The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1890-12-02
OUR FINANCE III SYSTEM.
Its Gravest Defect IL Lack Of Elasticity.
Worst In Crop.aIoyipc Time.

Its Gravest Defect IL Lack Of Elasticity.
Worst In Crop.alovinE Time.
WASHINGTON, Dec. 1.-The Secretary
Of the Treasury, in his annual report,
has this to sag Of the circulating medium
in its relation to the business OF the
country:
I'm my judgment, the gravest defect
in our present financial system is its
lack Of elasticity. The misunderstanding
system supplied this defect to some
extent by the authority which the
banks have to increase their circulation
in times OF et1ingency, and to reduce
when money becomes redundant; but,
by reason Of the high price of bonds,
this authority has ceased 10 be OF much
practical value.
The demand for money, in this coun-
try, is 80 irregular that an amount OF cir
culatica, which will be ample during
ten months OF the yca., will frequently
prove so deficient during the other two
months as to cause stringency and COM
mercial disaster. Such stringency may
occur without any speculative manipu-
lations Of money, though, unfortunately,
1t is often intensified by such manipula.
tions. The crops OF the country have
reached proportions 30 immense that
their movement to market, in August
and September, annually causes dam
gerous absorption OF money. The lack
Of sufficient supply to meet the increas-
ed demand during those months NAV
entail heavy losses upon the agricultur.
al rs well as Upon other business inter-
ests. Though Gnancial stringency may
occur at any time, and from many
causes, yet nearly all Of tho great com.
mercial crises In our history haye oc.
cured during the months named, ind
unless some provision be made to meet
such contingencies in the future, like
disastess 1any be confidently expected.
am aware taat the theory obtains, in
the minds Of many people, that if there
were no aurplus in the Treasury, q sut!i.
ciest amount OF money would be In cir.
| culation, ,snd hence no stringency would
occur. The ia:t is, however, that such
stringency has seldom ;een produced by
Treasury absorption, but eauerally by
come sudden or unusual demand ioG
money entirely independent Of Treasury
condition and operations. The financial
pressure in September last, which at one
time assumed threatening character,
illlstrates the truth OF this stntes.ent.
There @ss at that time no accumulation
OF money In the Treasury from customs
or internal revenue taSes, nor from any
other source that could AFFECT the money
market. On the contrary, the total dis.
bursements for all purposes, including
bond purchases and interest prepay.
mepts, during the last preceding fifty.
three aayr. had been about $4,000 Geo in
excess OF the receipts from all sources.
The total apparent surplus on Septem'
ber 10, when the money stIiDgepoy cul.
minated, was S09,500,22O IS OF THU
amount $24,2lG,S SOL 96 was on deposits
in The banks, and presumably in circu.
lation su,snG the people, and sol ,709,.
$40 II was iTaciicaail silver, which had
been in the Treasury yaa.ts tcr several
years, and was not available for any Goa;
siderable disbursements. Deducting the
sum Of tneaa two items, viz. $685..
ISL rs, left an hetua! available surplus
Of only s5G.2l7,S2l y. tbs amount o.
the bank-note redemption fund thea in
the Treaspry, which had been trans.
ierred to the svailable funds by the acl
OF July II, 1890, was s54,0O0000 being
substantially the amount OF the available
surpl1s on September 10, 1880. %h:s
bank.note fund had been in the Treas
ury in varying amounts for many years
In August, 1857, it was Sl05S73, ,095 GO
which hld been gradually reduced Ly
disbursements 70 the amount above
named. 1t is apparent, therefore, that
the financial stringeEcy, under discus
sion, was not produced by the absorp
ton OF money by the Treasury, but b,
causes wholly outside OF Treasury opera
tions. ~
At the time when the foancial pres
sure in September reached it's climax
the extraordinary disbursements TO-
bond purnhasee had substantially ex
hausted the eniiIe ordinary Treasury &C
cumulatione, and but for the fact tha
Congress had wisely Transferred til
4 banS.note redemption fund to tho avail
able cash, there would have beeu n
money at command, in the Treasury
| Nv which the strained financial Condi
tions could have been relieved, an,
threatened psnie snd disaster averted
Had this fund been in the banks In
stead Of the Treasury the buaness Of th
country would have been adjusted t
the increased supply, and when th
strain came it would have been imposs
bic for the banks to meet it. The Go,
ernment could not have Withdrawn