New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-09-23
THE PANIC AND THE TREASURY.

De galneu Dy shutting our eyes W thc iodi
gravity of the situation and we may as well
face the fact that we are by no means
out of our financial difficulties. But
the wild stampede is at an end. Men have
recovered their heads the banks yesterday
went through their clearances splendidly
the savings hanks have only been
subject to insignificant runs. AS soon
as the Stock Exchange opens again, we
shall have some necessary failures, but they
would have come, sooner or later, anyway,
and outside of Wall Street they will do
little harm. Over six millions of bonds
have been bought by the Treasury since
Saturday morning, and the Secretary has
forwarded twenty millions of currency for any
subsequent lots that may be offered. Whatever
immediate relief the conversion of Government
bonds into greenbacks can afford, has thus
been amply secured. We may soon expect to see
the financial currents resuming their equable
flow. Legitimate business, thus far, has hardly
been touched. The merchants have had no
panic, and the banks which have kept their
accounts are perfectly sound. The hardest
times Immediately ahead are for the Secretary
of the Treasury, and for all spectators.
Before Mr.. Secretary Richardson puts out
any more legal tender notes in exchange for
fve-twenties, we think it desirable that the
grave difficulties in which he is involving the
Treasury of the United States should be
clearly understood The Secretary has already
gone far enough. Every dollar that he
pays out now makes necessary very soon an
issue of greenbacks over the 100000 limit.
Let the banks now take their turn at the
wheel. When panic reigns in London, the
currency is never inflated by the suspension of
the Bank act until the Bank of EnglandS
reserve is exhausted. With the exception of
the fifteen million pounds of the circulation
which is issued against the Government debt,
every note paid out by the Bank, even in the
widest panic, is represented by an equal sum
in gold in the vaults of the banking house.
The law is not broken until the utter exhaustion
of the entire legal circulation seems to create
an imperious necessity. Even then, when the
Bank has reached the end of its rope, it is a
much disputed question whether any over
issue of notes should be permitted. In some
cases there is actually no Over-issue, and never
more than a very small one. We are exactly
reversing the course which is uniformly fol-
lowed in London. The necessity of any such
action as Secretary Richardson is taking has
not yet been demonstrated.
Let the banks now use their own strength.
That of the Treasury is already spent. To
accommodate the Syndicate it has bound itself
to redeem eleven millions of bonds in excess
of its sales of the new loan. We are here
speaking of bonds already matured I'M
der various calls. Without including that
for the redemption of fifteen mil
lions on the 10th of November, there
are, as nearly as we can calculate, from fif-
teen to twenty million dollars of matured
bonds yet to be presented for payment under
the calls of June 1 and September 6. The
holders of most of these bonds are probably
still in ignorance of the fact that
they have ceased to draw interest.
The next coupon would be payable on
the first of November, and it is probable that
the steamers which arrive about that time
will bring over a large amount of these
past due bonds for redemption. The
gold which is paid out for them and for
the November coupons will glut the mar
ket and may yet further break the
gold premium. The effect of another break
in gold will not be, as the fools suppose, a
long stride in the direction of specie pay
ments, but a serious injury to our exporters.
The producers of grain, cotton, provisions and
petroleum will get less money for these
staples. We fail to see that any benefit will
result from that.
AS we look at it the Treasury is like a ship
driven before a southeast gale, with choice
of striking either the Jersey or Long Island
shore. Secretary Richardson, if he keeps on
buying bonds has no choice but either to
break the gold premium or initiate the
legal-tender currency above the $685.
100000 limit. He will probably cOntrive,
as weak persons in responsible positions usu-
ally do, to strike on one coast and sink on
the other. He will require between now and
the LIST of January about fifty millions in
currency TO pay out for the Governments
expenses. His currency income will be about
thirty millions. IThe difference, which is
twenty millions, he must get either by selling
gold or initiating the currency. AS we showed
in The TRIBUNE of the Sth inst, the revenue
of the Government for several months to come
will yield no surplus. If the Treasury OBJ
tains twenty-six millions from customs be-
tween now and the 1st Of January, it will do
better than can reasonably be expected yet
twenty-six millions are only sufficient to
nav the coin interest which will mean
time accrue. There is no authority
TO raise money by the sale of
bonds. Therefore, if the Secretary now ex-
hausts the currency balance which he has
accumulated by his vigorous warfare on the