Los Angeles herald., 1891-08-07
ARTIFICIAL PANIC-REPUBLI
EXTRAVAGANCE.


EXTRAVAGANCE.
The last financial circular OF Henry
Clews & Co., dated New York, August
lst, takes a decidedly gloomy view of
the immediate future of stock specula-
tion, and makes a rather pessimistic
grouping OF the situation generally. 1t
marks a distinct departure from the
views heretofore outlined in that publi-
cation, whose general scope we have
heretofore given in the HERALD for the
reason that since the failure OF Barring
Brothers, the financial outlook has been
intensely interesting. The present cir
cular is remarkable for the prominence
which is given to the silver issue. Wall
street, of course, could not be expected
to ignore such en- opportunity for cre-
ating financial disturbance. 1t is as
though Jim Fisk should blame the
Iowa and Kansas farmers for the
Black Friday which he and his
unprincipled associates precipitated
ON the country. The actual money sit
nation in New York is not really dis
couraging. Cali loans are very low there
and in London, and the reserves at the
New York banks are about three times
the amount they were at the same date
IN 1889 and 1890, but all this counts for
nothing when the fact is that there is
vastly insufficient circulatory medium
in which to do the business OF this vast
country. It is from this circumstance
the ability arises of a small and COM
pact gang of Wall-street spectators to
derange the business OF the country and
engineer general ruin. We quote the
following portions of the circular, which
show the dangers of one of our periodical
fall panics:
In the first place, the patience and
endurance of holders of stocks have
been tested to close upon the breaking
point, and there is no recuperating
element within ready sight. In the
next place, the "bear" element is be-
coming bolder, and we have not yet
seen what could be accomplished by the
large professional sellers who attack the
market by sales of tens OF thousands of
shares. Again, within the last few
days, the prospects of the corn crop
have become beclouded by the protract-
ed cold weather in the corn belt, COM
ing upon the lateness of the crop. This
is a very important matter, as affecting
not only the tonnage of the railroads,
but also the results of the harvest to the
farming interest and to all commercially
dependent thereon. And, again, the
symptoms in political circles indicate
that the silver question, so far from
having been finally disposed of by last
session of congress, is likely to be forced
into the coming presidential election as
one OF its most conspicuous issues
than which nothing could be more
threatening to at least the foreign
estimates of such of our in
yestments as are not specifically
gold bearing. Yet further, it
cannot be regarded as certain whether
we have ceased to be liable to export
gold, no less than two millions having
been sent out last week, with possi-
bility that, in the event of new trouble
at the European capitals, new drains
might be made upon us. Nor is it to
be overlooked that, although no new
financial disasters are occurring abroad
and call money there is superabundant,
yet money on time is put out with ex-
treme caution, owing to vague fear
that further troubles may arise some
time during the next few weeks. And
finally, although call loans rule very
low here and the reserves of the New
York banks are about three times the
amount they were at this date in 1890 or
1889, yet, in the absence of any ability
of the treasury to afford help to the
market if needed that factor is not suf-
6cient to afford certain protection
against stringency as the fall advances.
Clews carefully omits from his circular
any mention of a circumstance that
quite naturally clouds the situation,
and that is the extravaganza of the
s'Billion Dollar" Republican congress,
the Mckinley tariff and the replacing of
a splendid surplus under Mr.. ,Cleve-
lands administration by deficit under
Harrison. He nevertheless calls atten
tion to the fact that there are no large
sums in the treasury OF the United
States which would enable the govern
nent to come to the relief of the mar
ket, which Mr.. Cleveland did in the
early fall of 1887 by buying bonds, and
thus dispensing large amounts OF gold.
This the Democratic president did re-
and it was very patriotic
and sagacious use OF the Democratic sur
plus. The mere spectacle of a business
like, economical administration of itself
did much to inspire confidence and rem
der panics impossible.
That the coming panic, if panic there
zhall be next fall. will be q purely arti-
Ecisl one, many causes indicate. The |