New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1888-12-28
PFpTBlTC1N DIFFICULTIES.

The initiation Of currency by the action Of
the Treasury during the year 1888 was re-
markabe in motive and character and in the
lessons which are taught by its results. 1t
began in September and ended in the latter
part of October, and as soon as the election
was over a considerable decline was permitted
which still continues. During July and
August the Treasury had permitted the volume
of currency to shrink. because there was lack
of demand for the amount in circulation.
Prices, both of commodities and of stocks mod
erately advanced In wheat the advance was
not moderate; speculation based on the snort
CROP and aided by the excessive supply OF
currency previously outstanding, had lifted
the price so far as to stop exports. But other
prices on the whole changed but little. In
spite of hurtful speculation, tariff uncertainty,
prolonged and disastrous railroad wars, and
the disturbance incident to Presidential cam
paign. a substantial improvement of business
was in progress.
This brief review of facts is necessary to an
understanding of what followed. In the months
of September and October the Treasury eX-
banded the currency no less than SAG, 5000, 600.
According to official statements the volume in
three hundred and sixty millions September l.,
one thousand three hundred and eighty-four
millions October /, and one thousand Tour
hundred and six millions November 1, so that
the expansion was twenty-four millions In
September, and it was also twenty-four mill
ions during the first three weeks Of October,
reaching fifteen millions in single week.
though slight decrease followed. 1t is fact
particularly worthy Of study that the large eX-
pansion in September served only to prevent
decline which legitimate influences would
| have produced, to give prices an ARTIFICIAL CHAR
acter in the more important markets, ana 10
encourage wild speculation with false hopes.
The average price of stocks was 500 IL on
the LIST of September, rose to S6i 81 IL during
the next week, fel back in consequence OF
realizing. but again advanced to $50 09 at the
end of the month. In all the gain was 81 81
per share, or about per cent. This was in
spite Of large sales by investors who saw that
the business of railroads was in bad way and
that dividends must be reduced. Imitation
only served to induce some persons to resist
natural tendency downward, and to load
themselves in the hope that the political policy
of the Treasury would pull them through. SO
in the markets for products the average for
all articles of which quotations are published
daily was $50 33 on the last of August, and
only $50 "a 1-2 on the last of September, and
vet the wheat corner in Chicago had lifted
the price 80 cents. In these markets, also,
artificial prices had been established, or a
natural decline had been prevented.
Then came the great imitation during the
first three weeks of October. In spite OF it
stocks fell 81 SO per share while commodities,
notwithstanding many wild speculations,
scarcely advanced at all. The election came
with stocks So per share lower than October l,
and commodities little lower. An expansion
hardly ever exceeded in rapidity or magnitude
entirely lost its power to influence markets,
and once more the theory that more money
will hoist prices indefinitely was disproved
Imitation OF currency is effective up to the
point that specuations which it fosters gel
control of markets and make prices artificial
and false. Then the higher prices demand
more money continually for the transaction OF
the same volume Of business. while the haste
of people to realize who see that legitimate in
auences are disregarded, in instances almost
without number, renders further initiation OF
currency powerless to affect the markets. and
ends in a collapse of speculation.
The Republican party will have to take
charge Of the Treasury with many markets
in an unsound condition because of Demo
cratic imitation, with a currency largely ex-
panded, confidence of foreign holders in Ameri-
can securities much impaired, and gold exports
stimulated In short, the difficulties resulting
from the dangerous policy chosen by Demo
Gratis for partisan ends are by no means small
and all the wisdom of Republican statesmen
will be required to overcome them.