The Portland daily press., 1873-10-28
New York Letter.

difference between fact and fancy illns-
trated.-Why money is held back-Bad
effect of the usury law.-What the banks
are doing.-A sample of stock gam bling.
The "AngIo.Bengalee Disinterestcd
loan and Life Insurance Company''-
History repeating itseIf.-Thc panics of
the past.
NEW YORK, Oct. 26, 1873
There was decided ripple on the financial
wave, for three days last week occasioned by
circumstantial report by New York merchant
of an interview between the President and
himself in the course of which the former is
represented as having pledged the government
to measures substantially the same as those
urged upon, and rejected by him on the occa-
sion of his previous visit to New York on the
21st of September. The gist of the statement
was that the President, having been informed
that unless immediate relief could be extended
numerous factories would discontinue work,
and that great numbers of operatives would be
thrown out Unemployment, promised to avert
these threatened calamities by the purchase of
million sterling of foreign exchange and by
issuing from the Treasury three or four mil
lions of currency per week for an indefinite
period. A proposition so important and start
ling could not fail to elicit universal COMMENT
and meeting of Bank officers was called to
consider its bearing upon the crisis. At first
the story came so directly and with such an APP
pearance of authority that it was received with
general credulity but there was such inherent
improbability in its details, that a little re-
Election suficed to inspire distrust of it, and
subsequent inquiry revealed the fact that it
had no other foundation than the excited i'm
agnation of its narrator to whom "the wish
was father to the thought. Accordingly by
the time the bankers convened the sensation
was practically at an end and the meeting
came to naught.
The Presidents imperturbable good nature
in permitting himself to be interviewed by all
corners and his generous sympathy with every
form of individual distress, however commend
able as evidences of the kindness of his heart,
have the effect of exposing him to msrepresen-
tation and it is no longer safe to assume that he
has adopted any line of policy in respect to f.
nancial matters on the strength of any verbal
report of conversations with him. have rea-
sons to believe that his convictions in regard
to the cause and the cure of the recent panic
are too deeply settled to be susceptible of ma
terial ehange-that he has very decided opin
ions as to the danger and folly of stock specu-
iations on margins and ypotheUations-tha
he believes in hard money-and that he has
abiding faith in the strength, resources and
prosperity of the country.
The letter to Bank President about which
there was so much talk till its contents were
known turns out to be nothing more than a cour
teous acknowledgment of the receipt of a com
muncaton from that gentleman land passing
Recommendation to the Banks to extend
all the aid they could to their custom
ers, all which he had said, and more, in
previous letter which was given to the public
three weeks ago. The President believes that
the banks will incur no serious risk in extend
ing their credits generously to merchants of
undoubted solvency-that the flow of money
from the interior to New York will be speedy
and continuous, and that the present trouble
has originated in the Interruptions to credit
rather than in a scarcity of actual money.
The correctness of this view of the situation
is palpable to the calm observer of current
events. There has been for week past
steady increase in the bank reserves, but lenders
of money are still unwilling to part with it on
any terms. Let us inquire why? In the first
place stocks have not declined to point which
invite investment. They are buoyed up by
artificial means in the hope that adyentitious
helps may yet come to save their holders from
the losses which the sale of them would sure
~ entail. Meantime the affairs of the great
spectators continue deIanged and unlouida-
ted and everything is in condition of sus-
pense and uncertainty. Again, temptations to
make loans on adequate securities at high rates
of interest are neutralzed by ominous intima-
tions that the plea of usury may be interposed
to rescue desperate borrowers from the conse-
quences of their own volun tary acts The
usury law at this moment is great hindrance
to the REIMBURSEMENT which must precede
healthy revival of general business No pru-
dent capitalist dares to lend money at over
seven per cent. interest, and yet there are
plenty of responsible parties who are willing to
pay twelve. A third reason for the timidity of
men of means, lies in the fact that there have
been such frequent transfers and re-transfers of
collateral securities in the great medley of spec
ulation, that it is difficult to determine who is
the rightful owner. In short, there are snch
multiplicity of causes for dstrust that pretty
much everybody who controls surplus funds
holds his purse with clenched hands and re-
fuses to disgorge on any terms until the old
scores are finally settled up, either by bank
ruptcy or compromise, and new order of
things promising permanence is established.
The banks. as general rule, are discount
ing mercantile paper with liberality limited
only oy their ability to render such accommo-
datons' These institutions, before the panic
were lar 100 prone to favor call loans, and thew
thereby drove the merchants into the streer for
help. Now the merchants are recognized as
customers to be served in preference to all
others; and if there are any failures among bust.
ness men, they will be found to have had their
origin in excessive overtrading or indefensible