Dodgeville chronicle. [volume] (Dodgeville, Wis.) 1862-current, 1873-12-12


period $319, ,191 900.
REFUNDING THE PUBLIC DEBT.
| The process of funding the Public Debt is pro
ceeding satisfactorily. The total amount of sub
scriphons to the 5per cent funded loan S4 600
and the proceeds are applied to the redemption o1
an equal amount of 5-2Os as fast as @ the he subscrp
tions mature. The sum of $15,50O,OO0 received
from Great Britain, in payment OF the Geneva
award has been used to redeem an equal amount
of 6 per cent bonds, and these have been be- @ ex
cent. funded loan. When the subscriptions above
mentioned have maturcd, there will have been
effected conversion of 800 600 of the $40 loan
| an annual saving of $1,O0OOO0 in interest The
whole amount converted since the passage OF the
act has been $500, 100000 and the annual saving
of interest $3,C00,0O0.
| REVENUES AND ESTIMATES.
The alterations and changes in the tariff laws,
| and the removal of a considerable amount of in
ternal revenue taXatiOn have caused the revenues
for the fiscal year to fall much below those of pre-
| viOus years. During the months OF september and
October of 1873, an unexpected and additional
diminution has been caused, mainly in consequence
of the financial crisis but it is gratifying to find
that in this period of greatest commercial embar-
| rassment, the receipts in coin from customs have
quired for the same period to meet the interest on
the public debt, and all other expenditures which
are payable in coin.
| The revenues have already fallen off sufficiently
to make it important and necessary to exercise the
| greatest economy in appropriations and expendl-
lures for the future, and should there not be re-
|
receipts over those of the past two-and-ahalf
months, additional means will be required to meet
| expenses Should such be the case, recommend
additional taxation, judic0usy laid, and so as to
be the least burdensome upon the people and the
business of the country rather than resort to bor
rowing money and increasing the public debt.
| THE BANKS AND THE CRISIS.
| The prevailing practice of paying interest on
| country TO large cities, especially to New YORK,
| the greet financial CENTER at seasons OF the year
when there is comparatively little use for currency
| York where, not being required by the demands
| of legitimate and ordinary business they are
| loaned on call at higher rate of interest than
| that paid to depositors, and are used in specua-
| ton. Every year, at the season when the demand
| sets in from the West and South for currency to
be used in payment for and transportation of their
agricultural products, there occurs stringency in
| the money market arising from the calling In OF
| such loans to meet this demand. Until this year,
| though annually creating some embarrassment,
| this demand has been met without serious diff
| Guilty. During the past summer, anticipating the
| usual autumn stringency, the treasury Depart
ment sold gold while the market price " was as mgn, @
| ket were scarce, and while there was surplus OF
| gold in the Treasury, and thereby accumulated
about $14000 900 in currency. with the view OF
| using the same such part thereof as might be
necessary in the purchase of bonds for the sinking
| fund at times during the autumn and winter when
| they could be bought at price not above par in
| gold, or iii meeting demands upon the Treasury, as
| circumstances should require
This year there was great demand for currency
| to pay for the heavy crops for which european
countries offered a ready market. The suspension
of certain large banking houses, the first of which
| occurred on the 18th of September, alarmed the
people as to the safety of the banks and banking
| institutions in general. Suddenly there began
| rapid calling in of demand loans, ana very gen.
| era1 run ON the banks for the withdrawal Of de-
posits. Entire confidence was manifested IN Unit
ed States notes, and even in National Bank notes,
| and they were drawn wherever they could be OBJ
| tanned, and were largely boarded with as much
roc IN
| financial distress when that was the circulating
medium of the country. The banks found them
| selves unable to meet the demands upon them;
currency in circulation became exceedingly scarce,
| and the business of the country became greatly
embarrassed. In this condition OF things, great
| pressure was brought to bear upon the treasury
! Department to afford relief by the issue of United
| States notes. Several propositions looking to the
relief Of the money market were made to the
Treasury Department, which 1t was compelled for
various reasons to decline.
| The Executive Department. OF the Government
was anxious to do everything in Its power under
the law, and with due regard to the protection OF
the Treasury and maintenance of the public credit,
to allay the panic, and to prevent disaster to the
legitimate commercial and industrial interests OF
the country; but it was found impossible to afford
relief in any of the many forms In which that re-
| lief was asked 1t was decided, therefore, to
| adopt the only practicable course which seemed
| to be open to 1.-THE purchase OF bonds Tor the
| sinking fund to such extent as the condition OF
the Treasury would allow, and thus release con-
| siderable amount of currency from its vaults
| Purchases of bonds were commenced on the morn
ing of Sept. 90 and continued until the oath, when
| it became evident that the amount offering for
| purchase was increasing to an extent beyond the
power of the Treasury to accept, and the purchas-
ing was closed after bonds to the amount of about
| $4,000 900 had been bought. and without the use
| of any part of the $44,000,000 of United States
| notes generally known as the reserve.
| The currency paid out of the Treasury for bonds
| aided much to strengthen many savings banks, and
! to prevent panic among their numerous deposl-
/ tors, who began to be alarmed, and had there ae-
l fafdQ rUD n
stiuions it would have caused widespread disaster
! and distress. 1t also fortified other banks, ana
! checked the general alarm to some extent But
! the loss of confidence in the value OF a great
| amount of corporate property which Immediately
/ followed the failure of banking houses connected
with largely indebted corporations. the dstrust OF
the solyency of many other institutions, the doubt
| as to the credit of firms and lndlylduas whose
business was supposed to be greatly extended. and
the legitimate effect thereof in disturbing the busi-
| ness of the country, could not be avoided by any
| amount of currency which might be added to the
/ circulation already existing Confidence WAS to be
eventually restored only by the slow and cautious
process of gaining better knowledge of the true
values, and making investments accordingly, and,
| by conducting business on frmer basis, and
more regard to real soundness and intrinsic values
/ INTEREST ON DEPOSITS.
1 There can be no doubt that the practice by
banks of allowing interest on deposits. payable on
/ demand. is pernicious, and fraught with danger
i and embarrassment to borrower and lender, as
| well as to general business interests. Deposits
| payable on demand should be limited to that
surplus which individuals require over and above
their investments, and no part of that from which
they expect an income. Such deposits COM
paratively stable, in average amounts and constl-
| tute healthy basis for banking purposes WITHIN
proper limits, which prudent bankers know how 70
| determine. But, if deposit accounts are employed
as temporary investments, the interest attracts a
large amount OF money TO those ciies ,,sf az
interest is paid, and where speculation ls mosI ac
tive, at seasons when much proht thereon cannos
be secured elsewhere. With the first return OF