Year: 1869

SUNDAY. July 4, 1859.


The condition OF the money market during the
past week shows the necessity for an intelgen: So
luton OF the currency question by Congress next
winter. The monetary strlngency which prevailed
during the six days endng July g. 1862 has been
almost unparalleled in Wall street The constant
average of interest for demand loans was equiv
alent to one hundred per cent per anDum This ex-
cessive ngure Is ali the more remarkable hon the
fact that IN previous summers the rate has nuctu-
ated from two 10 live per cent. Last year IN the
corresponding week the prevailing rate was four
per cent. The week aL the yerT opening gave no
sign OF this sGrinsency. The first transactions on
Monday were az seven per cent, and very confident
feeling existed that the money marSet was
on the point OF conyaescence from the
spasms ana disorder into winch 1t had been
thrown hy the government sales OF gold Before
night, however. the demand so great that bor-
rowers had to pa high half OF one per
cent per day In order TO make their accounts good
at bank, and the activity thus inaugurated continued
throughout the week. until the very close on Satur-
day, when, under the disbursements OF The Sub
Treasury, temporary was brought about aud tile
interest rate ablteJ to seven per cent gold or cur
rency. according tO the character OF the coaterals
In accounting for this extraordinary state OF
affairs must bear in mind the salient
fact that the government has increased





greater than the amount usually kept on
hand TO meet current expenses. The accumu-
lation OF this immense sum is due originally
30 the gold sa e5, but when, in obedience
10 the general clamOr, Secretary Boutwell, ceased
these latter operations, the EVIL was still perpetuated
by the drain into the Treasury or the money paid for
income and othe. taxes. IL Is well known that Mr.
Boutwell,, out OF ue .erence to popular demand, be-
gan his gold sales at period when capital Is custom
arly superabundant in this CENTRE and counted
upon his abllity to conduct them without derange-
menr of the money market In this he has beon
mistaken, naturally enough perhaps; for, like
hundreds Of Others, he was not aware Of the great
depletion of capital TO the Southern States Last
week our banks neit twenty-six millions Of green
backs less than in the corresponding week OF last
gear. Where has the difference gone tor The answer
is easy. 10 the Southern states which, with the pas
sage of the law preventing the organization OF
new national banks and with the production OF q
cash crop Of cotton, have withdrawn money for local
circulation. Had the organization or more banks
been permitted IL does not follow OF that the
South would not have Withdrawn some OF our green
backs. The amount would have been less however.
1t would have been the quantity just requisite to
maintain legal reserve against their own local
issues. AS things are, the volume of currency which
the North possessed at the close Of the war; and to
which all standards OF value had been adjusted, has
been rarifed by its expansion over the territory
of the whole United States, the inequality
North being aggravated by the preference OF the
Southern people for the government notes over those
OF the remote and scattered Northern national
banks. II Mr. Boutwell, has made mistake
lie ought not to be afraid to correct
1T. His perseverance in maintaining his heavy cur
Tency balance led suspicious that the Treasury
officials are engaged In stock and gold specuatons.
In previous administrations it was che cliques who
used the government for their stock gambling pur-
poses Now, 1t is intimated, the government officials
use the ciques. Should the policy of the Treasury
Department result defeating the combinations OF
Wall street and restore business that locality TO
Ats legitimate channel il would be some consolation
TO those OF the mercantile world who are suffering
from the arrangement of the money market. The
fact still remains patent that Congress has an i'm
portant duty to perform in legslatng next winter
as to remedy and prevent the evils which now aIlict
our finances.


The weekly statement OF the associated banks
submitted on Saturday shows the contraction of
the banks during the past week. The falling or In
loans and the decrease in deposits were each about
two millions. The payment OF the July Interest by
the government led to an increase of specie to the
extent OF three and quarter millions. The legal
tenders suspicousy decreased about million and
n half The statement Is, however, favorable one;
for while the deposits have fallen or 80 largely,
there Is gain Of reserve OF nearly million and
half OF dollars. 1t Is evident from the steady con-
rractle policy Of the banks during the past month
that they are fortlfying themselves against what
must prove very active and stringent fall money
market the indications of that fact being already
numerous In Its present disordercd and deranged
state. The following are the last two statements