Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1890-06-18
CURRENCY INITIATION.
How Wall Street Looks Upon the Sill
yer Bill as 1t Passed the House.
1t FaFOrs an Initiation In Prices of Securities.
Senate Will Probably be Forced to
Support the Measure.

NEW YORK, June T. During the
first half of the past week The in
| fuences ia voring the ''bear' side
| of the market were allowed free course
and on Wednesday it was evident that
they had exhausted their force and thai
sellers were ready to change sides on the
| first favorable occasion. The occasion
was quickly forthcoming, in the shape OF
the renewal of discussion in the house on
the silver question, in q way that indi-
Gated the certain adoption by that branch
of congress of measure admitting OF 8
large imitation of the silver currency.
From that time to the hour of writing
this the action of the house has
plainly indicated the adoption by large
majority of a bill providing:
l. That the secretary of the treasury
shall purchase 81 800, 200 worth of silver
bullion each month; 2. That, against
those purchases, he shall issue CORE
spending amount of ''treasury notes,
which shall be a legal tender in the pay
ment of both public and private debts;
8. That said treasury notes shall be re-
deemable on demand IN coin, or upon de-
mand of the holders in silver bullion at
Its then current market value, at the dis
erection of the secretary of the treasury !;
and 4. The bill provides that the secre-
tary of the treasury shall cover into the
treasury the lawful money fund (now
amounting to about S57 900 ,000) held for
the redemption of called-ln bank notes,
thereby making the same available for
general circulation.
As this bill recognizes the conserva-
tive provision insisted upon by Secretary
Window that the silver notes shall, I'M
der certain conditions, be Tedeemable in
silver bullion at its current market
value, it is assumed as highly probable
that the president wonld accept the
house measure. The senate will no doubt
strongly oppose this redemption clause;
but as that body may finally learn that,
with President Harrison, 1t is question
of the house bill or none the violent silver
men of the upper house will most likely
find IL necessary to submit in final con-
ference between the two branches of
congress.
Wall street interprets these facts as
meaning, as first effect, great infls-
ton of the currency, likely to act upon
the speculative Imagination in such
way as to produce general anticipation
of a rise in the prices alike of commodi-
ties and securities. That anticipation is
one thing, however, though influential
enough to produce an effect on prices for
a time; the economic bearings and the
ultimate result may be q quite different
matter. The mere fact of putting into the
retail circulation so much more money
= off Arir IN
of use, to a certain extent, checks
now performing the functions
as the new money NAV find a permanent
resting place in the banks, it will become
a much more important element of in
fiation. For, in proportion as the law
full money in the banks increases, the
power of the banks to lend within the
legal restraints is increased. The pro-
posed silver notes are to be legal ten
der, and as such could be used as legal
reserve by the banks; but it is by no
means certain whether the banks may
not discriminate against those notes as
being an undesirable and unsafe form of
reserve. There can, however, be no
second opinion as to the effect of putting
into circulation the S57 ZOO, 900 of money
now tied up in the bank note redemption
fund. That fund consists entirely of the
kind of legal tenders which the banks
now employ for reserves: and, with the
large redundancy of currency that will
exist under the new law, there will be
strong tendency towards circulation 40
cumulating in the banks, which will find
no difficulty in discarding the silver notes
and at the same time holding
on to the legal tenders that will be re-
leased from this special fund. And as
Accommodations of idle currency in the
banks of the interior are always apt to
be sent to this CITY, we may most proba-
bly, see Gas one of the results of the pro-
posed measure) large and moro or less
permanent accumulation of legal tenders
IN the New York associated Danks-than
which nothing could be more conductive
to the encouragement of speculation at
this center.
1t will thus be seen that Wall street is
not without some substantial reasons for
regarding the house silver bill as favor
ing an imitation, sooner or later, in the
prices of securities; and the increased
activity and the advancing tendency in
prices for the latter half of the week is
simply an expression of that estimate.
In my judgement, this factor in the
market establishes fair basis for buy
ing for moderate profits. II is to be re-
membered, however, that the prospect
is one of probabilities and not of accom-
plished facts, and that, before a bill is
reached acceptable to both houses and to
the president, , there may be changes af-
fenting the situation with consequent
fluctuations in prices. 1 would there
EeEe. for the present, recommend buy
ing on moderate declines and selling on
moderate profits, keeping keen eye on
the barometer of confidence.
IN the money market, there is steady
feeling and borrowers on call can easily
supply their wants at 5@7 per cent.
Money continues to go into the sub
treasury, the banks having lost about
81 ZOO, 200 in that way during the week,
while the stringency at Boston has
caused $500, 900 of gold to be sent to that
city within the last two weeks.
HENRY CLEwskssak
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