The sun. [volume] (New York [N.Y.]) 1833-1916, 1902-10-18
FINANCIAL AND COMMERCIAL.
FRIDAY, Oct. II.

i
Secretary of The Treasury announced at noon
to-day that he had pure hased IS yOOO, 600 wort h
OF he per cent. Government bonds OF 1926
at i3s,and that he would buy. IL offered o him
before the close Of business next Monday, a
larger quantity Of the same issue al 1877.
with proper abatement Of interest. II il
known that there will be Immediately ten
dered TO the Treasury under this invitati ion
| by the syndicate concerned in the transac-
ton and possibly by individual parties
bonds TO the amour, of SIS OOO. 900 no, Si0,-
600, 400. a. Wall Street read it--so that the
net result Of the Treasury's action will he
the release of abou, 81, 600 900 now held in
the Treasury's Golfers. II is understood
that the whole country was ransacked for
these bonds and that payment for them will
thus, eventually. be widely distributed
But AZ the New York money market is az
present and will doubtless continue To be
for some time TO come he highes, in the
land, it is probable that practically all Of
the money disbursed by the Treasury
under the bond purchases will he bit
at this centre. available for the needs OF
business and the speculative community.
Taking account Of the bond redemp,ions.
the circulating medium OF the ma, ion has
a. the result OF Treasury action about
S85, 900 900. and has been potentially in
creased $40 600 600 f,irt her by the Secretary's
ruling that Government, deposits Of Gov
eminent money in he na,ional banks are
not deposits and that surplus reserve funds
need not be- aggregated to protect them.
A the taking ont OF new banknote circu
lation is proceeding rapidly under the
r.. 49,.
of other securities than Government bonds
for Government deposits in the banks.
the increase in the circulating medium ar
described will probably be considerably
augmented in the near future. After pay
ing for the bonds which have been con-
tracted for. the Secretary Of the Treasury
will still have on hand in the Treasury
vaults about SIS 900 600 over and above cur
rent liabilities half Of which can be devoted
to more bond buying If he chooses. and.
Judging from his past course, the Secretary
will choose, rather than not to put out
the money il he thinks the tension of the
sit uation still needs relief.
1t would be idle 10 deny that there are
two opinions held in the financial com
munity concerning the wisdom Of these
bond purchases by Secretary Shaw. II ia
mainta tanned on the one side with what
truth it is for every weil-iuformed OBJ
server TO decide for hirnself-,hat the finan-
cial strain which recently prevailed was
purely and simply a Wall Street affair.
no, affecting general or legitimate bust
ness in the slightest, and due solely to the
eXcesses 81 speculation. Within the last
year and half a new element has entered
into the financial life OF the country II is
the speculative activity OF a comparatively
small number of very rich and newly rich
men who have not the smallest idea of
actually operating and developing the
properties whose certificates of stock they
buy and sell. but whose highest ambition
is to execute some gigantic railway steal"
like that Of the Louisville and Nashville
railroad. The undoubted power of these
men and their daring operations have
long been regarded by those who have
deepest at heart the prosperity Of our
country as the one great menace 10 tina,
prosperity. The worst event. then. in
a financial way il one that encour-
ages these ADVENTURE. and facilitates
their piracies. Those taking this view
of the situation believe that the dis
bursement Of so much money az jus,
uHr''eu Wy tlc VI NHs v,
now that the liquidation of overstrained
speculative accounts in Wall Street has
been well nigh completed, will have a ten
dency o renew and revivify this dangerous
speculation, and again bring into existence
the same state of affairs from whose deadly
peril the financial community has just
escaped. On the other hand. il is urged
that our present Treasury system is utterly
outworn, that circumstances show indub-
tably that our enti ire industrial and COM
mercial development is being impeded by
lack of money. and that IL is the duty Of
the Secretary of the Treasury 10 do the
utmos, that he can TO supply the deficiency
Of funds. pending a read lust ment Of our
banking and currency system, which il
is hored NAV take place at the coming ses-
sion Of Congress.
Which Of these two opinions il correct
need moi be here discussed. Perhaps there
is a good deal Of truth in each Of them.
A word Of caution should be. however, ad-
dresse d TO spectators who think that the
Treasury's bond purchases have been
engineered wholly with view to their bene.
fit. II may, perhaps, be discovered that
the money expended by the Treasury in
this transaction has passed into the hands
of people who have very definite purpose
in it's use and that this use is not that of a
crazy whrl In Wall Street. II mus, he ad-
mtted, however, that the immediate efYec,
Of the Secretarys action, taken in conjunc-
ton with the ending of the coal s, rike has
been rapid bidding mp of all prices on
the Stock Exchange. and the inspiration
with new life Of every speculative pool
so far an can be seen, this bidding up Of
prices and the activity Of these pools
are likely 10 continue rather than cease.
There are certain interests in the Street
TO which it i, needless 10 more than alluee
who five days ago were practically out Of
stocks, Now, after what they consider
the wholly changed condition or affairs.
they will probably he unhappy until they
get their stocks back again. Indeed.
the former tension of the situation has
been so far relieved that a. the close
of business to-day the market had re.
gained much more than half Of the entire
fall from the highest prices recorded in the
midsummer speculatiOn Practicable all