Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1890-08-23
WALL STREET AND THE TREASURY.

The financial stringency in Wall street,
Thursday, attained degree which has been
unknown of late years, and was accompanied
by the usual announcement OF steps on the
part of the Treasury for the relief of the
congested monetary center. As the strin-
gency was extraordinary the Treasury relief
is of large amount, comprising the purchase
of S20, 900, 900 of 411<s and the prepayment of
the September interest on the public debt.
This emphasizes the law, practically
established by the precedent OF years, that
when Wall street gets into the mire, the
Treasury must come to its relief.
It is not to be objected on behalf of
the Treasury that if financial stringency
gives it an opportunity to invest its surplus
in its own bonds at an advantage, it should
do so. No better investment of that sort is
possible for public funds, and the interests
of the Treasury will be fully subserved If it
is able to put large amount of its surplus
into the market in exchange for United
States bonds. But the condition of mercan-
tile finance which is constantly looking to
Governmental aid for. rescue from the conse-
quences of its own speculative foibles can
not be regarded as possessing the elements
Of soundness or stability.
The era of reliance on the Treasury dates
back to the war times, when it had its incep-
ton in the fact that W all street was sustained
by the Treasury in its adversities. 1t was
natural return, when the interest of both
were SO bound together, that the Treasury
should come to the relief of Wall street in
hard times. But years after the time when
each interest should be able to stand on its
own bottom, Wall street has looked to the
Treasury for help in tight places, until it
has come to be an accepted division of labor
that one shall fly speculative kites, and that
the other shall help it out when the kites
fall toward the solid ground. OF course, so
long as this condition of dependence exists
it affords stimulus to the reckless employ
ment of banking funds in speculative
operations.
The monetary stringency which seems to
have spent itself for the present. at least,
bore all the surface indications of specula-
tive manipulation. OF course rates for
money ranging from 25 to Sc per cent are
prima Jdcie evidence of manipulation.
Nevertheless the furry is an evidence that
the period of monetary abundance which
extended from the middle of the seventies
up to year or two ago, has given place to
one of monetary activity. The long era of
easy money and low rates was due to the
general liquidation which took place after
1873, and the fact that investors generally
stood aloof from any securities which were
not of undoubted solidity. OF late the
legitimate needs of business have increased
the demand for money, and it is likely that
the new forms OF investment in industrial
corporations have induced investors to for
get their old-time caution and put large
amount of money into fixed investments;
which will not easily be got out again.
The business interests of the country are
on an undoubtedly healthy basis, and cannot
be seriously injured by flurries like that of
Thursday. But with the signs of a closer
money market, and the dependence of Wall
street on a Treasury which many a year
hence will find its power to rescue Wall
street, very much lessened by the disappear
ance of the surplus, it will be discreet to be-
ware of speculative bubbles or widely ex-
panded business operations.