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bcitober i, 1890
Recorcl and Guide.
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DD/bXED TO 1^ Estate . BuiLoiffc A^rrECToi^ .HowseHold Deoor^twI.
BusiWess Alto Themes of CeHei^I Ij<tei\.est
PRICE, PER TEAR IN ADVANCE, SIX DOLLARS,
Published every Saturday.
Tblkphonk, - . . Cortlandt 1370.
Communicatims should be addressed to
C.W. SWEET, 191 Broadway.
J. T. LINDSEY, Business Manager.
OCTOBER 4, 1890.
THE stock market in this city during the past week has been
dull and characterless. The final passage of the McKinley
bill had no appreciable effect, and neither the bears nor the bulls
showed animation or confidence. The adjournment of Congress
generally provides an excuse for the purchase of stocks, but not
even the certainty that there would be no further changes in the
laws, and consequently interruptions in trade, could cause activity.
Meantime the state of business, outside the stock market, has
remained the same—that is, exceptionally prosperous. Manufact¬
urers are in many cases a couple of montt.s behind their orders,
and in spite of the enormous importations in anticipation of the
McKinley bill, the demand continues good. Bank clearings have
never been so large; and the iron trade is still prospercus. Further¬
more, the exports from this and other ports have heavily increased.
Neither can the decreased net earnings of the railroads be
regarded as unqualifiedly discouraging feature. As we
minted out last week, this does not mean a falling off
in the amount of freight handled; but simply low rates owing
to strenuous competition. At the same time, after making due
allowance for the prosperity of general business, there are aspects
to the money market which are causing alarm in Wall street. The
importers are making demands on the banks, and will continue to
do so, in order to carry the large stocks of goods recently brought
from abroad, as well as to pay for them. In consequence, although
money is loaned at call at very low rates, money on time is diffi¬
cult to get, the price being stiff. Brokers are imeasy, in conse¬
quence. It must be remembered that the government will not
make disbursements next January, the interest payments
having been anticipated. In regard to foreign business conditions
and their effect on our market, there are no new developments.
The talk of retaliation against the provisions of the McKinley Bill
seems to be subsiding. Both Russia and- Austria, however, are
considering changes in their financial systems which may effect us
in time. It would not be difficult for either of those countries to
return to specie payments at the present juncture; and the pprticu-
lar form of specie payments discussed is a gold standard. The
effect of this would probably be, as in the case of Germany, to
throw large amounts of silver on the market, which, under our
silver legislation would be sold to this country.
IN^the current number of the Forum, Prof. F. W.'Taussig, of Har.
yard, has an interesting article on the " Working of the new
Silver Act." It deserves careful consideration, for the facts and
the inferences it contains are of the utmost importance, especially
the latter, if they be true. The article is all the more valuable
because it is not written in a controversial tone. It is merely an
endeavor to anticipate, as far as possible, the reasonably probable
outcome of recent legislation. Prof. Taussig points out first of all
that the present act makes no important change in the provisions
of the "Blandact" of 1878. The difference lies chiefly in the
amount of silver fo be issued; for the change in form from silver
dollars and silver certificates to Treasury notes, redeemable either
in gold or silver, at the option of the government, is not of much
importance. As to the difference in the amount, the annual issue
imder the old act was about $30,000,000. whereas now it will be
between $50,000,000 and $60,000,000. In answering the question:
What effect will this larger issue have on the gold standard and on
general prices?. Prof. Taussig points out the serious error
which arises from the under-estimation of the part which credit plays
as a medium of exchange. He says the most important single item
of the purchasing power of this country consists of bank deposits
and bank checks. By means of these, all the large transactions and
a great proportion of the smaller ones are carried out, so that
this is really tbe chief part of our currency; and notes of all
denominations whatsoever are really subsidiary. The issue
of silver in the past had so little effect, he thinks, because
neither silver nor gold has played the chief part in our monetary
system. Indeed -in 1878 when the Silver Act of that year' was
pasaed, thebanks, and especially thebanks of New Tork City, boy¬
cotted silver by refusing to use it as a part of their reserve, and by
agreeing not to settle balances between each other at the clearing
house in that metal. Thus any amoimt which was not kept in
active circulation found its way back into the government treas¬
ury through the doorway of public dues. The growth of business
in the United States requires an addition to the currency every
year of about $20,000,000 in denominations of $20 and less, so
that it is easy to see that when the annual issue is increased by the
new act, there will be a large surplus over and above require¬
ments that cannot but have a great effect upon the business. Mr.
Taussig thinks that at first it will be impossible to get $60,000,-
OUO a year of new notes into circulation. The government
will have to hoard the excess; but as this can be possible
for only a short time, it will have to force the
issue of the new currency, and this, says Mr. Taussig, would bring
about •' surely a period of inflation with all its intoxicating and
demoralizing effects." This will end, he says, in the breaking down
of the gold standard. Gold will flow out in foreign payments and
the National Treasury may be drained of its gold. Prices will rise
and all the phenomena of inflation will be visible. Prof. Taussig,
however, evidently perceives the weakness of his position and rec¬
ognizes that he has a foothold only on very shifting ground.
The calculation is based upon a number of estimates as to the value
of several unknown quantities. For instance, how rapidly will the
old i^nk notes be retired? for the place of these will be taken by
the new currency. And again with the growth of this country
and the expansion of its retail trade, may there not be required
much more than $20,000,000 a year ? The banks, too, may use
silver for reserve in the settlement of balances at the clearing
hotise; and any of these contingenci«:s, or all, will tend to defeat anti¬
cipation. Mr. Taussig recognizes these facts, but he hardly gives
them the importance they deserve. He states them by way of
parenthesis, so as to hedge himself round with justification, if the
course of events should prove him a false prophet. We believe
it will, surely so far as gold shipments are concerned.
WE notice that the County Democracy organization of the
19th Assembly District advocates a department of building
for the city independent of all other departments, and have passed
a resolution urging the nomination of T. Hugh Boorman in order
that the reform may be pushed at Albany. As our readers know,
The Record and Guide has been advocating such a measure. At
present an architect has to file separate plans at the Fire Depart¬
ment and the Health Department and before the building is com¬
pleted and fit for occupancy has to get several permits ; for water,
gas, ete. This entails a great deal of unnecessary expense, probably
amounting to at least $100,000 a year, which, of course, comes out
of the pocket of the architect or the builder. It is quite unneces¬
sary. A consolidation of the departments under one head, so far
as new buildings are concerned, could easily be accomplished and
would result m a great saving of time as well as of money. We
hope the County Democracy of the 19th District or any other politi¬
cal organization will take the matter up and push it through to
some result. We are certain if the matter is only brought before
the public in the proper way it will receive general support.
THE termination of the brick boycott was a little unexpected ;
but it was none the less a welcome fact. A full report of
how the matter was brought to a close is printed in another
column with interviews with some of the manufacturers and
members of the labor organizations. The most important fact
which the contest has revealed is the powerful opposition which
Capital can make if it be organized. In past troubles Labor has had
the advantage for this reason, and there is very little doubt that
the most serious outcome of the difficulty just ended for Labor is
that it has demonstrated to its opponents a method which
had not been previously used. That the matter has been terminated
so speedily gives chance for some activity in building this season.
It is not to be expected that all the work postponed will now be
undertaken. A considerable part of it, undoubtedly, will be car¬
ried over to next season. Nevertheless, something has been gained.
There is yet time for us to see a fairly active season.
NOW that William Steinway has returned from Europe, doubt¬
less Mayor Grant will not lose much time in redeeming his
promise to reappoint that gentleman and his confreres on the Rapid
Transit Commission to their former official poeitions. We have
already expressed an opinion as to the futility of such a course, and
we refer to it at the present juncture only for the purpose ot direct¬
ing attention to a letter which was published in The Record and
Guide on the 7th of May, 1887, and which makes interesting read¬
ing in relation to the route selected by Mayor Grant's Commission
last spring. This letter read as follows:
Editor Record Ain> Guide :
You are mistaken in stating that an underground tunnel is to be built
under Elm street from the 42d street depot to the Brooklyn Bridge. Tho
arrangement is for a four^irack ekvated rood, which is to be constructed