Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-11-14
RICfIAREsS0N-S REssPssNSIE:ELITY
FOR THE PANIC.

IelcHdrusOn WOULD shortly reJlre from
the position of Secretary of the Treas
uIy. The Nelo York Bulletin, aiournal
devoted to finance and trade, said
nothing could afford more satisfaction
to the business community than the
confirmation of this report, :" and added
that it spoke thus plainly because in
its intercourse with the merchants and
bankers of that city during the six
weeks of the panic, it did mot remem-
Der having met with more than oneper-
son who did not most en-
phatically denounce the Secretary
as utterly lacking the qualifications
necessary to his office" The Bulletin
asserts that mo one will challenge the
assertion, that nine-tenths of our citi-
zens capable of forming an intelligent
opinion on the subject, regard the
spread of the panic to its present seri-
Gus dimensions as chargeable entirely
to the failure of the Treasury to COM
prehend the nature and dangers of the
crisis" The case as between the panic
and the Secretary of the Treasury is
thus stated by the Bulletin: =
'The panic was first of all directed
| against certain new railroad enterprises,
whose credits were known to be largely
held by banks and bankers; and the result
| ing failures were an expression in full of
the effects which legitimately had resulted
| from that cause. Outside of that interest
all was sound and strong; nor did the
ramifications of the new railroad enterpris-
es run so extensively into the credit system
at large as to afford any just reason for the
| arrangement spreading further. The fears
| of the public, however. had become aroused
to the pitch when every bank depositor be-
| comes eager to get his money into his own
| handS-that most dangerous crisis in panic,
| a. which the whole system of home and
foreign exchanges is threatened with de
rangement and general bankruptcy becomes
| imminent. Had this crisis happened when
the banks were in an easy condition, and
| legal tenders were abundant, they
might have easily confronted the
danger and quoted the panic
stricken depositOrs; bit it came when the
banks held only one dollar in greenbacks
| against six OF deposits. III this impecu-
NOUS condition, the banks were exposed to
large drafts against the deposits of Western
banks TO provide for crop movements, to
Withdrawals of currency by private bank
| ers DESTROYS against possible run ON their
deposits, and to the demands Of the savings
banks who also wanted their cash balances
in their own hands as protection against
! threatened large demands from depositors.
| The currency IN the banks WAS Fidiculously
| inadequate TO provide for such eXigencies;
| and it was clear that, unless a large supply
Of legal tenders could be forthcoming from
some special source, the banks must sus-
| pend payments as body,
This is precisely the situation rs is pre-
| scented itself TO the Government. The al
| ternatives were, unlimited aid from the
| Treasury, or general panic and ruin. The
| Government held some S1G,000,000 Of cur
rency, which il had previously accumulated
at the expense of impGyerishing the banks;
| it had also S44000,000 Of gT66nbacks re-
| tired under Mr.. McCullochs secretaryslip,
! but which both the President and Secreta-
ry Richardson considered they had full au-
thOrity to reissue Ga point which il is rot
Treasury had S60,000,000 Of currency which,
upon its own admissions, 1t had the author
ity to put iii circulation. The Government
was asked to make this large supply availa-
BILE without stint, upon the ground that, if
such formidable resistance were offered
to the panic, the prevailing fears would
Subside and comparatively little cur
rency would really be withdrawn from the
TreasuTy-an opinion which is confirmed
by the universal experience that, as soon
as panicky depositOrs find they can get
their money! they no longer want it. The
Treasury refused to assume this decisive
attitude, the Secretary affecting to believe
that the trouble was "a mere Wall straet
furry and lily cOncealing his satisfaction
that the spectators were at last meeting
with their deserts. He failed to see the
imminence OF general bank suspension;
he could not comprehend what disaster
such suspension implied to the whole credit
system of the country; his whole treatment
of the situation, in acts and conversation
showed that he was utterly unaoquainted
with the workings OF practical finance.
Like his predecessor, he distTusted advisers,
no matter what their standing as citizens
or financierS. and failed to Disseminate be-
tween wise and haSty cOunselS. As the re- |
suit of this incapacity. the Assistant Treas |
nrer here was instructed to buy bonds at |
fixed price, but without any open intima- |
ton of the extent to which such puT-
chases would be carried. The public not |
knowing but that each DAYS purchases |
might prove the last were only stimulated |
to draw all the money possible from the |
Treasury. most of it going into the savings |
banks to be locked up 10 provide against |
run which the Treasury. through its hes |
itating policy, had failed to make less inn |
minent. After some S12,000,000 of curTen-
CIV had been parted with by the Govern |
ment, but in such a way as to prove Of vir-
tually no avail, the bond purchases were |
stopped. with the announcements that the |
S44.0OO,000 reserve would be used only TO |
provide for the inevitable ordinary dis
bursemeGts of the Treasury. The instant
effect Of this Temporary withdrawal Of aid |
was to renew the panic with d Virulence
which has carried it to the feaIfully de-
structive extent we have since witnessed.
"The first error of the Treasury was in
not meeting an uHTeasOning panic in blind
pursuit of money with an assurance that it
should be forthcoming to any required aX-
tent. The second error was. when the alb
senCe Of such assurance had caused the fail
IRE of the partial measures Of relief in not
coming forward with Az offer Of the whole
S44, 100000, to appease the popular ClamOr
for cash; which would have rcmedied the
first mistake and caused an immediate re-
stOration Of confidence. The third error
was in prOstrating the only hope on which
the public restGdFheir little remaining CON
tidence. by utterly Withdrawing the sup
port Of the Government ia stopping the
purchase Of bonds and abstaining from all
other suggested measures Of relief"
This is a pretty formidable indict-
ment of the Secretary Of the Treasury,
who is shown to have been so fiagrantly
incompetent as not to comprehend the
situation. What the cost of such in
competence has been to the country, let
its present condition bear witness.
Our finances Frustrated beyond al pre-
ccdent; our merchants, never in a
sounder or more prosperous condition,
embarrassed and driven into suspen-
sion; banks and bankers failing around
lis: our industries ctipOled and one