The morning news. [volume] (Savannah, Ga.) 1887-1900, 1900-03-04
WILD SPECULATION PREDICTED.


The understanding is that the conference
report on the financial bill viii be- acted
on next Tuesday. As The Republicans on
the Conference Committee have agreed
on all of the features of the bill the re-
port viii no doubt be adopted by both
houses and the bin wiz receive the Sig
nature of the President.
A feature Of the bill that is causing some
uneasiness is that which provides for the
refunding of a very large part of the
national debt The new bonds are to
bear interest al the rate Of two per cent,
and it is probable that the most of them
viii become the basis for national bank
note issues. The main purpose Of the re-
funding section of the bin Is 20 provide
a security for note issues that will afford
national banks a fair profit on circula-
ton. Banks win have the right to issue
notes 10 the par value of these two per
cent bonds The tax on circulation is
made very hight. The banks therefore
will get two per cent. interest on the bonds
they deposit and will have the privilege
of making all they can all of the notes
they via issue.
1t is predicted that the bank note cur
rency viii be increased within twelve
months anywhere between $5O,OO0,0OO and
20O000,000. If this estimate is correct ii
is likely that money will be so cheap that
a period of speculation viii begin such as
this country has seldom seen. The banks
will have vast amount of money and
they will try to make every dollar of it
earn something.
There would not be so much uneasiness
about the matter if it were not almost GER
tain that there would come a period of
reaction. What that means every one
knows who has had any experience in
financial matters during a business panic.
Indeed it is not necessary that one should
have an acquaintance with monetary mat
tiers to understand that a severe bus-
ness depression means vast wreckage of
business and industrial enterprises and
the overthrow of a great number of finan-
cial institutions. 1t means also suffering
and sorrow in tens of thousands of house
holds throughout the land.
1t is not asserted of course that there
win be wild speculation as the result of
the enactment of the refunding provision
of the financial bill, and that reaction will
follow such speculation. There may be
increased trade activity and great indus
trial development, which will afford
outlet for the increase in the volume of
the currency, and that dangerous specula-
ton will thus be avoided. IL is to be
hoped that such will be the case Tt must
be admitted however that there is ground
for apprehension.
That the banks are preparing to greatly
increase their circulation is evident from
the remarkable activity in the classes of
bonds which can be refunded into two per
cent. bonds. In our dispatches a day or
Two ago it was stated that the two per
cent bonds were commanding a premium
of two per cent. 1t is reported that as
much as four per cent. premium is being
offered for them.
1t is likely that this financial bill will
have another effect, namely, the reduction
of the rate of interest on first class seeurl-
ties to two per cent, or at most two and
a half per cent If two per cent govern
eminent bonds command a premium the
rate of interest on other first class securi-
ties is certain to fan. When the rate
of interest on such securities falls to two.
or two and a half per cent, what will
people, depending upon securities, have
to live upon, if their securities are first
class and they reside in cities-the cities
of this state, for instance-where the tax
rate is fully two and hah per cent?