The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1865-08-18

Secretaries Chase. Fessenden and McCul-
lOch, and the Wall Street specula-
tors.
There is always some direct cause for the
financial commissions and defalcations which
occasionally break in upon the public with as
founding developments While the recent pecu-
lations, frauds and defalcatons, which have
thrown the financial community into state of
excitement, were, no doubt, brought about by
a combination of circumstances, yet there is no
Disgusting the fact that the management OF
the affairs of the United States Treasury, under
the administration of that department by Sec
retaries Chase and Fcssenden, laid the ground
work for the present condition of affairs in
Wall street. The seed was sown by those
officials, and we are now reaping the harvest.
Under the system which they inaugurated the
bankers :sad- brokers were led into plar-of
looseness in their ope,se .ious, which has gradu-
ally gone on, step bysstep, until near;J al are
involved in It. 1t will Bsfa miracle II the con-
vulsions do not prove general, sweeping down
the operatots right and lett great and small.
It is well known that Mr. Chase almost in
variably had his pet brokers or bankers in this
city, whom he kept advised of his necessities
and movements. and thus enabled them to act
accordingly. These facts were scrupulously
kept from all the other bankers as well as the
public. The favored few, under this arrange
ment, were always ready to secure the advan-
tages of the money market, and profted largely
thereby. There was no inducement for them to
follow strict financial principles but, on
the other hand, knowing beforehand what
the Secretary of the Treasury intended to do,
all that was left for them was to recklessly
jump in and reap the reward Of success. The
wilder they engaged in the speculations and
the less they were guided by natural rules, the
more money they made. Thus, having been
forewarned that the Secretary of the Treasury
was about to call in all the money on deposit
and demand another lOan-as he generally did
when the fever Of speculation was at its height
and the tide of stocks upward-the favored
few would rccklessly sell everything on the
list, and trust to their chances of buying in at
reduced price. On the top of this would come
an official demand of the Treasury, which
would tighten the money market, causing uni
tors, and trembling among the operators not in
the secret AZ matter Of course, those in
possession Of the necessary Information prior
to the action Of the Secretary, who wildly
jumped in, would coin money hand over hand.
The house Of the Ketchums was among those
favored under the Chase regime. There were
also others on that list; and it soon began to be
the rule Of all those who were excluded from
the magic secret to watch the movements of
those firms The moment that they were dis
covered pursuing any particular course, all
the others would follow suit, in the same wild,
harem-scarem and reckless manner. This in
fected nearly all the brokers, until finally the
system, or want Of system, became the rule
among the larger portion-great and small.
Thus the wild spirit of speculation spread and
increased until general recklessness was
everywhere manifested, opening the way and
leading directly to fraud as the natural and
logical result
Importance Of the Evening Exchange. Those
parties who had discovered, late in the after
noon, the movements Of those firms supposed
to be in the secret Of the Secretary of the
Treasury, were anxious to make their opera
tons that day so as to be ready for the devel-
opments which they believed to be certain to
follow tho next day. Hence they rushed to the
up town board and made themselves hoarse
with their screams Of stocks short and long.
This mode of procedure, inaugurated under
Mr.. Chase, assumed formidable proportions be.
fore he retired from the Treasury, and was
continued under the auspices Of Mr.. Fessen-
den. But when Mr.. McCulloch took charge Of
that department he abolished all that system of
favoritism, and pursued policy so plain and
definite that the general public knew just what
was coming at all times, and no banker or
broker had the advantage over his neighbor
BY having special news from the financial off,
Ger Of the government But the reckless MOI
OF doinr business in Wall street had taken
such deep hold that it became e,,tnost limos.
sible for them to change. TIE reault was. that
those who had been successful by bold opera
lions under the cyster. i;of favoritism imagined
that they low possessed the power to accom-
piiec tho Same thing without the assistance Of
I tbe Secretary Of the Treasury. They at
, tempted to get up artificial changes ip The
market by large sales and purchases
Of stocks and gold, and soon found
themselves in hot water. Some of their number
] were obliged to resort to fraud and forgery to