The National tribune., 1890-09-18
THE FINANCIAL srRrNGENcy.


orning the tides in their regularity of oper-
alton. New York is the financial heart OF
the country, and the money flows in and
out like the blood in the human body
| through it's veins and arteries.
Twice year the bulk of the currency OF
country is gathered into the bankers vaults
in that city, and twice year it flows out
again over the whole land. Usually the
high-tidcs" of money in New York-that
is, when it is all gathered in-occur about
the middle of February and August, and
| " low tides when il is drained out-in
May and September.
II is easy to explain why this is so. The
merchants in the interior Of the country ana
the South and far West buy their goods in
| the East in the Summer for the Fall and
Winter trade They get them on credit and
pay for them with the money received by the
farmers from the sale OF corn, wheat, oats,
pork, tobacco, wool cotton, etc. These crops
| begin TO come into market in September, and
the dealers in the country draw upon their
banks, which in turn draw on New York,
for money 10 buy them. Several hundred
million dollars are consequently needed
within q few weeks for this purpose. The
return of the money begins some weeks
later Then the farmer has sold his produce,
paid the proceeds 10 the merchants for their
goods, and these in turn have paid their
creditors in New York, Boston, Philadel-
| phia and elsewhere. The railroads have
carried immense quantities of merchandise,
grain, etc, and have sent their earnings to
New York TO pay interest on their bonds,
dividends and advances. BY the middle of
February all the money taken out in Sep
tember and October is back in New York.
1t is lying idle there, and loaned to oper-
ators on Wall-street at very low rates of
interest. In short, "money is very easy"
and speculation is active.
With the return Of Spring the program is
gone over again. The interior merchants
have bought on credit immense quantities
Of Spring and Summer goods, number Of
enterprises requiring ready money are en-
tered upon as the season opens and the
agricultural products not put into market
during the Fall and Winter are now showed
ont TO make room for the new crops Again,
the hundreds of millions are drained out
from the New York banks, and about the
middle of May "low-tide" is reached, and
money is tight" close" stringent"
It is at these times that panics occur.
Operators in Wall street who have no
difficulty in getting money in July, August,
January, February and March, are caught
short in May or September, and go to the
wall.
The "pinch this September is unusually
severe for variety of reasons. The first is
that agricultural products having advanced
rapidly in price, so that it takes fully % per
cent. more money to move them than II
usually does The next is that there is a
much larger cotton crop than usual, IL has
come into market earlier, aud absorbed a
larger amount of money. Thirdly, there
has been great drain Of gold to Europe.
Immense stocks Of foreign goods have been
bought in anticipation OF tie going into
operation of the Mckinley bill, and great
deal Of money is locked up in them. An
idea Of the amount is obtained from the fact
that it viii require about 100000 to pay
the duties on those already in the New
York Custom-house.
The stringency is only temporary. how
ever, and is confined to the money centers
and those engaged in some form or another oil
speculation. The crops al over the country
while not abundant. are fair, and they bring
coed prices. All the industries are prosper
Gus and on a solid basis.
One powerful influence in ayerting panic
is the large amount Of money being dis
tributed all over the country in the way o.
pensions The good influence Of this can
not be oyerestimated 1t is millions of dol
lars placed beyond the manipulations o
Wall street operators. The money goes
directly where it viii do the mos
good. 1t goes-a few dollars to eacl
into the pockets Of the common peopl,
/, everywhere. The pensioners pay it out Il
the house-owners, the dry-goods merchants
the grocers, shoemakes, butchers, bakers
physicians, etc. and so it passes direct,
into the channels Of trade, and promotes tia
general prosperity. The purchase Of SIS,
100000 OF $2G,OOO0OO Of bonds by tn
Secretary of the Treasury, and the paymen
Of interest on bonds in advance, may he'll
the operators in Wall street out Of hol,
but the expenditure of $l5OJOOO00O 70
= pensions will be an immense benefit TO tn
4 people Of every section of the country.
i, NEW ENGLAND PROTECTION.
- Prof Goodwin Smith saws: