The sun. [volume] (New York [N.Y.]) 1833-1916, 1899-02-20
aroNBE.

vi reduced Tuesdays transactions In stocks
:" ,ho lowest figure made this year. On
ww.I,.sday. however. business revived. Its
, uSS : began to Increase. and by the end OF
n w. waek il was as lively as ever.
M, underlying support OF the market 10 the
,",,nce OF money. and the ease with which
~ Lo borrowed at low rates. Pretty nearly
~, ,bs other elements contributing to a rise
-. go about exhausted their influence. and
III no ground for expecting anything he
"a The maintenance Of prices at the level to
INnr,.h ,,ey have been carried. Tho income
,.om most securities more h suflcing to
~ tbe interest on the money which was bor-
,srnd 10 buy them, aud the lenders OF this
So,sv not being disposed to call IL In. their
I.h,ors arc not compelled to sell their pur-
.h,sss hut hold them without fear. The pre-
nar,irant orinion is, that this halcyon 1nan-
.Ml weather is going to last for a long while to
..ms and few, II any. fear its interruption.
similar confidence was felt In the safety OF
- mschonism 10y which the functions OF civ
MEAD life are cnrriod on in the area OF country
u,+,.d nv last Mondays storm. and yet, for
,"cs II proved TO be IN founded. A little less
Kan eleven years ago this same section was
.rorvhelmel in the same manner, and vet. un-
u;,atu, Of the warning then given. thousands
~ nn0ple were NhhkllNN i'o NAiA' u ," Nd "
ma emergency. The s%toppnGe Of The daily
,nnplv Of milk, eggs. butchers meat. fish.
,,..b vegetables and other perishabie COM
~od,ies which cannot he kept on hand in
',r,e quantities. is not. indeed. proof OF a want
~ ,orosight. hut the freezing Of gas and water
rinss. the lack Of stores OF fuel and preservable
,o,5 and the needlessly incurred hazards OF
,o,rneys undertaken In the teeth OF the storm
=, railroads. liable ~ a blockade by snow
AIMS. manifested an incautlous reliance
r,on a uniformity % nature which was
not ,ustihed by the event. Not only pri-
r,,. houses. but great hotels. filed with
snss,s, and public buildings occupied by courts
and Government officials, we're found to have
,slisd upon receiving the coal they needed as
,bay used Il, day by day gas and water pipes
were discovered to DO protected only against
moderate cold weather. and succumbed at once
nj temperature approaching zero, and II the
r,ro1ysm had been only q little more violent.
And had lasted n day or two longer. New York,
Philadelphia and Washington would have been
as short Of the necessarles OF life as Paris
was at the end Of its siege by the German army
Il, 1870. For the rest OF the winter. and possibly
during next winter also. precautions against
,ha recurrence al the disaster will be taken.
but after that they will be discontinued. and
we shall 60 on in our old customary way.
That the financial system OF the country Is
no, less liable 10 unexpected catastrophes.
temporarily SCATTERING 1t. than that which
supplies our physical needs. has been re-
reatedly proved by experience. To go no
further back than forty-two years. we have
had, first, the crisis OF 1857 then that OF 1890.
then that OF 1873. and. more recently. those OF
1891, 1870, 1893, and 1895. On all these &C.
casions the sequence OF phenomena was the
same. The calamity was unexpected and I'M
heralded. and. consequently. the mass Of peo-
rs were surprised by 1t. Its first effect was
m impairment OF the credit Of borrowers Of
money. and a unanimous frantic effort by those
from whom they had borrowed 1t to collect
their debts. This produced a general desire
to sell everything that could be sold for
money. and an equally general unwillingness to
buy it except at greatly reduced prices. The
panic died away. in a little while. and was fol-
lowed by an exhaustion from which a slow re-
covery took place. until. finally. the country
was ready TO repeat the experience.
Treatises. essays and editorials without
number have been written and printed. and
speeches made. explaining these financial
crises and suggesting means for their proven
ton. To explain them is easy enough: to pre-
vent them has. as yet. been found impossible.
Their origin. like that OF confagrations. foods.
tempasts and pestilences, is no mystery. but.
Ike those natural calamities. they recur again
ind again. and mock at all efforts for their
suppression. The reason Is, that they proceed
from ineradicable impulses Of human nature
ITSELF. as water flows from a fountain. and can
IS little be discovered from their source. So
long as men. in the eager pursuit OF gain. will
take risks and run in debt with the expecta-
ton Of being able to repay their debts with the
proceeds OF debts due to them from their
debtors. OF. IN other words. so long as the bulk
Of business is transacted on credit, SO long will
Periodical financial panics be unavoidable.
The abundance OF what is called money. is. as
has been said, an accepted fact In the present
fnancla! situation and a powerful agency In
sustaining prices and promoting speculation
not only on the Stock Exchange but in all de-
partments OF business. Surprising as it may
Seem to those who have not reflected upon the
subject. fully three-fourths OF this money and
even more is the pure creation OF the human
mind. and depends for it's existence solely
upon the tarlt agreement of those who use it.
IT'S as fragile as a soap bubble. which is made
tya breath and can be dispelled as quickly.
The New York banks. for example. reported
IS' Saturday that they held subject to the
saecks OF their depositors 1897. 100000,
out o; this amount only 1902. 1000
was IN coin. all the rest being promises
tI the Government to pay coin. and by
%nclVidual debtors to pay by their checks
through the Clearing House. Taking the
BANKS OF the country as a whole. they profess
@noId not less than $4,000. 00O. 900 belonging
"'oeposltors. and II we add to the amount the
Ueposits in trust companies and savings banks.
we Total, according 10 tho latest report OF the
comptroller OF the Currency. rises to S5.741.-
V,"VVo. The combined holdings OF gold by
81 nese institutions. according to the same
report are S34l 100000 In gold and $50. 100000
" sA'er' the currency value OF the silver be-
tE more than one-half derived from the fiat Of
sN, me country Is, therefore, carrying on its
vi'less with thousands OF millions OF dollars
~"hat may be called phantom money. like the
SSIan'om gold described by the late James
.sA''F" which. he said. was the principal
.uo!ect OF the dealings on the old Gold Ex-
'aHEe' al the time OF the Black Friday OF 1859.
BESIDES this immense volume OF bank credits
r"Eh' oy the agency Of checks. is utilized in
.aH'ng payments by debtors to creditors.
Mtmlea countries also employ large amounts
papet promises to pay which pass from hand
n,A M IN the same manner that coin does.
AIhd OF money the United States has.
,--uulhg us silver certificates. 81 100 600.