November 13, 1887





The  Record  and  Guide.





1409





THE   RECORD   AND   GUIDE,

Published every Saturday.

191 Broadway, N". HT*

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J. T. LINDSEY, Business Manager.





Vol, XL.





NOVEMBER 13. 1887.





No. 1,026





When General Newton was put at the head of the Department
of Publio Works our citizens very generally thought it waa an
ideal appointment. They knew this West Point graduate was a
good engineer and an honest man; hence the complaints against
General Newton and his department by the Chamber of Commerce
took the community by surprise. Mr, Schultz and the other com¬
plaining merchanta doubtless overstated their case, but perhaps
where there is so much smoke there may be some fire. The head of
tbe Public Worka should be a business man; which army officers
are not. Even General Grant failed in every business undertaking
during his whole life. The West Shore Railroad was built by army
officers, but it cost vastly more than their estimatei, and ruined
all who put money in the enterprise. Something more than
honesty and engineering ability is required in the transaction of
business. As yet the public bas not been put in possefision of any
facts that would discredit General Newton, but he may show, as do
other army officers, a lack of business training.";





One of the most discouraging results of the election last Tuesday
was the inferior quality of the legislators elected to govern us from
Albany. The great majority of those chosen will do no honor to
the State. Quite the contrary; indeed it is an ominouB fact that
since before the war New York has been unable to ©leet one Legis¬
lature which could be called honest. The majority has always
been on the "make." The lobby, if supplied with money, can
dictate what measures shall be enacted into laws. The new Legis¬
lature will be as bad as the worst.





While the Senate and Assembly elect is very inferior as regards
ability and honesty, the judicial and other officers chosen in New
York and Kings County are much above the average. Brooklyn
has a good Mayor, and the judges returned in New York are nearly
all that could be desired.    For so much let us be thankful.





Among the measures that will certainly be pressed upon
Congress to get rid of the Treasury surplus will be the one first
presented by Mr. John Jay Knox, which aims at substituting the
Government 4s and 4}4^ by a new bond bearing 2J^ per cent,
interest and running fifty years; th© government paying a
premium so as to expedite the exchange. It is by means of thia
premium that it is proposed to get rid of the present surplus in the
Treasury, There is much to be said in favor of this plan, as it
would eflfectually get rid of the unused money in the Treasury
and afford time for such reductions in our tariff and tax laws as
would in tte future secure a more equal balance between the
Treasury's receipts and expenditures. Mr. A. P, St.. John, Presi¬
dent of the Mercantile National Bank of this city objects, however,
in the Bankem'' Magazine, to Mr. Knox's scheme. This gentleman
declares that "either the refunding will prove a failure if
attempted, or its success will at once inure to the disadvantage of
the United States." He goes on to say that should the holders of
the national debt agree to the refunding the difficulty would not be
settled but postponed, for if the government Treasury continues
to receive more than it expends it would again have to give extra
inducements to the holders of the new securities in order to get

them to part with their evidences of the national obligation.

---------«----------

But Mr. St, John overlooks several very grave objections to the
issuing of any 2J^ per cent, government security. Money is legiti¬
mately worth in this new country from 6 to 7 per cent, Tbis fact
has been lost sight of since the Treasury department has been
in the market for over twenty years steadily purchasing its
own obligations. Our national debt for that long period has prac¬
tically been cornered. This had an unwholesome effect upon specu¬
lation, for ik bas set a standard which has made money artificially
cheap. Thia again has led to a practical inflation of all bonds and
stocks, and, for that matter, of all purchasable property, including
improved real estate. A stock, bond, or a security from which 6 per
cent, is derived should sell at about par; but the unwholesome
enhancement of the price of government bonds has made a 4 per
cent, security seem cheap at par.





page of government bond purchases. Prices at once responded in
the general markets. Nominal rates for money were again
demanded. An attempt to float a 2J^ per cent, bond would
undoubtedly be a good thing for Wall street speculation. It would
give a fictitious value to every interest-bearing security. After a
time, when the conversion of the 4 and 4^8 into Sf^a had been
complete, thero would occur another crisis, as money would then
become dearer again. The government 2J^s would probably in
time fall to 80 or less, and there would be a panio in all securities.
The adoption of Mr. Knox's scheme would mean an immediate
undue inflation, followed further along by a panio in pricet.





The Pennsylvania Central road has at length beeu given per¬
mission to raise its tracks in Jersey City, so as to obviate the danger¬
ous obstruction and frequent loss of life from the running of trains
on the surface of the streets. For several years the corporation
has been trying to make this change, and at its own expense. But
the local politicians, doubtless with the view of levying blackmail,
have opposed the improvement. It is strange how instinctively
the local government of cities will object to anything that will
benefit their localities. Here is Mayor Hewitt and the Corporation
Counsel opposing the laying of additional rails on the L roads,
which, if done, would be a great accommodation to our citizens, as
it would permit more frequent trains and tripe in shorter time
between the upper and lower portions of the city. The Pennsylva¬
nia road expects to expend nearly a million dollars in constructing
an elevated track and in making other improvements. Tbe result
will be an advance in Jersey City property, unobstructed streets,
and a great saving of human life.





The construction of an elevator building at 116th street and 8fch
avenue is a great convenience for the patrons of the L roads
in that vicinity. There ought to be elevators at every station for
the use of the sick, aged, and for women whose health forbids them
climbing stairs. The horse cars now get many customers who
would prefer to travel on the L road were it not for the stairs, A
small charge would be willingly paid by tens of thousands of per¬
sons were such an accommodation afforded.





The policy of the Treasury department seema to aim at demon¬
etizing gold. There is now stored up in the vaults $120,000,000
gold bullion. Of this over $22,000,000 came to this country from
abroad as foreign coin. It was not turned into American money,
but melted into bars and stored away in the Treasury. For ten
months our gold coinage was something over $18,000,000, while less
than $4,000,000 of the $27,000,000 we have received from abroad
was American gold coin. Undoubtedly it is agood thing to import
gold from Europe, but to benefit the trade of the country it ought
to enter into the circulation. Under the policy of the administra¬
tion it is the silver that circulates, while the gold remains inert in
the Treasury vaults. Our readers can recall tbe cry of our news¬
papers, who said : "Why keep piling up silver dollars which no one
wants ?" But it is the silver which has become the active currency,
while gold has been put into bars, so as to be ready for exportation
when the balance of trade turns against us.





The recent dcpreasion in Wall street was largely due to tbe stop-





David A. Wells, in his fourth article explaining the causes which,
he thinks, have led to the decline in prices throughout the world
within the last fourteen years, denies that the demonetization of
silver has anything to do with the depression. This is because
labor, domestic service, British consols, tobacco, wool, ivory and
some other articles have not declined in value. He claims tbat the
scarcity of currency should affect all prices indiscriminately. Now
there are special reasons why eaoh of the articles he mentions
should not have declined in price; of which may be mentioned the
organization of the working people—the disfavor with which
domestic service is being regarded—the killing off of elephants.
These and other similar causes account for the higher wages for all
work and for the higher price of ivory; but the fact remains that
the astonishing falling off in values in nearly everything used by
man has been made to do the duty of measuring values without the
help of silver._____________

The historical fact cannot be disputed tbat whenever large addi¬
tions are made to the metallic currency of tbe world a stimulus is
given to commerce everywhere. In the Middle Ages society was
backward because there was a deficiency in the metallic currency ;
in Europe it was less than $12 per capita. After the discovery of
America the mines of Mexico, Central and South America added
vast quantities to the gold and silver used in commerce. Hence,
in the Elizabelhian age, occurred the revival of industry the world
over. Then we all know the beneficial results which came from
the flood of gold which was poured into the channels of trade from
the placer beds and mines of California and Australia, This great
supply has fallen off, and in addition the commercial world no
longer uses silver to measure values ; hence the disastrous fall in
prices >?hichMr, Welle.t^lls ns pf in his recent publications.   There