Indiana State sentinel. (Indianapolis, Ind.) 1861-1865, 1863-09-21
SELLING.
BUYING


BUYING. SELLING.
Ge, prem. sa9ss prem,
prem prem.
Demand notes. prem. prem.
Kentucky bank notes.. . A9H prem. 49,.
Indiana State notes..-.-. prem ..-
Orders or Washington. a. dis .--
Certificates. ........... Z9l dis. =.
Quartermasters'
vouchers, cty....... $685. 80.
Quar'erpasters'
Vouchers. countrT..... no sale. 49,.
Thompson's Reporter says of financial affairs
of the Government:
Mr. Chase has procured credits on the books of
the banks in this city for thirty five millions, ard
for fifteen millions in Boston and Philadelphia.
Drafts are to be made during September, October
and November.
The Secretary pays interest at six per cent. on
the whole amount from the 9Th inst, and pays the
amount to the banks at FIVE per cent. legal tender
treasury notes. As this is a new class of Govern
ment security. the first issued under the nine
hundred million loan act of last March, it is well
to dictionize these notes thus:
Tbey bear FIVE per cent interest in currency,
payable semi annually. BY throwing away the
accrued interest. the holder can use them at any
time for their face. the same as greenbacks. even
before thew are due. Hence we call them legal
tender interest notes
1t is now stated that the next issue of securi-
ties is to bear only 5 per cent. interest, and that
in currency; and that such issues will commence
in October, though we do not expect to see them
on the market for the public before November
We do not understand that the issue OF 5 20 bonds
is to be stopped when these notes begin to be
issued, but we infer so.
Two questions are suggested in connection
with the bank loan to the Government and these
notes. First, what effect it will have on the
money market. and second. what will be the effect
of a large infusion of these legal tender interest
notes on the currency of the ~countryf
Having money to his credit in the banks, sub
ject to draft, Mr.. Chase can safely use the bal
ances in the sub treasury, even if such balances
stand to the credit of discussing officers, and in
this way lower the accumulation in sub-treasuries
some twenty millions before drawing on the
banks This would not only keep the money
market quiet. but ease it.
On the other hand, Mr.. Chase can draw on the
banks faster than necessary, and pile up a large
amount Of sub treasures This would make a
tight money market. Thus il is that the Sec
rotary has the power to make the money market
tight or easy. We believe he will keep the mar
ket easv
We will not now argue the second question
but assert that the legal tender interest notes
will be slightly expansive in their effect on the
currency
The war being about over, what is to be the
future. in a currency and financial point of view I?
The common remark is that when the country
is at peace again, II revulsion and-a collapse will
BETA. the country, and a great contraction of
currency. and a great fall in prices must take
place. This idea is drawn from former prece-
dents, all of which 60 to prove that great expan-
sion Of paper money and credits are followed by
revulsions and contractions, involving a decline
in values.
We have no precedents to guide us in this
expansion. The paper money and time credits
that are so thick among us are Governments
issues. Individual and corporate issues are linn
tied. All precedents go to show that individuals
and corporations eau press, demand and enforce
payments; in this is the element of a revulsion,
and it is sure TO work a contraction. On the
other hand the Government payments can not be
pressed or enforced.
1t is quite evident, then, to our reasoniag, that
there will be several years of further prosperity
and even further expansion. between the estab-
lishment of a peace and the revulsion so conf
IDENTIFY predicted.
Our theory is, that peace will be followed by
great business activity, and that it will require
three or four years TO pile up an individual and
joint stock liability of a dangerous amount and
character.
During these wears the Government will retire
its demand and short liabilities, or, what is the
same thing. fund them into long obligations.
When the Government is out of the credit ring. as
it will be when il has nothing but interest money
and long bonds to provide for, and when COM
mercial, manufacturing and corporate credits are
expanded. then. and not before. we nav look out
for a revulsion.
Says one, ''the arguments plausible il suspen-
sion continues, but a resumption of specie pay
ments would certainly bring a crisis"
Well, in the first place. the Government will
not force specie payments, for political il for no
other reasons. A money revulsion always over
= - IL
~istration will be content with things as thew nov
are. This viii carry the country on upon paper
money until the snring of 1865. The then in
coming Administration will have quite enough
loads to carry without taking up the resumption
business. Still we are not sure that with peace
the country will naturally flow into specie pay
ments. and Government money will be a little
better than gold. without any effort to bring out
such a result. ia which event there will certainly
be some years of prosperity between peace and a
revulsion.
Our idea is plainly this. The character of the
expansion. in both money and time credits, must
change from a Government to "a corporate and
individual liability. before the revulsion comes.
This will take some years with any party in
power.
We grant that the Government can, by great
taxation and a high scale Of interest on long
bonds. resume specie payment, and force a gene
raj resumption, in which case the revulsion
would follow even on the present small individ-
ual and joint stock liability. But what Admin
istIation would venture upon such financial and
political suicide?
The weather has been quite warm, and there
having been a good deal of rain, vegetation is
going on well, and corn that was backward, and
which had not its growth arrested by the late
frosts. ia doing well. Pasturage is improving.
Flour has not changed essentially. although
there was a better demand at the close. under the
influence of the news from New York. Old
extra is in demand at 81 05 IN 81 25. and trade
brands at 81 rs to SIS SO. Wheat has been in
pretty good demand all tie week. Corn is scarce
and the supply wholly inadequate to the demand.
Farmers are holding back the'- old corn. ufder
the impression that prices will rule much higher,
because of the frost. Oats have likewise been in
active demand. and prices of both corn and oats
advanced consequently. 1t will be seen from the
agricultural news we give this week that the oat
crop is unusually good in some localities, fair in
others. while In some places it is q failure. The
crop, however, will be much better than it was
last year. and the quality superior.
Whisky advanced to 46c. and has been in good
demand. and the receipts light. 500
Butter and cheese unchanged.
There we're inquiries from the East regarding
cloverseed, and holders put up prices to So %
There could have been a considerable amount
sold at IS. The stock of old seed in the market
is large, and we understand that the crop this
wear IL an excellent one. Timothy is worth
about 80 so. Flax is wanted at 81 SO. but the
"independent' seed has not yet commenced ar
irving.
There has been a good demand for old city
packed mess pork, and 1000 barrels sold at $lo.
$40 l2b and $40 IS, but the latter rates were
paid In cases where a specific brand was designa
tod in the ordor "a IL Ia In most cases held al