Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1896-01-03
The New Loan.

A few DAYS ago a monetary panic was
threatened i'm this country. The prices
of government securities. and indeed OF all
securities, fell rapidly. To-day the gov
eminent is offered two hundred millions
Of gold as "a loan. and The same men VINO
so recently joined in the cry mat VIII
was about TO break out between Eng
land and the United States are the
most active In placing that loan. what
SORT of financiers are these experts who
thus show to the world that they are no
wiser than the rest OF us, ana can"o'
see a week ahead when they undertake 10
forecast the financial future?
II ia indeed wonderful how the credit
OF the United States remains all the
while at high-water mark. One loan ala
not affect that credit. a second loan met
with the same sort of reception at the
hands OF bankers and other capitalists.
And a third loan was as successful as the
other two. And now we have ionr'h'
this last promising also to be success
And still the warning may be repeated
that this sort of financiering cannot last
long. A condition Of things which ne
cessitates the placing OF new loan III
order TO get money wherewith to pay the
ordinary expenses of the government
or to replenish the gold reserve cam
not become the settled policy Of the coun-
try. We may make the ayerment stronger
and say that no matter Tor what
purpose the administration places It's
loans. IL cannot afford TO strain the gov
ernments credit On this subject the
New York Journal of Commerce says, as
IL speaking by authority:
again: the borrowing largely fails TO
really get the amount of gold formally
borrowed 1t is demonstrablc from Off
cial records that, in respect 10 the TWO
first loans, the lenders withdrew some
SIS. OoOOO0 of gold from the Treasury,
either TO provide 1t in advance against
their subscriptions, or to subsequently
recoup themselves for gold paid out ior
the bonds. To this important extent the
loans have been a failure to procure the
necessary gold. Under the last loan the
syndicate so arranged it's method or pay
ing for the bonds as to prevent these eva
sions of bona-fide gold subscription; but
tho evil avoided at one end of the ncgo-
tiatjon came in at the other end; Tor inc
exchange operations introduced TO avert
gold exports I'D to October entailed the
maturing of large amounts OF foreign
bills subsequently, for the settlement OF
which some $2000.cCo OF gold was drawn
from the Treasury and sent to Europe.
This borrowing policy is therefore neither
moro nor less than a series OF vast
J,iting' operations conducted by the
United States Treasury
The Journal argues that the next Urea
sl..t tha
must necessarily be made the last one;
and in thus arguing that paper doubtless
speaks for Wall street. Anyhow, we VIII
quote again from what il said before the
last new loan had been agreed upon.
After mentioning several things that ought
TO be DONE the journal adds:
"These things should be done concur
rently. with an agreement between the
Treasury and the banks that, after three
months when the Treasury reserve
would have reached its maximum, the
Sub-Treasury will return to its usage up
to 1892 OF settling all its debtor balances
at the clearinghouse In gold; while the
banks, on their part, will agree to pay
customs duties, as rule In gold, and
to provide from the vault stocks all gold
needed for export. This being done. there
would be a resumption Of q large class
of gold payments now suspended. and the
suspension OF which Is the real imme-
date cause of the Treasury's troubles.
The Treasury would then pay out gold
more than enough 10 enable the banks to
pay gold for duties and to supply II for
export: and the banks would pay enough
in duties, added to its other gold re-
ceipts to enable the Sub-Treasury TO
settle wholly in gold at the clearing
house. There could no longer be any
drain on the Treasury fer export gold.
nor for any other purpose involving con-
version of legal tenders. and the status
would be restored. the departure from
which is the cause OF the existing
troubles"
The President and his Secretary OF the
Treasury have had all these and many
more theories drummed into their ears.
We await further Developments.