The Iowa plain dealer. [volume] (New Oregon, Howard County, Iowa) 1867-1895, 1871-11-03
The Week In Wall street.

The Week In Wall street.
When Secretary Boutwell, CON-
menced to make money arti6cially
cheap in order to secure the success
Of his peculiar 6nancia! and funding
policy, he opened tho way for eonse-
quences Of which, in his supreme
ignorance Of financial affairs. lie prob
ably had not the remotest conceptioa.
The action of the Treasury Depart.
ment and the general depression Of
business operated to increase the
amount Of floating capital. and threw
. constantly Increasing amount Of
idle money into the banks. This
money the banks were compelled to
lend out sometimes almost on bor-
rower's terms, with the result Of an
unexamplcd increase in the loans.
This increase of loans necessarily r.
duced the legal tender aud specie
reserves, until both became ominous-
ly low. The present week commenced
with less than $4,000, 900 in coin
in the city banks, and with the legal
tender surplus, including coin and
greenbacks, reduced to about IS. 900.
900. The situation vas aggravated
by the fact that the merchants re-
quired atleast $4,000, O0Oin gold
week for customs, and very large
amount Of foreign exchange to pay
for Fall importations. To meet the
mercantile demand for about &c.
900. 900 in coin a week, there we're
only $4,000, 900 in specie in the
city banks and $4,000, 900 a week
from the Treasury gold sales.
Under these circums tances the
price Of gold advanced in short time
from l12 to lis at the very time
when reduction Of the premium was
naturally expected. But a better
idea of the pressure may be derived
from tho fact that the carrying" or
borrowing rates fer gold advanced to
tho usurious rate Of IA to IL per
cent a day. 10th the premium and
the interest would have gone much
higher but for the knowledge that the
1
Secretary Of the Treasury possessed
power to regulate the market. Sever
al spasms ofincipient panic wore only
arrested by the wholesome dread Of
Ire asury Interference.
1t became evident that the Sec.
rotary must step in and increase his
gold sales TO an amount sufficient to
meet the legitimate demand Of the
mercantile community, or else see
the entire financial results for which
he has been striving for couple Of
years swept away in nas hour.
Al it was, the gold premiums were
advancing; the banks had increased
their rates Of interest from 2 to S
and 6 per cent, and were contract
| ing yigorously.-Thep p.io es of FiYe.
twentics fell off, and the new Five
per Cent. Bonds were quoted at l to
2 per cent. below par. to the loss and
disgust Of tA Syndicate" Then
the export trade was injuriously af-
fected, and the fall in foreign ex-
change stopped the shipment Of se-
ourities abroad.
Mr.. Boutwell, was in the prediea.
mont that no matter what he did OF
did not do, the results would be IN
furious to the financial business inter-
ests ofthe country. If he increas ed
the gold sales, the banks would be
still further depleted Of legal tenders
to pay Tor them, and would be COM
PEELED to contrast their loans no mat
ter at what risk to their customers.
On the other hand, if he did not sell
gold, panic was inevitable. Under
these circum stances, Mr.. Boutwell's
course was watched with intense in
terest. On Thursday be partially
allayed the excitement by selling
Sc, 600, 600 in gold in place of $2,-
900, 900, as advertised. This, how
ever, is only q halfway measure.
There are not wanting Indications
that the spectators who have already
taken advantage Of the wants Of the
merchants, will attempt to gain CON-
troll of the recently sold gold. and
thus advance the premium and the
carrying rates. In any case. the
effects on the banks Of the heavy cur
rency payments for the gold will be
looked for with grave interest.-U.
8. Economist.
In Iowa the planting Of trees is
anconra red by Law. Everv acre of