The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1881-02-27
Herald EDITORIAL


Herald EDITORIAL
..,oro has not been so great a connection
,u.u .trcci in many years as that which
I'D on Thursday and perhaps reached MS
-,ostcfdav. At lcas, let us hope that II
hUe "a rs limit, for such violent disturb.
I'"'"', mo money market and sudden I'M
ne 4 value. cause much real distress
"a Greater apprehenSions.
suG secretary Of thc'Trcasury both pos
I"' ,be means and has the disposition and
Sc 20 deal with Such situation; but his
WV A. cannot he applied with quite The
lt''. ,romp.iiude rs the national banks
80" aeon able - exert in bringing on
PAW t. The banks will undoubtedly
w, ,ie1 and tranquility ana confidence be
DE- - within brief period; but there
I'm he q few days OF uneasihesS and
m'. The Treasury has vast accumula-
a'" =, money. which the Secretary has the
Noh INV and Tue will to let out INTO the de-
an..5 cbsnncl, oi circulation. and be has
,rsc,ical notice Of his intention 10
$40 me sudden siringcncy. But his
'5,d ,,ouir,> a small margin Of time,
".i, mat ~ the national banks requires
c Bot h.s power OF action and his de-
..-o,ins,ion 10 act must have rcassuring
s'". wh;c, Will probably bc felt to-day,
.ti,,ing the sudden alarm which has
,,lzrG the street,
r.. strain and crisis which have been %
.riGepN rrtcpi'aed are a natural result
-t,fe lineNyoc,td curtalment OF bank 90.
.,.u,..4'.on.. How have The national
~. been ,blc 10 deposit 20 quickly a
,-,s amount Il lawful money for With
s,-yr. iheir circulation; l. j. 10y nsing
,, ~ tn.ir reserves. There Is no other
-,htvhica hey could at once employ 50
,,rcb nVlu money. But when they thus
..de,. their reserves they are under
,,.,..ilv Of cgrMliug their loatS 10 make
~, IN, fhs.u shed reserves. Moreover,
,te ,yo.uGnt rates Of interest which
,..,,,.. G,p.,ltor. arp tempted TO draw their
,.er,y for prN.fe loans on ">haYe> ~ otake
''.,.,,,,4 Of The extraordinary state OF the
nancy market. When money commands
fou one hl.i o. one per cent. 20 one and a
i.f pcr cont. g day shrcWd businessmen
d,ni' ciou.e 10 leave thci" money on de-
,,.r in the banks, sitce they can make
enormous profits by lending II directly 10
,.-.oa. Who have been caught in the
iri.i,. By .Yercuiug on their reserves 10
vf,tdrl,y tE,ir circulation the banks have
f.allrd 'ben> lyls f0r Wccnng the wants
NJ tbcir customers, and hence the alarm
g those who have Obligations 10 meet
within the next SIX or eight days.
Itndino themselves unable to borrow
e., The hanks on the best collilCral>
irev are in imminent peril OF having their
r.,'cr di,hororcd and their credit shattered,
and are forced 10 p9y such stuaendouS rates
a, prevailed 10 tie street Yesterday. IL l.
ll,t a sorly consolation 10 a merchant who
l.n, been overtakCn by ibis unexpected
storm and ha> acceplanccs TO meet within
the next few days that The Secretary OF the
Treasury can straighten out the langle and
rc.fabli>h an easy money market within
lhc coming week. II drowning credit Is
10 be rescued. the relief must come
while the breath Of life Is still IN
il, BODY. Obligations must be met on
iLc day when they mature, and business
men submit 70 rcmOrSele>S Shaves TO protect
their Standing and credit and save them
selves from ruin. But 20 enormous rate aS
10 per cent. 4 day for the use of money OF
good cOllaieTals shows how Ill prepared is
The business community for so unforeseen
a crj,j, aS the present. The truth is that
business success depends on steadiness and
stability, aud ibi> storm bias struck without
warning aud finds everybody unprepdred.
II isatremenQOu> power which the national
bInks possess ii throwing everything into
sudden infringement and confusion when
everybody was expecting financial fair
weather.
We trust The worst is over. To-day the
clouds will probably lift. The instruction
which Secretary sherman sent yesterday to
Assistant Treasurer IlillhOuse TO purchase
ten millions Of bond, az par and accrued
interest created an easier feeling in the
street. although The full amount was not
offered before the close OF business hours.
~ fact. but little more than one third OF
lhc ten millions was offered, which Is not
>ulurising. since most Of the bOndhOider>
resident in the city bad no knowledge OF
.hc Treasury instruction until they learned
H from the evening papers after business
hours. Ii was not to be expected that the
national banks would be Jealous to avail
themselves o.; an offer which tends to block
their game. But the private holders OF
bonds will have opened their eyes when
they read the morning papers to-day. The
bonds which they own are locked up IN their
private safes or are in the custody OF The
deposit companies. MANY Of them will take
advantage today Of the Secrctary's instruc-
iiCu, which came too late for their action
yesterday. They can get their money now
on bonds which mature three months hence,
and Tie existing rates Of interest Viii enable
them 10 make a great profit by surrendeling
their bonds and leaning the money. When
money i worth per cent. day there Will
boz 30 lack OF men who prefer lOanable cash
20 expiring g per cent. and } per cent. bonds.
II TIE prescribed ten millions are all taken
today nearly . much money viii be re-
turned 70 the channels OF circulation as has
beer taken out 10y the action OF the national
banks. The discretion OF the Secretary Of
tlc Treasury i not limited to the ten mil
lions when be IN. offered. He is as free 10
purchase twenty millions as ten millions,
and he will doubtless exert his authority
D. save the business community from dis
ife,s. Ii is fortunate that this crisis &C.
cur, while Secretary sherman is sui in
Office. He knows every rope in The ship, and
viii not permit the closing week OF his bril-
liant administration TO be bad ending
OF a successful career. Not il he can help
II; ana his power to help aud skill 10 use ii
aIe OF no common order. The situation
VIII brighten before the close OF business
hours today. although The efficiency of his
methods Of c0ur.e depends OF the willing
ness OF holder, promptly 10 exchange bonds
Ior money. But when money can be en-
piOAed 10 such enormous advantage there
need be little apprehension OF hitch on
ibis point. The Treasury was never before
10 strong rs II is to-day; /. never before
Dad 20 much money which ii could I'M
ioek Tor the relief Of business; it never
h'd he'd who more fully possessed public
confidence 10 his experience, skill, and
courage. His great reputation is at stake,
ana be canoOt AFFORD 10 be fOiled in the last
days OF a splendid and victorious financial
career lie will do his utmost TO protect
the business Of the country, aud there is no
reason to doubt that he will achieve this
Growing success when retiring from office.