The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-12-15
Gun wAsMMs1sM CORRESPONDENCE.
The Financial Situation.
WASHINGTON CrrY. Dec.


WASHINGTON CrY, Dec. Is, 1894.
When skilful physician II called to prescribe for
sick patient he always makes careful diagnosis Of the
case, and inquiries into al the symptoms OF disease
which have boon manifested by the patient and traces
back from the effect to tho Now, should b
In finance On about the 2sd and oath OF last month
the money market OF New York was laborug under
violent spasms and convulsons unusua OF late that
many Of the oldest merchants and bankers were AZ
loss TO divine tho causes. and panic prevailed But
now, since the effects have been traced back 70 the
causee easily discover that the maady is not with.
out remedy. but only the result OF temporary blundsr
ing the part Of the chief nurse the Secretary OF the
Treasury.
altogether the Certificates or Deposit which had
been in general use by the banks OF New York
city in making their settlements through the
Clearing House, and commonly known s'Ciear
ing House certificates" and hence they were
all subject TO presentation for .greenbacksp at any
moment But the banks having little or no immediate
demand for the 'greenbacks" and finding the certi-
ncates convenient did call the secretary i'm
mediate redemption, aud the secretary finding his
'greenbacks In the Sub Treasury Idle and drug CAP.
ceed about $4,000 900 In about six weeks imc which
should have been done by degrees during the previous
seven months intended by law to have been done.
money market in November Mex, came the eisburse-
OF about $2i 600 900 In gold as interest of tho
first three OF United States iyetwenties MAY
November due tho lst Of that month"; which caused
IN active demand Tor 'greenbacks 70 buy and carry
this gold; which, like two edged sword, acted on
prices; first, by s-ge " increasing supply beyond do
mand; and second In limiting tho whcrewith TO
buy. Hence the second cause OF the spasns Novem
ber and tho immediate OF tho decline la gold and
in the prices Of provisions generally.
The receipts from customs the Ightest OF any
nd re.
venue barely sufficient to pay the current
OF the government
move the crops Doth In the West and In the SOUTH
springs up, and 10 imperasey urgent the banks In
large amounts and tho banks rush tho Sub Treasury
with their certificates Of deposit past due And the Secre
ary draws hastily for his balances In toe national banks
"on call" Hence tho third and greatest cause OF ali
which usually follows large supplies being forced
unwilling markets and, incidentally tho sale Of gold by
the government 10 supply the immediate demand for
greenbacks beyond their other for the time
being Now ar we have charged the Secretary with .
blunder. may we not explain As the law OF April,
1866 allowed him TO the legal tenders by only
$40 900 0o0 for the first months, 81 600 900 per
month thereafter, should he not have foreseen the
damage which would arise by tho cancelng OF tho
whole amount In six weeks tmey and the cspc-
cially when he ought certainly to have known that
very large and active demand would arise In November
both for moving tho crops and In carrying the large
amount Of gold paid out for intereslY
There IN not an intelligent banker in New York hut
knew OF there large demands that OF thu year
and they had believe that the Secretary would
nave provlueu tor ihem IN ADVANCE HIS not having
done 30 in time to prevent the panc proof Of de-
inqnency somewhere. Az he WAS Liable 10 be called on
at time for the money due the certificates OF Octo
Der 40 tsomc S25 600 900 morcI, that at least
should have been hand that day. In the sub.
treasury, and should have remained there called
for; and this In addition to all otherwise appropriated
But these stnrbances. having put up the ratio OF in
erost from four 10 Ave. 10 per cent and reduced
current prices OF gold, stocks and produce, at
ruinous rates 10 holders. over; II
prudence shall guide the future management Of
tho Treasury With money plenty md increasing in
snpply-in london At four Pfris two and half and
Frankfort NJ or below threcthcre Ia indncement
carry home balances which duo from those
cities. They bc probably employed here and
the return tide Of currency already setting strong from
tho West will be soon coming from tho South, when an
abundant and cheap money market will hc 10 ol-
low The Secretary abstain from selling gold
Mt present. he cannot make has conversions Into long
gold bonds lac prevent the latter coming home
for realization of the difference Of home and foreign
prices
Hence we infer be win sell gold this month,
and with abon S40 900 900 currency In the sub treasury
and the current receipts from internal and
TOMS he viii easily met all demands until tho 18th ~
January, 1867, when the New YORK market will probably
DO more than abundant