Daily Ohio statesman. [volume] (Columbus, Ohio) 1855-1870, 1867-04-22
vol. xXxIV.
The Tighiness.of money.
IFrom Harper's WeekIyl

The stringency that has bese the money
market for considerable time still con-
tinuess and borrowers still find difficulty 10
negotiating loans, except upon the best
securities other than Governments are u -
desirable; commercial paper is most care-
I fully scrutiniZed; and few will advance on
bond and mortgage more than one-half the
value-of the security. even the most eligi-
Bile city property. The rate of interest,
however, is not oppressive .
| There are many of our. business men<who
look for decided Improvement soon, just
as they have been waiting these six months,
patiently but in vain, for return OF the
activity of previous years; but they have
built their hopes upon a sand-bank. 1t is
quite possible there may be better feeling
ere long, and the money market become
gradually easier. It cannot be expected,
though, that the relief will be permanent,
for the market, lis always yspasmodic. and
susceptible to the slightest and most mys-
terious influences. 1t may at any time
jump from per cent. per annum to 3 per
cent. month without apparent satisfac-
tory cause, as it did in June, 1854. More
over, it is controlled just now by the want
of confidence which has so long prevailed
throughout the mercantile community, by
the general feeling of uncertainty, the un-
defined apprehensions, aud the whispers
that go round, but which nobody can ex-
plain 1t is true that the Government has
sold gold, and thereby Withdrawn a con-
siderable amount of greenbacks from cir
culatiOn; also that the banks, catching the
prevailing apprehensions OF continued
stringency, are contracting, calling in their
loans that they may get higher rate of
interest by -and-by. This accounts, in part,
for the scarcity of money. The least IA
vorable feature of the case, however, is
that depositors are Withdrawing their idle
balances from the banks to very large
extent. 1t is estimated that the deposits
were drawn down five millions last week,
and thelegal tenders nearly as much more.
We know of one single bank that was thus
depleted to the tune of $750.000. ta
New York city being the great financial
centre of the Western world, as London is
of the other hemisphere, is naturally the
great leading centre. While business is ac-
tive, immense sums of money are conCinu-
ally flowing here from all parts of the coun-
try, seeking remunerative investment; but
when business becomes dull, from any
cause whatsoever, these moneys can not be
employed; the idle balances are Withdrawn
because they yield nothing. No matter
how thriving or auspieious the state OF
trade may have been in other quarters, ap-
prehension here begets apprehension there,
and depositors will prefer TO have their bal
ances under their Immediate control, or
invest them in Governments, which are
sure aud profitable. This drain upon our
banks and banking houses helps very much
TO render money tight; but the cause of
this drain, as we have already stated, pro-
ceeds from the want OF confidence In the
community. There is conviction, well
founded, among the shrewd mercantile
community (apart from the financiers of
Wall street), that the Initiation of the cur
reucy eliminated in the spring and sum-
rner Of 1866, at which time the Secretary of
the Treasury, backed by an act of Con-
gress, publicly announced the policy of
contraction, authorizing reduction OF not
more than four millions per month; also,
the national banks had issued all of their
three hundred millions of currency which
they were legally authorized to do. Well,
then, the summit having been reached, the
tendency in everything is downward. EX-
cepting in real estate, tire prices of all de-
scriptiOns of property and merchandise
have very materially declined-and they
have declined gradually and calmly, dis
tressing some houses, it is true, but still
creating no disastrous perturbation of
trade and finance. The fact that they have
done SO relieves the mind of the apprehen-
sion that there is to be a general financial
crash or monetary panic. 1t nroves to the
contrary. We are not at panic prices now.
Commodities are reasonably low compared
to what they have been for four years
past. gss s aJz.i ..Es ~ alec|
Still, the season Will not pass without
trouble. Trouble may come from quarters
least expected. On the 1st of j une the Bank
rupt law will come into operation. Many are
no doubt preparing to take advantage of
that law, and the failures and suspensions
which may then be announced will be start
ling. Many a strong house which has Civ
en extensive credits may find its debtors on
the bankrupt list, and their assets, which
had been considered undoubted, vanished
like smoke. Then what becomes ofthe sup
posed very strong brick houses. One failure
carries many, like a row of bricks which
schoOl-boys set up to tumble down. Shrewd
and crafty men, both debtors and creditors,
are shaping their course to meet the opera
ton of this law. Such persons as have kept
their accounts close, who have no overstock
of goods, and who have not foolishly spec
.ulated for rise in stocks, in spite OF every
possible presage against so doing, need not
trouble themselves about the future. There
is considerable portion of the business
community whose position is very strong.
There will weather the gale. But among
borrowers and overtraders who are unable
to obtain accommodation there will inevi-
tably be trouble, as we have long predict
ed. The probability is, that business will
now gradually tizzle out, and that dull
summer will be succeeded by a revival in
the tall. as-t -1
The Coming Storm.