Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1899-12-20
WEDNESDAY. DECEMBER 90, 1899.
THE FINANCIAL PINCH.

A Neor York correspondent OF the BAL
timore Sun, in discussing the recent
financial "pinoh" and furry. says;
"condls;ons which led up to this acute
.,,,,,.soy. arc not Of recent origin. Inev
date hack to the indiscriminate and via
snsgslstion Of last spring. During tho
last wear the country was recovering
f,o,n ? perisE of industrial and BUSINESS
aanrsasion. Idle money had been piled
nm In Die banks, waiting to find proftapie
use in any enterprise promising resay
return"
The correspondent next goes on TO
show how gigantic industrial combine
lions absorbed tho piled up money, ana
adds:
"ro the mean tirne the general business
of the country vas expanding, requiring
sncreaeed capital and making deIn"ioS
on the banks and money centres lor
f,,nds 10 carry on the steadily broadeh-
inn and iuSstiIpase business. Ihis money
,sss aent out and distributed 10 the great
lv ineressed army of wase-earhers III
small amounts. and WAS more wioeIy
dtsbursed 10 small traders and IN iiniiteu
savings. Therefore. IT ala not nile us
way back TO the centres as reauAy a.
had been the ease heretofore, and WIN
s,,rsSlus capital TIED IN IN speculative
stacks IL is not surprising pinch was
felt"
pTance as the Suns correspondent
points out, the banks were forced TO con-
tract their loans on industrial coilaterais.
This they proceeded TO do cautiously
but the policy proved only temporary
advantage. For on amy decline in the
money rate new speculation developed
and the situation was not bettered. Bank
,ase,vss I'm New York steadily decreased
and legitimate trade requirements were
met with difficulty"
Then. continues the correspondent:
"rne Secretary OF the Treasury gave
Temporary relief. first, by aSreeing 10 an
tioipate a years interest on SoVerim'HI
bond, nj q small rebate, and later when
the situation became more acute ny Vi
fering 10 buy $25,OO0.000 OF government
bonds AT the market price. These were
makeshifts. and so proved, as the relief
,xss not OF q permanent character"
Precisely. And reduced 20 it's last an
alysis, what does this presentation
OF the case prove? The need Of more
money and sound. elastic eurrency-i
currency system under which the takini
care of one set of interests win not neces
state or bring about the crippling OF an
other. AS an abstract proposition thu
general public have no reason to sympa
thize with the embarrassment of thos
who operate in purely speculative stocks
but the trouble is, that when these stock
ara hurt by reason of the non-elasticit
and volume inadequacy Of our currency
sarnd stocks are hurt along with then
The demands of business expansion ar
met at the expense OF both good and ba
securities.
And. what Is more, the present fnancis
system In its tendency TO congest IN
currency OF the country in few centres
at suoh times as it Is not needed by IN
country az large. conducts 10 wild spec'
,a,io.n and conditions which end
"plns\es," such as that which has jus
besn Nperienced. Secretary-of- the-Trea
sury Cane in his report preceding 81
last made this clear. and in his last r.
mort he outlined, in part. 10 say the leas
the remedy.
Before Diminishing the subject, howeve
we would say that we are glad to b
able TO state that the financial situatio
was much improved yesterday; also, thu
there IL reason 10 believe that so far 9
il Is possible under the existing fnancii
regime normal conditions are about
assert themselves. In other words, thei
is reason to believe that the storm
over, and that ii has cleared the atme'
phere again, for some little time.