Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-08-24
STOCKS BORNE DOWN.
Bad Effect of a Big Decrease in
Specie and Legal Tender.
HIGH HOPES FOUNDED ON CROPS.
The Benefits Looked Forward to Expected
Rather Too Early.
NO DANGER FROM THE SPECTATORS


When the bank statement came out on
Saturday, showing a decrease of about 81,
100000 in specie and legal tenders, it had a
markedly injurious influence upon the
prices of stocks. What little tendency
there had been to rise disappeared, and in
its place ensued a decided depression.
Everybody knows, or ought to know, that
the crops, upon which such magnificent
hopes have been built for months past, can
not be brought to market without the agency
of ready money, and that this center will
have to supply a good part of it this year,
as it has supplied it in years gone by, and
yet the first indication that the machinery
for its distribution has begun to move was
interpreted as token OF impending dis
aster.
An omelette cannot be made without
breaking eggs, and if our crops are going to
bring to us stream of gold from Europe
we must first start them on their errand.
The explanation of the irrational phenom-
enon of Saturday is, I take it, the habit of
stock spectators to keep their eyes fixed
upon the possible supply of loanable money,
and to sell, or at least to refrain from buy
ing, whenever that supply threatens to be-
WHAT THE LOSS MEANS.
A loss of s4 10000 of reserve by the
banks means to them q curtailment of con-
siderably more than 81, 100000 of floating
funds, and a corresponding curtailment of
their facilities for carrying stocks. OF
course, they know their business, and, if
they do not, 1 am the least competent man
in the world to teach them. Only 1 cannot
hal1 ont tha 1r,o IF fol in,
stocks produced by the commencement of
the very process which has all along been
Vaunted as sure to produce rise.
1 observe, too, expressions of an appre-
hension that the European demand for our
grain, by stimulating speculation in it, may
put the price of it up so high as to prevent
its export, and thus defeat the beneficial re-
suits which have been expected from our
abundant harvests. I entertain no lofty
esteem for spectators as class, but can
not think they will strive to do more than
get the most they can for the grain they
buy.
HOW VALUES ARE MADE.
As Adam Smith has well observed, the
mercantile value of any commodity is fixed
by the higgling of the market. The seller
asks one price and the buyer offers another,
and they finally trade upon terms mutually
satisfactory, if they trade at all. Besides,
in the case of our grain, there is too much
for it all to bought up and held back by
few spectators.
On the other hand, there is danger that
the benefits which the crops are to bring
may be expected by many people earlier
than they can legitimately be looked for,
and that consequently some disappointment
may be experienced because of delay in
their arrival. AS yet only wheat has begun
to be reaped. Indian corn is not ripe, nor
eY n quite out of danger, although every
day Of this hot, dry weather is an immense
factor in its favor, and cotton-picking will
not commence till next month. When, too,
every one of these great staples has been
harvested, it has to be collected and shipped
to the seaports of the country, transported
across the ocean and paid for by the for
eign purchaser. The process is slow, and it
requires months for its completion, and its
results will be correspondingly slow in
making their appearance.
THE GOLD OF EUROPE.
1t is not surprising, therefore, that as yet
it has not been demonstrated in what man
ner Europe will pay for the food which it
is now pretty well established she will have
to buy from us during the next II months
That no gold has come back to us does not
prove that none will come, and observe
that fnanciers on the other side are assum-
ing that they will have to send us gold, and
are making preparations for it.
In itself, return flow of gold will be of
no value to us. We can neither eat it nor
drink it, nor wear it, nor do we need it to |
use as money. But its arrival, as being an
indication that we are to be flooded neither |
with foreign manufactures nor with our |
1Sfnn he md L
and if it should take place, I |
shall be the first to recognize its import |
ance in restoring confidence.
By the way, source of gold supply upon |
which had not counted with much assur
snce seems at present likely to be found in.
he disbursements of the United States
Treasury on September 1 for the maturing
" per cent. bonds.
THE POLICY OF FOSTER
The Secretary of the Treasury is reported
Is having declared on Saturday that the
allure of his scheme to extend the bonds at
per cent. at the pleasure of the Govern
nent will not make him 60 on paying inter-
,st on them at Az per cent. He will paw off
he principal at all hazards, and, though he
loes not say so expressly,it it may be assumed
hat he will follow the invariable precedent
n such cases and pay the amount in gold.
AS have several times pointed out, this
course will almost certainly involve the use
# portion of the 500, 600, 600 gold hitherto
eseryed for the redemption of the green
'acks, and it may therefore alarm the pub
ic, but this evil will be more than counter
alanced by the good effects of the measure
s a demonstration of National financial
bility. Judging solely by the price of
tocks and bonds, it is evident that the pre-
onderant sentiment of Wall street is in
avor of expecting nothing but rise as the
esult of the seasons harvests.
EARNINGS OF RAILROADS.
Although the earnings of the railroads in
he West and the South show as vet no in
rease, but on the contrary, in some cases a
ecrease, plenty of buyers are found for
heir securities at an advance, and even
mong men who are not buying but who
re interested merely as creditors of compa-
les which have until lately been in dis
ress, there is an indefnable sentiment of
heerfulness and of confidence in the ability
their debtors to pull through and pay
hem what they owe them. In finance, as
4 religion, faith is mighty agency, and !
ill remove mountains Of anxiety; if it can
o nothing more.
This improved tone of feeling is shown
by the way in which the I
,heme for sydicating the Union Pacific {
eating debt has been arranged and is 60 {
lg through. In its terms it is far less !
lvorable to creditors than that whicn was }
evised for the relief of the Barings in |
ondon last November That scheme in I
olyed the guarantee by the syndicate of {
lie Barings' debts, whereas the members of !
lie Union Pacific syndicate guarantee moth