The Portland daily press., 1873-11-11
New YORK, Nov. 9, 1873

No new failures have occurred during the
mast week, and the financial situation is losing
its sensational features Money is abundant
enough but can only be procured on gilt edged
securities. Temporary loans have been made one
or TWO points below the legal rate of interest,
but only in cases where both the borrower and
the collaterals were in high credit. "Confi-
dence is plant of slow growth" and public
trust has received such succession of shocks
within sixty days. that long time must elapse
before its momentum will help to give life and
elasticity to business. Almost everybody who
possessed any property has been made to feel
practically the danger of putting faith in the
glowing circulars with which the. country has
been inundated for years past, offering high
rates of interest to purchasers of the bonds of
railways, hardly yet surveyed, intended to be
built entirely on credit and to yield fortunes to
their projectors in the way OF commissions on
the loans, the iron, the contracts and the sup
plies The old fashioned idea of subscribing to
the stock of company, and building road
with rigid economy had become quite too slow
for our enterprisng times. Borrowed money
was the only capital required The advertise
ments of these gorgeous schemes had become a
were productions evincing culture, imagination,
descriptive power, force of expression, ingenu-
ity and even benevolence. For the proposed in
vestment, when presented by writer of genius
was made to appear real boon and bless
ing to the fortunate individual who was suffi-
GENTLY rapid of movement to secure it. The
weekly newspapers, especially the religious ones
contained numerous columns of these prose po-
ems adorned with every variety of attractive
type, and tempting both by their form and lam
guage, the surplus earnings of all the saving
people in every village and hamlet of the land
from the parish clergyman to the hired girl.
Just now these same people are receiving
delicate little notes full of expressions of
regret, that owing to the present financial
embarrassment and to other causes not mi
nutely set forth, the payment of interest is
temporarily suspended. The moment these
came in lieu of the money so confidently
expected, their panic stricken recipients began
to think, then to inquire and to reason. And
the result of it all is, that they find sout that
their hard earnings have been swallowed up in
this or that railway constructed with labor
and material at the highest point ever reached,
and that so much of the money was used up
| in paying the expense of getting it that not
more than seventy-ive cents of every dollar
they paid in finally reverted to the use for
which it was intended and in many CAGES
the roads are yet unfinished, while in others
| though completed and in operation, the net
receipts are insufficient to pay running
expenses.
Surely there can be no surprise that with
such state of things, the tendency to lock up
money, and to trust nobody has become very
general. No glowing prospectus, however
gltterng its promises or eloquent its phrases
can any longer charm dollar from the pocket
of its wary possessor, whose caution is of the
keenest, because acquired by the hard lessons
of experience. For time the reaction, as is
always the case, will cause people to reject
securities that are solid and reliable But
that will not last long. There must first be
general liquidation, then a reorganization,
lower prices, cheaper bread, cheaper labor,
less extravaganza, an immense reduction IN
the line of personal credits, fewer middle men
and more producers and then there will be an
abundance of money for conducting all the
legitimate enterprises of which new country
is necessarily prolific.
Three weeks hence Congress convenes. The
moment the two houses are organized we shall
have flood of financial projects poured upon
the country. Some of these are already fore
Swallowed. The most dangerous because the
most specious plan suggested is that alluded to
by MIR. Forney in recent speech here for the
issue of "a national bond at reduced rate of
interest which can be converted into currency
at the option of the holder and purchased and
repurchased" etc. 1t has been stated that Gen.
Spinner confesses the paternity of the scheme,
but it seems incredible that the sturdy old
Jacksonian, Bentonian, specie circular, hard
money, Herkimer county democrat of the days
before democracy became a sham could seri-
ousiy propose TO convert the government into
Bank and the whole people into involuntary
stockholders therein, with the privilege of in
curing all the expense of banking not only
with no opportunity to derive profit from the
business but with a certainty of loss.
But without inquiring about its authorship,
just now. it is sufficient to know that reputable
gentlemen of acknowledged influence and posi-
ton have urgedlupon the President to recon-
mend in his message the authorization of the
issue of several hundred millions of converti-
BILE bonds bearing interest at the rate of 65-10O
per cent per annum, to be purchased and re-
purchased as greenbacks become plenty or
scarce
On reflection I find was mistaken in calling
the device specious. The only danger there is
in it springs from the responsibility of the par
ties who favor it. 1t has no merit of its own.
Think of it! The Treasury of the United
States is to be made to perform the function of
deposit bank, and to pay for the privilege of
doing it That is precisely what it amounts to
When money is plenty the government is alw avs
relatively in as good supply of it as the COM
munity. 1t can have no possible occasion for
special loans at such a time, and if it had, it
ought never under any conceivable circum-
stances to borrow on cali. Indeed, it is not pre-
tended that the government is to find or seek
employment for the currency it receives in ex-
change for its three sixty-fve bonds. That is
to lie idle till it is wanted for circulation.
Now does anybody suppose that the people of
this country would tolerate such q perversion of
the true functions of government, as is implied
in this extraordinary project? Can it be
deemed possible that the masses would consent
to invest their rulers with greater and more
dangerous power than is exercised by any
sovereign in Europe?
1t is urged that by enacting legal tender and
establishing the national Banking act the gov
eminent has committe d itself to the exercise of
paternal care over the fortunes, the pursuits
and the finances of its citizens In other words
because, under the pressure of a supreme neces-
sity, we have departed for time from the true
standard of money, or because the people have
consentedithat the constituted authorities NAV
act as Trustees for the safe keeping OF the col
lateral securities which protect the Banking
circulation of the naIion,-a measure of per-
sonal advantage to lpretty much every human
being in the land-we must confer upon our
Finance minister the practical control Of our
monied institutions, clothe him with a power
which adroitly and selfshiy used would make
him and the chief from whom he derives his
appointment absolute and which would make
our condition infinitely worse than it was when
Jackson waged his crusade against the old
United States Bank, involving contest be-
tween theigovernment and the money powers of
the country which lasted ten years, and ended
in the complete and it is to be hoped eternal
separation of Bank and State.