The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1873-09-30
TUESDAY NOVEMBER A, 1873.
THE FINANCIAL SITUATION.

THE FINANCIAL SITUATION.
A CALM review of the circumstances of
the country, both at home and in connec-
ton with our foreign commerce, must be
reassuring to the most timid, and effectu-
ally silence the croakers who have aided,
by their gloomy forebodngs, in promoting
the late panic.
We say late panic, because in the pres
ent lull Of apprehension we recognize the
morning ray of confidence, which must
brighten as people look around and scan
the causes of the trouble, and the resources
Of the country which are available for their
removal. Financial panics are neither
new nor rare; and glance at the condi-
tions which characterized those which have
been most rulnous will show the ground-
lessness of present apprehension.
In England. the financial centre of the
commercial world, no panic has seriously
affected the manufacturing or trading in
terests, except when failure Of crops rem
dered food dear, and caused drain Of
money to pay foreign purchases of grain.
The same holds true of France,
and other countries which import food sup
plies; and it was true of this country in
1887 '38. During that panic weimported
grain from the Baltic ports and other
grain-growing countries OF Europe. The
destructive panic which swept England in
1S47-'43 was the sequence of the famine
year, 1876; including the disasters which
ruined so many produce firms in New
York, such as Suydam, Sage & Co., and
bankers like Prime, Ward 4 Co., who had
aided them in running up prices to a fabu-
lous height.
s In the United States panics have been
shortlived, and their destructive operations
limited, whenever the proximate cause was
not the failure Of one or more Of our great
staple crops--bread-stulfs or cotton. In
such cases of failure, where importations
were large, and commercial engagements
heavily contracted, the settlement of
course was predicated upon the receipt of
and payment in produce and not IN money;
and. produce failing and the balances
being demanded in coin, every firm
which had extended their operations beyond
their capital. whether in the importation
or sale of goods, had to suspend payment.
Then the failure of commercial houses pre-
ceded the suspension of bankers and
when the business of the latter was wound
up, If their assets, in the form Of bills re-
ceivable, had any value for purposes of
dividend, it was the exception; the rule
being a safe full of protested acceptances,
the public fleeced by the shrinkage or utter
worthlessness of shin-plaster promises to
pay, and outside parties or stockholders
yictimized to the extent of their shares in
the exploded bank or firm.
Now, in the present panic, the failure Of
bankers precedes land we have full faith
will not be followed by commercial failures,
and the legitimate assets of the banks
their commercial bills receivable real
ize either in full, or nearly so, all liabilities.
Itmay in fact be conceded that the pres
ent scarcity of money proceeds, not so
much from The lack of national assets, as
from their ercess az proportion TO the cur
rency employed IN as legitimate ases-com-
mercial, as distinguished from speculative.
undertakings. To move the grain crop OF
the West and the cotton crop of the South,
the currency of the country has been re-
called from speculative operations, and the
bankers through whom these operations
have been conducted have found them
selves embarrassed by speculative engage
ments which could not be met. owing to
the currency of the country seeking other
and more legitimate channels.
The granaries of the West are overflow.
ing with bread-stuifs, for which there is
profitable demand for shipment to Euronc.
The cotton crop of the South is abundant
and IS wanted for export OF fair prices.
The tobacco crop of Virginia will fill all
the old and many nev barns in the stale.
and will certainly command ready sale at
full prices. The nation was, in fact, never
richer in products than to-day.
Again, under former conditions of en-
barrassment, the country was flooded with
wildcat currency" which became
worthless to distant holders. These
holders were the working people, upon
whose weekly purchases every merchant
was dependent for the money wherewith
to pay hls business acceptances. The peo-
pie could only tender in payment broken
bank notes the merchant conld onlv
make the same tender to meet his own
obligations, and protest of the country.
merchants paper compelled the suspension
Of the city merchants. Nothing like this
can now occur. The currency in thu. hands
OF the people is as good to them as specie.
and though they may hoard it for a few
days, they will, Nth the return of conf
de''es 'ol'ich must follow reflection, use it
to pay their debts, and thus return il to
the banks, whose managers will certainly
employ il in commercial operations. NOV.