necessary for the proclamation of the
President to be issued under the constitution
Fortunately there is one other alternative
left for Secretary Chase; but the resort to
that opens the monster financial precipice,
and precipitates into it all the banking insti-
tutions of the nation, the greatest as well as
the least. with sweeping and universal
crash: not one can escape.
There are at the present time upwards of
hr.r,. Rtfr-
the savings banks of the Northern States, to
say nothing of the amounts on deposit in
other banks by small depositors. These
sums are the savings of the Industrial classes,
upon which the savings banks are paving
from five to six per cent Interest," majority
only fve.per cent. We understand that, since |
MIR. Chase finds the fnanciers of Wall street +!
not respond under the terms upon which |
the loan is offered, he proposes to issue the |
Treasury notes in denominations that will |
answer the purpose, and proclaim popular |
or peoples loan on Napoleon's plan. There |
is no question but that in this way the loan |
will be rapidly taken up, at least fast enough /
to meet all the requirements of the govern
ment. He Will thus offer to the Industrial /
portion OF our citizens an opportunity for |
interest and better security than /
in the banks. In the place of five per cent. |
in the Institutions based on public conf |
dence, they will receive seven and three |
tenths per cent, or two and three-tenths per /
cent. Increase, and the very best security in /
the world. The moment that loan is Of /
fered on that, or Napoieon's plan, there will |
be a rush upon the banks without parallel |
in our history. The superior inducement of |
interest and better security will |
cause those who have laid their money by in |
the savings banks-the small depositors and |
those whose funds are lying unemployed in
the other banks-to Immediately call in their |
money and invest in the Treasury notes, and |
receive the benefit of the Increased interest, |
which to them will be no small item.
This at once opens the doors for sweep /
ing crisis amongst the banks, which, of IT.
self will make the rush for the Treasury |
notes all the greater, as the only safe securi-
ty. Depositors will be found demanding of |
the banks the sums due them; the banks, in /
turn. will be compelled to throw their mort
cages on real estate, bonds, &C., on the mar
ket to meet these demands, thus increasing |!
the excitement and hurrying each other In |
confusion over the financial precipice with
greater CONSERVATION than that which char
acterized the army in its fright at Bull Run.
Thus has the action of Congress, in refusing /
TO permit the bonds or Treasury notes to be /
sold at less than par, brought us to the verge |
Of an enormous financial panic. Should Wall /
street decide to take the loan at the terms |
ixed by Congress. the storm may be avert /
I'd; If, however, they persist in their present /
decision, the popular loan will be resorted /
10, and nothing can prevent their banking
Institutions from Being drawn into the mael-
'trom whose gurgling waters already await
hem.