The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1902-11-30
POLITICAL EXPEDIENCY AS IT
AFFECTS SOUND FINANCIAL
POLICIES.

| In last Sundays paper we published an
article from the United States Investor
| pointing out the true financial condition
of this country today. In substance it
said that the day of liquidation was at
the industrials was being squeezed out"
It expressed the hope and belief that
the period of liquidation would not be
attended by greatly disturbed conditions,
but that the financiers could let the
water go out drop by drop instead of
pour through a large bung-hole. If they
can do this, no serious troubles may be
expected. The folks who have put their
money into watered stock will be able,
if the process is slow, to lose it gradually
and the liquidation will not produce a
panic.
The current issue of the Investor con-
tains another exhaustive financial review
full of interest and value. 1t begins by
recounting the predictions made by the
Republicans as to what would follow if
the Democrats carried the House. We
quote 1.-The Republicans were outspoken
in their confidence that Democratic sue
cess would mean financial and Industrial
| disturbance 1t adds:
| "As matter of fact, the Republican
| success at the polls was followed by =
| series of bad breaks in the stock market
and by recrudescence of the troubles
of the money market, and since the cleo
ton there have been many outspoken pre-
| dictons of a powerful recession in the
! industrial prosperity of the nation. II
| the recent situation in Wall Street had
| followed a Democratic victory, the air
would have resounded with the cry, We
told you So The Democrats are per-
haps to be congratulated on the fact that
they lacked ballots on November A.
| 1t goes on to say that if the financial
condition goes from bad to worse betW cen
now and the national election in 1904
the Republicans may be caught in con-
troll of the government and have to meet
a panic like that which faced Cleveland
a panic which it says was not produced
by party victory or party policy "but
TO the operation of economic law in pre-
vious years in connection with our cur
rency and our commerce."
The Investor sees an intimate connec-
ton between the election and the money
market. It.says:
1T will be recalled that on September
% the stock market experienced bad
break, and that Immediately the Secre-
tary 'of the Treasury issued his extraor-
binary order, exempting the national
banks from keeping a reserve on gov
ernment deposits, and allowing the banks
TO substitute other collateral than gov
| eminent bonds as security for govern
ment deposits. We have always main
tanned that, in issuing this order, the
Secretary of the Treasury exceeded his
rights. In our opinion, his act was an
! objectionable infraction of the laws he
| was appointed to administer His conduct
| was SO astonishing that it was necessary
| to look around for some unusual occur
renee to explain it, One hypothesis was,
| that the financial situation at that time
was very much worse than appeared on
| the surface, and that the Secretary of the
| treasury had become SO impressed with
| the danger as to be regardless of the
| methods employed in averting disaster.
| I1at was a rational supposition six
| weeks ago, but we have recently begun
| TO question if it was a correct SUPPOSE
| ton. Let us recite a few facts. Around
| October l the Secretary of the Treasury
| issued the order referred to above and
| subsequently to that date he bought an
immense amount of government bonds for
| the sinking fund. for the pupose of re-
! heving the money market. The election
| occurred on November T. Now note a
few facts. The election occurred on
| Tuesday, and before the week was over
| the Secretary of the Treasury announced
that the policy of accepting other Sc
curities in the place of United States
bonds as security for government de-
posits had been suspended. It was furth-
crmore announced that no more govern
ment money would be deposited in the ma
| tional banks. And it is worth noting,
! too, that government purchases of bonds
have also ceased. Cynical minded per
| sons are bound to ask if the Secretary
| Of the Treasurys money market relief
| measures had any vital connection with
the November election. 1t goes without
| saying that it was highly expedient, for
the success of tho Republican ticket, that
| the money market be kept as comfortable
| as possible prior to the election The
Secretary Of the Treasury stepped into
the market with his relief measures as
soon as the money situation actually be-
gan to wear threatening aspect. No
sooner was the election over than his
efforts to relieve the money market
| ceased. The semi -panicky condition Of
the stock market last week probably
struck other persons besides ourselves as
very curious. following so closely on the
election. Prior to the election the Secre-
tary of the Treasury resorted to extra
| ordinary measures to keep the financial
and speculative situation intact as soon
as the election was over, and the politi-
cal party with which he is affiliated was
assured of perretuation in power, he
abandoned the situation to its own re-
sources, with the result that money con-
ditions once more became threatening,
and stock market quotations became de-
moralized''
"Of course no one but the Secretary of