The herald., 1896-06-05
HENRY CLEWS' LETTER
NEW YORK n1au 90 ,soe

| Sh'iA NiS III tHC iaiiOS VI the plOIeSSlOIlttl
operators, who under such circumstan-
| ces find selling most congenial, so that
| the predominant tendency is towards n
! slow decline in prices. Outside these
political conditions, influences are on
| the whole favorable. 1t is true, the eX-
| port OF gold continues; but Wall street
| has not taken that factor very serious
! ly, and there are indications that the
| movement will soon come to an end.
| There is also an absence of return of Sc
| curities from Europe; which is rather
| remarkable considering the agitation OF
| the free coinage issue in the elections.
| The railroads also are doing well. Man
ayers generally report good business
ana encouraging prospects. and are max
| ing liberal provision for accommodating
| the coming crop movements. The earn
| 1nSS make a good showing compared
| with last year. which is the more graft
| Tying as year ago the business was
upon an increasing scale. In the mer-
camille business. the conditions are var
led. some trades reporting fair move
ment but at low prices, whilst others
are full of complaint. The dry goeds
distributors especially find it difficult
to move off their seasons stocks and
have to adapt prices to the condition
of ample stocks and slow demand.
The iron trade is very sluggish; the re-
cent raising of prices by the combina-
tions having put very severe check
upon the demand. Taken as a whole.
however. the material conditions affect =
ins the market would probably admit
of general rise in stocks. We're it not
for the chilling effects of political uncer-
tainties in connection with the silver
question. These remarks as to the con-
dition of trade have reference. how
ever. to the local markets. while reports
from the interior indicate a healthier
state of business that prevails in this
city. This is a difference to which we
have found occasion to refer previously.
and it needs to be kept in mind in iudg
ing of the state of affairs in the country
at large AS the local depression comes
nearer to Wall street, it produces an ef-
feet disproportionate to its real i'm
portance, and thus breeds an extent of
psssimism exceeding what is warranted
by the general national conditions.
The early adjournment of congress
will have somewhat of an assuring effect
upon confidence. 1t will mean an end to
interferences in the Cuban and Nene-
zuelan questions: to disturbing silver
schemes; and to virtual regulatory res
olutions for preventing the government
from protecting its notes by borrowing
gold and thereby precipitating the silver
basis.
AT the same time. it will require the
most jealous oversight over the caliber
of the men who are to be put in nomina-
tion for congressional functions. At the
next session, some of the most import
ant problems will be pressed for solution
that have ever occupied the attention of
congress: and no effort should be SPAR
ed to secure the nomination of candi-
dates who not only have competent
understanding of financial questions but
also can be trusted for the maintenance
of sound-money principles. The unde-
riable revival of silverism. as shown by
the political symptoms of the hour, has
naturally increased the solicitude of re-
Elective men about the future of none
tary readjustment. 1t is becoming more
evident that the settlement of this entire
problem is not likely to be effected by
any one bill or at any one session of con-
gress. The large general question in
wolves subsidiary parts. upon each one
of which there are likely to be wide diff
ferenceS of opinion. and which also will
require separate treatment
The first branch of the general issue
to be disposed of must be the future po-
sition of silver. The nature of the coin
standard is matter so fundamental
that all other money legislation must
depend upon what is done in respect to
that question. Upon the action in re-
spect to silver must largely depend what
is possible or what is probable in respect
to other branches of treatment
After silver. would naturally come
the legal tender problem. This may be
found much more difficult question
than it is now supposed to be- Although
it may be assumed that as a rule the
Eastern sound money" sentiment fav-
ors the withdrawal of these notes, yet it
is not to be overlooked that, even in this
section. there is an attachment to this
form of money that would raise obsta~
cles to a complete retirement of the
notes, or at least would demand that
their extinction should be accomplished
thro' gh very slow process. AS to the
South and West the old greenb cI fash
ion and the "more-money" people would
be quite likely to present a stubborn
opposition to any sort of interference
with the notes The Silverites also. so
far as they are intiationiscs. may be ex-
pected to resist any withdrawals of pa-
per circulation: the more so as they are
aware that, as free coinage would mean
a depreciation of all paper money, a
larger volume of circulation would be
needed under a silver regime. 1t is thus
clear that the treatment of the legal ten
der question must involve a long and
embarrassing struggle, with an uncer-
tain outcome.
Next in order of treatment must come
the bank note question. l say next"
because what may be done in this mat
ter must largely depend upon what is
done in the way of retiring the green
backs and Sherman notes. This again
and diversities of opinion. There will
be one faction which demands that the
basis of guaranty shall remain as it is,
with possibly an enlargement of the per-
mitted use from 80 per cent to 100 per
cent of the par value of the bonds. In
opposition. there vii be an important
demand for constituting the entire
assets of the bank and the liability of
the stockholders either the sole basis of
guaranty. or an alternative one with the
present bond basis. at the choice of the
bank. The South and West may be ex-
pected to make a resolute demand for
the rights of the state banks to issue
notes, either under the existing state
laws or under a general national law
defining the conditions under which any
and all bank notes may be issued. Here
is l"oblem involving discussions and
conflicts of interest and opinion suffi-
Client to cema = a session f. its settle
ment; if indeed any such measure could
be got through a senate opposed to anv-
thing in the Y of currency that might
tend to supcrsede silver or lessen the
blind popular demand for it.
Outside the questions of currency re-
form and purely as a question of prac-
tical finance, there is also the treasury
question: that is the question how shall
the treasury be enabled to keep good it's
gold reserve without continuous resort
to long loans to the extent of about $780,,
100000 year. This is a question of the
most urgent practical Importance; for,
in the present circumstances, the treas