The Penn's Grove record., 1906-02-09
Currency Reform and Panics
VIM. B. Braker.

There has been much discussion le-
Gently land it would seem periodically
relative to the currency system of the
country, as it affects certain monetary
emergencies. There is always will be
among political economists and others
much divergence of opinion as to the
ways and mean to be adopted to bring
about a more elastic currency. That
daring %speculator, Mr.. John II. Schiff,
of New York, in his recent address
before the New York Chamber of Com
merce, did not alarm wise and conser-
vative %fnanciers, who Looked upon his
eloquent and incisive plea for currency
reform as nothing less than a "bullish"
slogan. But he gave occasion o alarm
when "call loans" were soaring as high
as 100 per cent, not because of the
scarcity of m )ney, but rather because
of its superabundance, aud the reck-
less manner that the New York banks
used their reserve to supply the de-
mands of willy speculative ~syndicates
which were caught "short."
Mr.. Schiff's plan is that adopted in
1893 by the Clearing House of New
York City which issued Clearing House
certificates for the purpose of tiding
over some of the financial Institutions
the issuance of guarantee CURRENCY
bonds by the national banks to relieve
financial s~tringencies. This PROPOSE
ton does not meet Secretary of Treas
ury Shaw's ideas, however.
The whole trouble III the money
market centered in Wall Street, where
over speculation ran riot. There never
was more money in the country per
capita than now; and there has been a
more healthy showing in financial and
industrial centres the past fiscal year,
according to Dunn'S and Bradstreet's.
When MI. Schiff spoke so gloomily
of the outlook unless the currency ques-
ton was settled by our National law
makers, he referred especially to the
three greatest panics i'll our history as a
nation. They were:
First-In 1887, when the suspension
of the New York banks occurred.
Hundreds of business firms were ruin
cd. Even States became bankrupt and
the President could not always get his
salary. Speculation was the cause, or
''frenZied finance" The tariff COM
promise'' caused large importations of
foreign goods, driving much American
capital out of business.
Second-In 1857 failure of the Ohio
Life Insurance and Trust Comp IA Y
bank failures numerous; land specuIa-
ton reckless; ''paper'' cities numerous;
many u%nproductlve railroad projects
undertaken.
Third-In 1873, the failure of jay
Cooke & Co., the fnanciers being over
foul years regaining public confidence.
Then there was what is known as
BLACK Friday in the annals of fnan-
cial chaos in this country.
1t was September "a, 1869 when Jay
Gould and James Fiske, Jr., tried to
create a corner in the gold market by
buying all the yellow metal in New
York City banks, amounting to S15,-
100000. Gold rose to S1.621. Men
became insane. Business houses were
about to suspend because of ignorance
OF the prices to be asked for their goods.
Secretary of the Treasury Boutwell,
bursted the Financial bubble' by
throwing $4,000, 900 into the market.
thereby relieving the monetary tension,
but not until after Gould and Fiske
a profted to the extent Of $4,000
600.