Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1870-09-07
OUR FINANCIAL CONDITION.

! AootteA n tAoe -=1s
The experience of the lastsix week
Of a condition of affairs growing on
Of war in Europe has not been sucl
as to confirm the worst anticipation
entertained at the outbreak of tn
struggle. The frst effect was 70 caUs
heavy decline in those classes o
our securities which are held In Eu
rope and an advance Of 10 TO 10 point
in the premium on gold. Thes
changes so far equaliZed the value o
seeu tiles here with the quotations OF
the foreign markets that Ii was no
found possible to return from Europ
anything near the large amount o
bonds and stocks anticipated, tn
whole amount sent home since tn
outbreak Of the war being probably
below s., 100000. The anxiety Of Eu
rOpean bankers to have on hand al
their available means, so as to provide
for settlements and liquidatiOns in
the event of panic, however, induced
a very general calling home Of bal
ances held here; and as the paymen
Of the July coupons upon UniteC
States bonds caused those balances Il
be unusually large, we found ourselves
under the necessity of sending on
unusally large amounts Of specie, the
shipments from this port since thI
outbreak of hostilities having beer
about SIS, 100000. This Is about thG
extent Of arrangement thus far expe
rienced in New York market TherI
has been nothing like panic; ant
while at London and Liverpool fail
ures have been numerous, there has
scarcely been one suspension Of im-
pOrtance in this city. Perhaps the
] principal injury has been sustained
I by the cotton interest, which mus
have lost heavily upon cOnsignments}
but as the arrangement has occurred
/ at period Of the year when little cot
ton remains unsOld, the injury to this
] interest cannot be regarded as very
! severe. Already we see very rapid
recovery from the first symtOms ofde-
/ preston. The shipments Of specie
are rapidly declining, and our securi-
/ ties have so far recovered at London
that we have found it possible already
| to return part of the amount sent
home on the first flush Of the excite
ment. The suspension Of specie pay
ments by the Bank of France has les
sened the uses for coin in France, and
French gold is consequently likely to
| find employment in other countries.
The effect is already apparent in the
influx of gold to London, with a con-
sequent ease in the money market
and decline in the rate Of the Bank
of England. This ease in the central
money market of the world affects us
favOrably in more ways than one. 1t
is favorable to the accumulation OF
balances here during the crop season,
when money is worth fully Z per cent
In the next place, it favOrs purchases
Of our securities by London specula-
tors and investors. Our bonds are
less directly affected by the war than
those Of the European countries, and
therefore present a means for the
temporary employment of capital
next in stability to English cOnsols /;
and for that reason they may be more
or less in demand pending the war
from London bankers desirous of em-
plOying European deposits and from
Continental capitalists who wish to
place their means beyond reach Of the
vicissitudes Of war.
At the present moment, there is q
disposition to take a view os the pros
pect perhaps more hopeful than facts
or probabilities justify. Itappears to
be generally taken for granted that
the sweeping successes of the Prus-
SLAMS make an early peace certain.
But even il it were safe to jump to
such a weighty conclusion from such
partial promises, we still think it
would be unreasonable 70 conclude
that peace would bring US back, in all
respects, to the condition OF things
existing before the war. At the out
break Of hostilities our relations with
Europe involved its taking from US
something like SO, ,000, 900 per annum
Of securities in settlement Of trading
balance against us to that amount.
Considering that Germany has been
the chief taker Of our bonds and that
France has recently also became
buyer of them, and remembering the
financial prOstratiOn OF both those
countries, their increased taxation
and the large amount Of loans their
have to negotiate, can
we IT reasonably expect that these cOun-
tries will continue to take from us the
same amount of securities as former
ly? And If not, peace even will find
Us with a startling change in the con-
ditiOn Of our foreign exchange, call
ing for the utmost prudence in the
Of our imports and exports, |
and for sharp contraction of the
former. 1t is true, that the Interrupt
tiCn Of agriculture in two Of the
great grain-produeing countries Of
Europe will be favorable to our secur- /
ing high prices for breadstuffs which, /
II the surplus should be large, would /
be some partial set-Off against the
considerations. But on the /
contrary, the commercial prostratiOn |
and following war is always |
to the price Of cotton +; |
and the loss Of ID. per pound upon I
our exports Of cotton would find q |
very inadequate compensation in a |
few cents per bushel additional upon |
Our shipments of grain. So long as
this danger hangs over our exchanges, |
the gold market may be expected to /
sensitive, and we must stand 4
exposed to unusually free shipments 1
Df specie. The course Of our foreign /
trade, during the last few weeks, has |
not shown any improved proportion |
between the imports and exports. /
From the beginning Of July to the Goth |
If August, the imports at this port |
we're $500, 900 above the same period
If last year, notwithstanding the in
Of exports from Germany
md France; while our exports lex
,lusive of sPecie) for the same weeks
IRE s., 200, 600 less than in 1869 a
,Ourse Of trade the reverse Of what
'Ould be desired under existing cir
....
United States Securities at present
Exhibit a very gratifying frmness.
The chief buyers, fo- some time past,
AVE been the foreign bankers, who
ppear to have come 30 the cOnelu-
ion that, pending the war, our bonds
re likely to prove a fayorite security
N the London market. The pros
,ect Of increased purchases by the
treasury, for the next two months,
nd the expectation of free demand
rom national banks to be organized
nder the bank act OF last session Of !
congress have also very direct ten
ency to sustain the market. The ,
neasiness created by the war at first
heeked the flow of investment into
ew railroad bonds; but the interrupt
on has proved to be only temporary.
ound railroad enterprises still COM
land the attention of home investors,
rst on account Of the proved safety
such investments, and next from ,
be fact that they yield a much larger :
sturn Of interest than United States
Onds. 81.
Lost, stolen, or mislaid, French ]
rince IA years of Rgs, of tranquil Eo
.nor,a-o unant rvaor,- rod frorrcara and ] 8,