The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1861-08-13

1 l unknown. The reorganization table givea Oil ma
tives of the United States, 8 of England, l24 Of
Ireland, 81 of Germany, of Scotland, and the
balance Of various foreign countries.
The cotton market very firm yesterday, on basis
Of 18c. for middlng upland with sales of $500 5000
bales. Flour in fair demand but scarce, and &c
| 10c higher. There very little wheat offered, and
the sales moderate at rising prices Corn not
plenty and sound lots shade dearer. Sugars were
in less demand but were Ied stifly. Coffee quiet
Provisions less sought AFTER and pork declined to
$5 12t ass a7l for NESS and $40 IS for prime, with
sales OF 600 bbis. at these quotations. Shipments Of
produce for Europe limited, and rates freight
were depressed.
The Government Loan i'm Wall Street.
Ignorance OF Congress-Prospects OF y
Panic.
Secretary Chase has been spending several
days in our city, endeavoring to negotiate a. loan
with the moneyed men in Wall street, but owing
| to the strict features of the law passed OF the
extra session of Congress he has thus far met
with little or no encouragement. The law un-
der which this loan is asked prevents the least
modification in terms on the part of Mr.. Chase
but, on the other hand the Wall street fnanciers
will have to take it at the terms fixed by the
government, or not at all. Such is the ignorance
exhibited by Congress on this question of loan
that a refusal on the part of the moneyed inte-
rest to acquiesce in their terms is likely to pro-
duce one 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. Lot us for moment
glance at the provisions of the law and view the
financial precipice upon the brink Of which we
are now tottering
Among the bills passed at the extra session
OF Congress was one authorizing Secretary
Chase to borrow $25O,OOOO 900, either by issuing
seven per cent bonds, which he is obliged
to sell at par or, falling to find pur-
chasers 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 fnanciers being able to obtain United
States skies, already in the market, at eighty
eight cents on the dollar, refuse to take either
the new issue of bonds or Treasury 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 Secre-
tary 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 calling for money, remains with his
hands tied His estimates are for 10000, 900
for the next four months operation, or at the
rate of sl,oeo,ooo per day. The bankers refuse
to furnish that amount at his terms-the only
terms on which Congress has permitted him to
receive r-and he cannot abate one iota il 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 govern
ment, as borrower, in an exceedingly
critical position. They have arranged the pro-
visions of the loan that they aS.ked for on
such terms that the leading fnanciers of the
Union will not touch it, and the very means ne
cessary 10 prosecute the war are thus apparently
cut off and the government crippled Congress
has adjourned, and c1nnot be convened to
meet the emergency and change the terms to
suit Wall street in Cine 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. Fortu-
nately there is one other alternative left for
Secretary Chase; but the resort to that opens
the monster financial precipce, and precipitates
into it all the banking institutions of the ma
ton, the greatest as we'll as the least, with
sweeping and universal crash: not one can
escape.
There are at the present time upwards Of two
hundred and fifty millions on deposit in 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 paying from
five to six per cent interest," majority only
five per cent. We understand that since Mr.
Chase finds the financiers Of Wall street will
not respond under the terms upon which the
loan is offered, he proposes to issue the Treasury
notes in denominations that will answer the
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 government. He will thus
offer to the industrial portion of our citizens
an opportunity for increased interest and bet
ter security than in the banks. In the place Of
five per cent in institutions based on public
confidence, they will receive seven and three
tenshs per cent, .or two and three-tenths per
cent increase, and the very best security in the
world. The moment that loan is offered on
that, or Napoleon's plan, there will be
rush upon the banks without parallel in
our history. The superior inducement
of increased interest and better security
will cause those who have laid their money
by in the savings banks-the small depo-
sitors, and those whose funds are lying unem-
ployed 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.