The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1907-11-22
ISSUE or BONDS AND NOTES.
1t Canont BE Considered a Safe Pre-
cedent.


With full realization Of the gravity
of the financial situation which has
inspired the action Of the treasury, we
are Of opinion that the course adopted
over Sunday is a serious mistake That
it will help the markets for the mo-
ment, and hasten through indirect
means the restoration Of bank re-
serves, is highly probable But pre-
cisely similar argument could have
been invoked for the issue of $780,
600, 900 irredeemable legal tenders,
supposing that recourse to have fallen
within the administration powers,
and to dismiss the action Of the gov
eminent with the easy assertion that
the end justifes the means Is to SUR
render all right to Judge of the coun-
try's financial policy in the longer flu
ture. A $4,000, 900 issue of Panama
canal bonds already authorized by
law and available as legal basis for
new banknote issues, was doubtless
open to certain objections as a drain
on capital when no capital could be
spared; but there was otherwise much
to say in favor of it. The short-term
note expedicnt, on the other hand, we
regard as distinctly vicious. Consider
ed as a precedent, it is deeply fraught
with evil The extent to which it COM
mits the treasury for the future to the
paternalism which reached such ex-
cesses under Secretary Shaw, is per-
haps the least of the unhappy conse-
quences foreshadowed, yet this Of it.
self is unfortunate enough. The use of
government credit by President Cleve-
land and Secretary Carlisle after the
panic of 1898 bears no analogy to the
present case. Nm that famous instance
the government sold bonds to make
good the depleted gold reserve against
its own outstanding notes and to en-
able the treasury to maintain the pub
lie faith.
No situation of the sort exists to-
day; and, If it did. exist the last ex-
pedient which prudence would suggest
would be the issue of government
short-term notes. Nor does this new
toperation stand on footing even with
Mr., Cortelyou's use Of the public sur
plus to relieve the recent panic
through deposits with the banks. The
treasury then did nothing more than
throw back on the money market
what in a normal system of finance
ought never to have been taken from
it. No similar principle can be invoked
in behalf Of the present action. 1t has
we are all aware, the defense Of al
urgent crisis on the money market anG
in business circles. Actual money ha.
ben boarded in stupendous quantities
bank reserves have been heavily Gu
down, and credit operations have beer
largely paralyzed. Taking into full &C.
count thes formidable elements in thu
situation, we are still compelled to re-
peat our disapproval of the admins
tration's move First and foremost. thu
issue of credit notes on the presen
plan and scale is an undeniable meas
ure of imitation. It is to all intents anC
purposes, in our Judgment, an expedi
ent similar to that which an excited
congress voted under closely simila
conditions after the panic of 1878, anC
which Grant blocked by his courag
eous veto. In the one case as in tn
other the government has created
heavy floating debt to raise none,
which It does not need, and which I
proposes to throw into the country
circulation. We do not Sc how It cal
be eontended for a moment that TIL
is a safe preccdcnt-Ncw York Even
ling Post