The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1884-02-29
A Pennsylvania COngressman's Reasons for
Thinking the Democrats Will Nom
mate Mr.. Randall for President.
A Dignified and Temperate Discussion
of the Lasker Incident.
Tell City Petitions for Special Appropria-
tiOn-PrOpOsed Forfeiture of a Por-
tiOn Of the North Pacific Grant.
THE SILVER DANGER.

Uneasiness in Eastern Financial Circles, and
the Causes of the Same.
Special to the indianapolis Journal.
WASHINGTON, Feb. PA good deal of un-
easiness is prevalent in financial circles here and
in New York, especially in the latter city, at the
financial outlook. The immediate cause of
alarm is the supposed intention of Sub treasurer
Acton to pay out silver certificates to adjust
balances at the clearing house, thereby precipi-
tatng upon the country flood of silver paper
which the banks and business houses do not
want But it is admitted that some such crisis
as the one feared, is the only way in which
Congress can be induced to look at the situation
in its proper light and to prepare for the danger
of deprecated silver currency by stopping the
senseless coinage of the vast quantities of silver
dollars that are now being ground out each
month at Philadelphia, New Orleans and the
other mints.
The general reader may perhaps better under
stand the situation rs it now is by a brief eXpla
nation of the relation between the banks,
the clearinghouse in New York and
the sub-treasury. During Secretary Bout
wells administration it was customary
in New York city for the sub treasury to receive
drafts over the country, and to send out mes
senger to collect them from the various banks.
This plan created endless confusion, and was at
tended by great risk from loss. In fact the sum
of $1,000 once disappeared in this way and has
never since been accounted for. To guard
against any possibility of loss Secretary Bout
well issued an order forbidding the acceptance
Of drafts and checks at the sub treasures and this
order remained in force until Secretary Sher
man, part of his resumption scheme,
applied for admission to the New York clearing
house. Since that time drafts have been accept
ed the clearances made, and business greatly
taclhteted. 1t was formerly rule of the clear
ing -house to accept no silver certificates in set
Elements OF balances between banks, but by the
act OF the Fo,ty-seventh Congress national
banks were forbidden to become members of
any clearing house whl>l refused to accept silver
certificates. In order to a toid this law the New
York clearing g-house revoked rAe rule. but at the
same time a tacit agreement wAs entered into
among the banks composing the clearing house
that they should not be used in the settlement of
balances. Owing to the fact that the greater por-
ton of the disbursements of the government are
made in New York, when settlements are made
each night it is the almost nvarable rule that the
United States is debtor to the clearing house,
and as the payments are made in gold coin or
United States Enthusiastically the former-the
drain is sometimes very great Especially has
this been true for the past month. 1t was found,
before the gold certificates We're authorized, that
banks holding accounts against the government
did not care to accept such large quantities of
bulky coin, brt preferred silver certificates,
and they were issued instead The report of the
United States Treasurer shows that before the
gold certificates came out a very large percent
age of the balances were settled in silver certif
Gates because the banks preferred them to coin.
Just as soon as the gold certificates made their
appearance, however. the demand for
the silver Immediately ceased, and last
year not dollar paid through the clearing
house from the sub-reasury in silver erccrtifcates.
This heavy draft upon the gold reserve would
have been noticed before but for the fact that
during the fall and early part of the winter the
planters of the South and Southwest have been
large users of silver, and in order to supply the
demand at little expense to the banks the gov
ernment has sold exchange ON New Orleans and
thereby prevented any great falling off in the
gold reserve But the demand has ceased,
and the New York financiers seem to be hoard
ing gold in anticipation of short supply. In
the meantime, the banks fear that the sub
treasury will avail itself Of the
statutes and compel all national
banking institutions to accept silver
certificates in settlement of balances. The As
sistant Treasurer in New York certainly has the
legal right to do so, but should he take such
step it is likely that great deal of trouble would
ensue. The Treasury officials here claim that
they have no knowledge of any such intention
on the part of the Assistant Treasurer, but it is
admitted that the Withdrawals of gold have
created some alarm for the reserve; but, on the
other hand it is thought that the ''silver scare"
could not come at better time. as Congress
may have an opportunity to see the results be-
fore the adjournment.