Columbia University Libraries Digital Collections: The Real Estate Record

Real estate record and builders' guide: v. 41, no. 1055: June 2, 1888

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June 2, 1888 Record and Guide. .^t ESTABLISHED "W W^VCH 21'-i De/ojD) to flE^I■ ESTftlE, 0UlLDlf/G Af^cKITECTJI^E .(^OUSElJoLD DEGOR^TlOfl^ Basir/Ess Ai^D Theses OF GeHeRAI-IJ^f^f^EST PRICE, PER YEAR IIV ADVAIVCE, SIX DOLLARS. Puhlislied every Saturday. TELEPHONE, . . . JOHN 370. iommunications should be addressed to C.W. SWEET, 191 Broadway. 7. T. LINDSEY, Business Manager. Vol. XLI. JTJNE 3, 1888. No. 1,055 The financial situation ia anything but reassuring. Things seem to be going from bad to wore^. Stocke are depressed in the face of large money accumulations. Iron and steel are sluggish—the price of tin has not revived; copper will be the next to experience a sharp drop in prices ; wages are being reduced in every department of industry, and the number of the unemployed steadily increasea. Lower wages means heavy losses in the retail trade of the country and final disaster to all wholesale busmess and manufactories. The most hopeless sign of all is the stohd indifference of Congress and the Administration to the depressed condition of the businesa of the country. The farce of bond buying to release the surplus money in the Treasury is stUl continued, but there is no real relief from that source, as money is easy because uo one wants it for business pur¬ poses. What is needed is public eonfidence^some assui-ance that new business enterprises would be profitable. This, however, is out of the question while prices continue shrinking. As the Financial Chronicle points out—a reduction in the revenue by the passage of the Mills bill, or even au abohtion of internal revenue taxes, would give no permanent rehef now. "What we requu-e is the starting of the wheels of industry into motion again. This could only be done by using the surplus in the Treasury pro¬ ductively ; that is, by river and harbor improvements, by reviving our foreign commerce, by worka for harbor defenses aud the like. Then we ought to add to the currency of the country to keep pace with the rapid growth of our population and the resulting increase of our business. Ou this latter point the Chronicle says: Reduciug annual expanses to about the minimum, we cannot, with the shaking fund requirements continued, expect to bring the needed revenue down at present very much helow ?300,000,000. That means the taking, on the average, of $6,000,000 each week or 41,000,000 each working day, out of the channels of commerce, and puttmg it into the Treasury vaults. One may say fchat concuiTently another mill inn will come out on disburse¬ ments. Ent even admitting that, we have to remember that the payments to the government have to be maiuly in currency—gold, silver certificates or legal tenders. This is fixed by statute so far as customs dues are con¬ cerned, and consequently several miUions of ciurrency must be aU the fcime occupied doing government work, and cannot be of the least use to the money market. Besides, in practice, if disbursements are left to take theii- natural course, a million does not come out when the same amount goes in. The natui'al order would bring payments more in lumps. This is always ti'ue of interest on the govei-nment debt—it is collected gradually during three months and put out at the end of the time. It follows that in estimating the amount of currency in the country we must keep in mind the fact that the government ren¬ ders a certain portion of it inert. It is kept out of cu"Culation by our sub-treasury system which locks the money up. In other nations the surplus funds find their way into the national banks and are immediately available for the purpose of trade. This sub- treasuiy system was adopted when the mercantile business of the countiy was very limited; it has now got to be enormous, and we want all our funds constantly in the channels of trade. The Chronicle hints that we ought to have a national bank as has other nations, though it does not say so in so many words. If we had such an institution the currency of the country would be always available for the purposes of trade, and this would deprive the Secretary of the Treasury of the monstrous power he now wields over prices. It is at his personal option whether values go up or down. Prices advance when he lets the Treasury money loose and are de¬ pressed when he retains the funds In the Treasury. Agaiu we quote: When the Independent Treasury law was pasaed, a few millions covered the total receipts and disbursements of fche departmenfc for a twelve month. Government operations were at tbe time only a side show; now the Treas¬ ury is the largest manipulator of money in the country. Since that period too the volume of commerce has multiplied very many times; financial operations have grown to reach what would have then seemed fabulous figures; and all industrial interests have become emphafcicaUy one, tied together by means of railroads aud telegi-aphs, and correspondiugly sensi¬ tive everywhere to even the fear of monetary disturbance. The eame authority does not think that even if the revenue from the tariff should be cut off by seventy-five milhons that there would be much diminution of the permanent government income, for the experience of all growiug modern nations is that lower duties eventuaUy involve larger miportations and a corresponding increase in the revenues. The surplus will still continue to be a standing menace to business even should the tariff and tax imposts be reduced this session. Hence what we really need is a wise system of expenditure for pubhc improvements which affords the most sensible outlet for any sui-plus' in the Treasury. There are thousands of worthy objects upon which to spend the Treasury accumulations, but the countiy should mianimously declare that there must be uo more swiudhng pension appropriations, and that the Ti-easm-y Depai'tment must at once put a stop to the supremely i-uinous pohcy of making a gift of the Treasm-y surplus to the rich corporations and wealthy owners of our government securities, The readers of the daily papers must have noticed that very little is now said about silver coinage driving gold out to Europe. The Times, Tribune, Herald, Evening Post, Commercial Advertisei- and all our financial jom-nals predicted that the Blaine bUl, so caUed, if made a law would ruin our national credit and expel what httle gold we had out of the country. These statements were made day after day from 1878 up to about 1885. Yet, in the fii-st year our government bonds yielded 6 per cent, to their holders, while in the latter year they returned barely 3 per ceut. In 1878 the store of gold in the country was about two hundred milhon. According to the last mint report it is now over seven hundred and eleven miUion. It was idle to point out our growing store of gold to these alarmist editors, aud they were backed up in then- gloomy forebodings by such auihorities as Senator John Sherman, and by, everybody in Wall street. To dispute the fact that the coinage of silver meant ruin seemed to the average reader of our daily papers like question¬ ing the law of gravitation. Even President Cievelaud was so impressed with the impending calamity that he went out of his way to implore the Democratic majority in Congi-ess to abrogate the silver coinage act and so save the community from a disastrous panic. This was before he took his seat in the White House. But the majority in Congress was wiser than President Cleveland. The New York editors and all our bank officials refused to demonetize silver completely, and then we had a revival of business, which commenced in the summer of 1885 and continued for two years, our gold store steadily accumulating aU the while and our national credit getting better and better, as was shown by the advanced price of our Federal securities. The only New York jomiial which showed a glimmer of sense on the silver question was the Sun, but, like the other papers, it was under the haUuciuation that we were on the road to a silver basis, whicii it thought would be a good thing in itself. Yet. as the figures proved, wlule we were accumulating our gold we were steadily exporting our silver. We pointed out frequently that if we were to have a single unit of either of the precious metals gold would be prefei-able to silver, as we had nearly two doUars of tbe yeUow metal to oue of the white. A demonetization of the superior metal would involve a frightful contraction. Our contention always was that the growing commerce of the world requh-ed all its gold and aU its silver and all the paper that could be convertible into the precious metals, and that any one who advocated a single unit of gold or of silver was an enemy of the human race, for mankind would be steeped to the hps in misery if either one or other of the precious metals were demonetized. The Sun now comes to the front with the foUowing amazing statement. Speaking of the copper syndicate it says: The bimetallists propose tbat the great commercial countries of fche world shall enter infco a syndicate fco buy aD the silvei- fchafc can be produced at a fixed price in gold, say oue-sixteenth of au ounce of gold for au ounce of silver, the market price now being one twenty-second or one tweuty-thij-d of an ounce of gold for an ounce of silver. So long as the syndicate held together it would keep the price up to whatever peg it fixed, but the enhancement of fche price would so diminish consumption aud increase pro¬ duction that the silver syndicate would in the end, like the tin and the copper syndicates, flud itself loaded up wifch a commodity for which there was a I'esfcricted demand. Gold mines would he closed and sUver mines would be opened just to the extent that it would be cheaper to mme silver and buy gold with it than to mine gold dh-ectly. Of course this scheme was evolved from the inner consciousness of the Sun writer. There has beeu no proposition to buy up the surplus sUver of the world, unless it might be by some inmate of a lunatic asylum. Wliatthe bimetalhsts ask for is a return to the state of things which existed for seventy odd years, before Bismarck demonetized sUver in Geiinany wheu he was in receipt of the enor¬ mous indemnity from France, which he took mainly in gold. Under the old state things on the continent of Europe thei-e was a free coinage of silver as well aa of gold, the ratio between the two being fif teen-and-a-half of silver to one of, gold. Under this free coinage something over a thousand miUion of silver was coined iu Western Eturope. England adopted the t^,old unit for the British