, 1865-11-29
Financial Policy OF. tho Government.

In The market rnlue Of Government securities
and the advance in the price OF gold, to tho
cu5tnilment OF the currency, By funding s59--
ooo, ,ooo "a interest pearlng legal tenders into
long bonds, ut 105. The operation, 1t says,
produced 3 Temporary strinsency In the mon.
ey market, and compelled number Of indi-
riduals and banks to turn Tho Government!
securities they held into money. 81 This in
voleed decline In seven-thirty notes, which
were originally taken at par, less u fractional
discount, to 06 per cent; md in the new lvo-
twenty bonds, which were subscribed Tor at
los, to 90 per cent. The fall wonld have been
heavier but for repeated ot1lclal Assurances
from Washington that no further Proposals
foy Funding would be Issued prior 10 the
meeting Of Congress-
HarpeT's paper then goes On to say TINT:
Should the Secretary reitcrate, in his re-
port the opinions expressed in his Fort
Wayne speech, and call upon Congress to
authorized further conversions Of currency
into long bonds, with view TO the perma-
ncnt Withdrawal of the former from circula-
tion. the result Will, OF course, be further
decline In the market price Of Government
securities. No man possessed Of ordinary In
bonds, or Tcn-Forty bonds, or Seren-Thtrty
notes at present prices when he learns that
further issues Of United Statcs bonds are
forthcoming-and forthcoming in a way
which will involve stringcncy In the money
market, and consequently depreciation in tho
There will be o rush to sell, and possibly
panIe. TO what point Government Sc
curities would decline in this. event, 1t
is difficult 10 foresee- The fund.
ing Of 51,00o,00 OF inert interest. bearing
notes caused Fiye-Twenty bonds to fall from
103 to %. The funding Of a second lot OF
fifty-milllons might depress the bonds to VI or
95, and third batch to % or even lowe,. It
must be borne IN mind that the first Pro-
posal for Fundinga' took the fnancial com
mmity rather by surprise, and that very few
persons realized what would be its effect,
Had the mixers OF the first ffty millions Fund
Ing Loan forcseen It's effect On the money mar
kct, and consequently on the price Of Gov
1c3 had the holders of Government bonds
and notes throughout tue country foresccn
the result, they would have hnstcned 10 be
beforehand with the Treasury Department,
md would have placed their securities In
market
"A decline however sudden or severe-in
the price of Government securities, seriously
Us It might embarrass the Government and The
natfonal banks, would perhaps be cheerfnlly
endured were It accompanied by CORES
p0nding decline In the premium On gold, and
l.. r
IN Tue markell pl1ce o. eonmom4es. But II
teems by no means certain l1at The funding
process recommended ~ Inc secretary OF The
treasury IN us Eort wayne speech insurcs
iali m gold. Nhe9 the Proposals for
Eundlng- were issued gold Vas IL when
etnnding substantial reduction of $5o, ,000, 900
in the lcgal-tender currency, and none
tary pinch which caused Government securi-
eles 70 i9a aam Stsa pSt cent, goia rose instead
use is,e, aIaaa Jna e9oss a9nt,aoa ea'ngl
nrcttr Jis.ni, ~ oTn,,,r 1hio aonr,s,v nth,r
Wisc ihon nnnn Il the theory sn fhat Nh 1souSa A.
1arrc do nj bc,;evc in tis ohi1;tv ~ ~ e. y.
tcTioI deeTcc md rn;Jed hv nest - nu a
are led to beiieye that spasmoi;c and yio1enf,
Efforts made bv the Treasurv DenoTfnoant -
restore the currency 10 q specie STANDARD viii
IN effect, operate 10 debase it still further
Are there any grounds for believing that