The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-06-10
Financial BlunderIng.


The facts which have been brought out rela-
tive to the sales Of gold by the government,
and the reasoning Of the Secretary OF the
Treasury and his subordinate, Mr. Van Dyck,
on the subject, present as remarkable an ex-
ample of financial laundering a. we have ever
known. The whole proceeding and the logic
of Mr.. McCulloch in his report to Congress
show that . man whose idess are limited TO
banking business merely, e. 70 stock opera
lions, however good banker or stock operator
he may be, may know little Of the question Of
finance in national or statesmanlike point Of
view and may commit the greatest mis-
| takes.
With regard to the sale Of thirty-fve millions
and upwards of gold in the month Of May, by
order OF the Secretary, let us look at the motive
or policy and the consequences. Mr.. McCul-
| loch says" My Instructions given at various
times to Mr.. Van Dyck, have been to make no
sales except for the purpose of supplying the
! Treasury with currency, OF for meeting the
necessary demands of commerce or preventing
| successful combinations either to impair the
national credit OF to produce serious fluctua-
| lions in prices" The first reason given "for
supplying the Treasury with currency" would
be proper enough and the object quite within
the sphere Of the Secretary's duties, II the
| Treasury Department needed currency more
than gold; but we confess we cannot see how
and when the Treasury could be placed in
| such q condition. We cannot even imagine
under what circumstances the Treasury need
want currency. 1t might want money, that
is to say its Golfers might under GER
tain though very improbable circumstances
be empty; but SO long as it has any means
there need be no difficulty about having
currency. Treasury notes, bonds or author
lied loans will always bring currency, and
if ever by possibility there should be
temporary need of it small amount Of gold
given for the sale Of this enormous amount Of
| gold Is the true one, namely, for meeting ne
ccssary demands of commerce or preventing
successful combinations either to impair the
national credit or to produce serious fuctua-
tons in prices" AS to selling gold to prevent
the national credit being impaired, that is
very vague idea, thrown in to cover up the
/
millions Of gold or the withholding it from sale
| will not affect the national credit; that stands
4 upon frmer foundation. Indeed, if the ma
tional credit could be affected at all by such an
amount Of gold 1t would be better preserved
by having the gold in the Treasury than by
parting with It The truth Is Mr.. McCulloch
went into the market as any Wall street specu-
lator would 60, to influence the price Of gold in
order to prevent "serious fluctuations or sue
cessful combinations" and, rs he thought, to
meet the necessary demands of commerce."
Now, the first question that arises is, by what
authority does the Secretary Of tho Treasury
| transform himself or the government into bull
or bear, as the case may be, to regulate the
private transactions of the gold operators, stock
| jobbers and merchants of the country! He
seems to forget that he is not banker now and
| that he has no right to use the money Of the
government upon his own judgment in any
such transactions.
Rulling or bearing gold or stocks Is not the
business Of the Treasury Department, even If
the Secretary were match for ell the cunning
and deep laid schemes Of the gold and stock
gamblers. But what has been the result of his
Wall street operation. Did he keep the price of
gold DOWN. II went up after the sale day by day
till it reached fifteen per cent higher than when
he sold. II is said that gold would have gone
higher than this IL the government had not
entered the market and sold VIXEN il did sell.
We doubt this On the contrary it Is reason
| able TO suppose the sale and consequent expor-
tation Of the precious metal was mainly the
| cause Of the rise. So long as 1t IL known that
there is large amount OF gold in the Treasury
and in the country its relative value will be
| diminished. But suppose it had gone up tenn
porarily, who would have been injured The
transactions of our internal commerce are not
paid for in gold nor regulated by 1t, and neither
the government nor the people at large would
have suffered in any perceptible degree. 1t
would soon have come down again and
the temporary rise might have had the
| good effect Of checking excessive importations.
The only parties benefited have been the
banks, governments and people Of Europe.
The gold Mr.. McCulloch sold at loss to the
nation Of some five millions Of dollars, as APP
| pears from the rise afterward has been, doubt
less, Of immense benefit to Europe. The
greater part has been exported, and It will
| save those old countries which are over
whelmcd with debt and difficulties from great
evils There Is no necessity, however, for us
to study their interests or attempt to prop up
their decsyed and falling systems Of commerce
and government by an improper use Of the
vast resources Of this virgin country. Still we
do not say II was necessary for us to have this
gold, for II is not necessary as money, and il
an article Of commerce, just as cotton, an
article which we produce to the amount Of
fifty millions year or upwards; but we say
that II should not be sent away when Il can be
used against MS and that the Secretary Of the
Treasury has no right to speculate with Il on