Green-Mountain freeman. [volume] (Montpelier, Vt.) 1844-1884, 1869-07-21
Government as a Banker and Broker.

vailed, and the value of speculative COM
modities which depend closely upon the rate
of interest have fluctuated widely.
The key of the situation has been all the
time in the mind of the Secretary of the
Treasury. The stringency was caused by a
scarcity Of money in the banks he alone
haa the means of relieving it. All specula-
ton. therefore, turned upon the probability
that he would in some way pay out large
amounts Of money from the Treasury.
On Thursday last, the pressure for money
was peculiarly severe, and the dependency
Of men who relied upon action by Mr.. Bout
well to relieve them was increasing. On
Friday there was a sudden change of feeling +;
leading spectators appeared as purchasers ;
and confidently asserted that on the next
morning the Secretary would announce an
immediate purchase of So 900 900 of bonds
to aid the money market. From the depres-
sion of Thursday to the excitement Of Friday
New. York general stock alone advanced
eight per cent. The actual difference in the
market value Of the securities actively sold
in Wall street, produced by this rumor, was
not less than forty or fifty millions of dollars.
On the next morning Mr. Boutwell, did
announce the immediate purchase of three
. millions Of dollars of bonds, and he has
since followed this purchase by an order for
a similar one each week of this month, As
n result the speculative markets. orc buOyunt
+thc bulls (" iubfIant. the % bears - in
mourning. The profits already secured to
the bold and confident holders of New York
Central Railroad stock alone, sin ce the an
nouncement Of this policy of relieving the
money market by purchases o fbonds, amount
to not less than five million dollars, and
have been wholly the result of this action
by the Secretary.
New Mr. Boutwell, is a gentleman whose
word no one will question and we have
seen a letter from him explicitly affirming
that he communicated his purpose of pur-
chasing bonds last week to no one, in advance
of the public announcement. The action of
the Spectators, therefore, was founded on
conjecture and its success was simply a
lucky accident. But it is a suggestive acct
dent. Was the conjecture founded on words
dropped by the Secretary, and mistaken for a
hint2 was it suggested by the expression of
his face ? the books or papers he was reading?
the information he was inquiring for ? the
person he was consulting? What is to be
said of a situation in which immense fortunes
are to be made by successfully divining the
thoughts of a single mind an hour or two
before they are published?
The Posi- very naturally draws the infer
ence from these facts, that there is great
danger that the power over the money mar
ket which Mr.. Boutwell, thus possesses will
be sometimes corruptly used that human
nature is not pure enough to resist the
temptation which these speculations may he
able to offer and that if Mr.. Boutwell, him
self does not yield, it will be quite impossi-
bic for him to keep himself surrounded by
subordinates who will not profit by the stu
alton. This is no doubt true, but, to our
mind, it leads to quite a different conclusion
from the one to which the Posi- evidently
comes. The remedy for this evil is not in
the Treasurer's declining to buy bonds, nor
in his keeping a determination to buy them
from the public until such time as he sees fit
to make known that determination If Mr..
Boutwell, has more money on hand than he
has other use for, he can put it to no better
employment than in buying mp the interest
bearing debt of the government, and be
should do this. 1t might possibly be better
for him TO do this, in regular amounts, and
at stated times, 50 that everybody might be
advised Of it; yet it will inevitably happen
that he will, even thus, have at some times
more funds on hand than he needs, and this
will warrant him in making IN unusual pur-
chase Of bonds. Such a state Of affairs may
be unlucky for the 20 bears " Of Wall street
but if they will persist in stock speculation
which is at the best only a species Of
g~ambling-they must occasionally expect a
turn of luck. Gamblers cannot always win.
The remedy for these fluctuations in the
money market,--as we have had occasion
more than once to say-will be found, we
confidently believe, only in a system of free
banking. Now the volume Of currency in
the country is exactly known. 1t can be nc
more, and it can only be reduced in volume
by the amount which the government may
have on hand at any moment, and by the
tricks of the spectators who sometimes lock
up a few millions to create a stringency in
Wall street. This must inevitably lead t.
just such speculations as the Post deplores
But let a system of free banking be adopted,
and not only the government but individual:
lose at once all control over the volume oil
circulation, while every bill-holder yet re
mains abundantly secure, as no bill is issueC
without a pledge of government bonds for it
redemption. The &" bears would hav,
DduhH, . hGll DC IL JULES duu CdCl
would become comparatively harmless %
at least could only prey on the other.
This would also be the only remedy for
or rather the only preventive of-the corrup
ton in the treasury which the Post believe
the present action of that department is sur
to develop. If, for any reason, money wa
then accommodating in the treasury, its plac
would at once be taken 80 on the street =" b
currency which the banks could and woul
freely loan, and as no stringency would b.
produced, there would be no temptation t
influence the Secretary of the Treasury or an
of his subordinates to use their position
corruptly to relieve the money market. Tn
1" bulls would have banks of their ow
with which they could ease the market q
fast as the - bears could lock up money
and these operators would be obliged to stud
other devices than the operations of the trea:
ury department to affect the value of fame
stocks. OF course we do not suppose tn;
any scheme of finance would relieve til
money market of all its perturbations, an
more than any system of hygiene can reliev
the body of all the ills flesh is heir to. Their
would still be fluctuations in values and fail
ures among men of business the bulls an
bears would still find ways of getting corner
on stocks and running their prices up o
down poor harvests would increase tn
price of bread stuffs, and abundant crop
would make bread cheap. But free bankin
ought, and we can but trust would, be
remedy for many of the financial ups an
downs which are arti6cialIy produced b
heavy operators and it would take fror