New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-02-27
THE STATE OF THE MONEY MARKET

A magical change was effected yesterday by
information that the Odious and unjust tith
section would be stricken from the Funding
bill. While there were many dou6ters, ana
great feyerlshness throughout the day In conse-
ouence, the prevailing opinion, among Demo-
Gratis as well as Republicans, IN Wall Street. was
that Congress would abandon its coeIcive policy
entirely. 1t was also stated with great conf
depce. by persons who had unusual Opportu-
mites of information, that the President had
determined that he would not sign the so-called
Funding bill, if 1t came to him with the ob1eo-
tlonable section. Money came into the Street
freely from many quarters, and the danger OF
continued interruption of business through
monetary stringency was believed to be over
proyided, of course, the results at Washington
answered expectations.
Whether a Three Per Cent bill can now be
made to succeed, even with removal OF taxation
from banking property. after the extraordinary
disturbance of the money market, is quite doubt
ful. Plainly, 1t will rest very much with the
banks themselves, because any apprehension
of continued disturbance of that interest would
operate quite as surely as the disturbance itself
TO preyent investment in bond bearing rate
of interest low beyond precedent. IL the
National banks should feel disposed to take a
new loan heartily and voluntarily. aiding the
Government with all their influence, as they
have done in every other refunding operation
the money market could be speedily restored
TO condition CT ease and confidence. For, as
we have repeatedly Observed there was abso-
lutely nothing in the domestic or foreign bust
ness OF the country, in its supply of available
capital, or in the currents OF speculation, 10
occasion any disastrous stringency in the money
market at this time The tremendous contrac-
ton, long ago predicted by THE TRIBUNE as
the inevitable consequence of an attempt to
carry out the Democratic policy of coercion,
was the sole cause Of the disaster. And all
efforts of the Treasury were pow erless to afford
relief, as was plainly shown on Friday; while
the relief was instantaneous when 1t became
known that the fifth section would not become
law.
In consequence of this information, the con-
traction of circulation through surrender by the
banks, ceased on Friday, and the amount de-
| posted for that purpose on Saturday was only
1871 400. On the other hs md, the amount OF
| bonds purchased by the Assistant Treasurer was
| only $1,64S,OO0. Had the retirement OF Cir
| culation continued on Friday and Saturday OF
the rate of over $4,000, 900 in two days, as on
Wednesday and Thursday, it is evident that
the small disbursement of SIS, 335, 800 in the two
days on account Of bonds obtainable by the
Government would have been Of no practical
effect, The contraction would then have been
nearly $1,300,OO0 in two days, whereas, on
account of the falling off In deposits for sur
render of circulation to $2,216, 400 for the two
days, the increase Of available money was about
So, 100000. The remarkable Improvement was
evidently due lrather to favorable information
and strong confidence as to the future than to
any immediate expansion in the supply of
] funds. 1t Is known, however, that further dis
cretionary orders for retirement of circulation
to a very large amount are already here, execu-
tion{of which is deferred only because the ad-
vices from Washington promise satisfactory
result.