The sun. [volume] (New York [N.Y.]) 1833-1916, 1893-07-10
TEE anreHrENINa OUTLOOK.

by without any OF the runs upon savings banks
which we're feared. and without producing any
conspicuous default. except that upon the
Reading Consolidated Mortgage interest,
which was expected, and therefore created no
sensation: money. though not yet abundant
and cheap, is easier to borrow upon good collat-
erals: tho banks havo nearly stopped taking
out Clearing House certificates, and have be-
gun to retro como Of those already issued;
not only do the exports OF gold remain sus-
pended, but small imports OF It have been
made: currency Is returning to this contre.
and the fall In the price OF silver. which fol-
lowed the closing OF the Indian mints to tho
free coinage OF the metal, no longer ins pres
alarm. but rather the contrary. These things
are not OF themselves efficient causes OF re-
turning prosperity. but they are signs OF 1t.
and tend to work their own ful0lment
In tho face OF the fact that business affairs
have thus improved spontaneously. as II were.
without any help from the Federal Govern
mont and weeks before Congress will meet
under tho Presidents call and be able to logis-
late, it Is remarkable that tho Now York Cham
Der OF Commerce. which 10 supposed to ON
body the quintessence OF the mercantile and
financial wisdom Of the city. should have COM
mitted itself. as It did on Friday. to the decar-
alton. in effect, that tho silver purchasing
clause OF the Sherman act Is alone responsible
for our present troubles, and that the repeal Of
that clause is the one essential to the prompt
restoration Of national prosperity 1t Is in
decd. true that the operation Of this clause has
been to pour into our already abundant cur
rency many additional millions OF dollars OF
legal tender notes redeemable In gold. and It
has thus facilitated the export OF gold to sup
ply the Austrian demand for tho metal. In
directly. therefore. the clause has con-
tributed to tho alarm which prevails,
and tho consequence OF which has
been the paralysis OF business which
the Chamber OF Commerce deplores. but
1t is not true that It has been alono in pro-
ducng this result. nor that the mere repeal OF
II will restore prosperity. These purchases Of
silver had boon going on for several months
when the Barring collapse Of 1880 lmperilled
credit in London and made as great trouble
here. They steadily continued while we went
through that crisis. and we endured them for
two years and more without suffering. Then.
about tho middle OF last February. Secretary
Foster took It into his head to try and coerce
our Now York banks into supplying him with
gold by the throat OF stopping gold payments
II his demand was not compiled with. and that
was the real beginning Of the present strin-
gency. President Harrison promptly put
his foot on his silly Secretarys schemes,
but the mischief had been done The
country banks. on hearing OF tho secretary's
alarming declarations. concluded that
panic was imminent and began to draw cur
rency from their New York correspondents.
which. in turn. had to contract their loans.
and thus to mako borrowers uneasy. Then
came the bankruptcy Of the Reading Rail-
road Company early In March. the order by
Secretary Carlisle to suspend gold payments
on Treasury notes. which would have been
carried into effect but for the Semonstrances
OF Treasurer Jordan. the continued cutlery for
the sale Of bonds to maintain the arbitrary
$l00.O00.0O0 Treasury gold reserve. and.
finally. the collapse. early in May. OF the Ma
tional Cordage Company. followed by numer-
GUS bank and manufacturing corporation fall
ures in different parts Of the country. which
revealed financial unsoundness In SO many
unsuspected quarters that distrust OF all but
the strongest debtors became universal.
All this time the Sherman act has been kept
steadily ut work grinding out paper money at
the rate of between S3O00OO0 and S4.OO0.0O0
per month. and the mill cannot be stopped for
two months to come, at least and perhaps
more Yet. as We see. gold shipments have
cea sed. and a little OF tho metal Is coming this
way again: Europe 10 buying rather than sell
ing our securities. and now that all the con.
Germs which ought to fail have acknowledged
the, fact. those which remain solvent are be-
ginning to enjoy the credit which they deserve.
The purchases OF silver with Treasury notes.
under the Sherman act. ought undoubtedly be
stopped. but so far from their being the sole
cause Of the prevailing monetary stringency.
they have mtigated 1t. and their cessation
will. for time, hinder rather than promote
the return OF financial ease.
The Chamber OF Commerce. after thus ex-
aggeratinG the mischief produced by the pur-
chases OF silver under the Sherman act pro-
ceeded to express its desire for the appoint
m emit Of Commission By Congress to prepare
q comprehensive plan for that will.o the wisp
Of fnancers. a safe and elastic" currency.
One would think that their experience with
the law which they had just denounced. with
It's elastic" currency expanding at the rate
Of 100000 per month, and finally driving
gold out Of the country by the ship load. would
have contented them. but it seems that 1t has
not. AS people cling to the possibility OF per-
petual motion. Of squaring the circle. and Of
The transmutation Of base metals into gold,
so our business men cling to the idea
hat it ia possible to have currency
which shall contract automa tically as we'll
IS expand. notwithstanding the teachings
81 experience that currency once brought into
existence stays In existence. and 10 never
withdrawn from circulation until It's with
travail 10 made compulsory. This is ono Of
he objections to tho repeal Of the prohibitory
AK on State bank notes. Take off that tax |
and the country will be flooded with all sorts |
If paper money, which. whether safe" or I'M
'afe. will. besides doing other mischief initiate
prices and lead to excessive speculation. to DO |
ollowed in duo time by a revulsion far worse |
han that from which We are now suffering. |
currency to be really useful must be Inc |
astic. Only on this condition will 1t check |
he excessive expansion Of credit, which by it's |
'wn inherent nature is elastic. and keep enter |
rise within due bounds.
Tho PRONUNCIATION Of these errors By SO re-
peotablo and representative . body as the
Sew York Chamber OF Commerce is the more
o be regretted at this juncture because II |
ends to overcloud tho Frightening prospects
4 affairs and to proloDg the continuance OF
oubt and distrust Everybody knows. or
uGht to know, that the coming contest in
congress over the Sherman act will avail
othing In establishing the confidence OF
american as we'll as OF European investors In