, 1872-11-17

OF Nov. 2 seems to be from German in Lon
don, and is valuable for facts and for reference
standard in Germany. second-The Bank Act
in England, and thlrd-the Want OF banking
facilities in Germany:
THE CIRCULATION OF GOLD IN GERMANY.
,'To the Editor Of the Economist:
."s1R: Having read your valuable article On
the money market Of last Saturday, beg to
draw your attention, with regard to German
finances, to certain facts perhaps unknown or
misunderstood in this country. ]. quite agree
NTH you that Germany is in possession, as well
Of the 81, 600 900 disappeared from the Paris
Bank since 1870, as OF the many millions more
drained from here; but, according to Parliament
airy documents, the military chest, as you call
it, holds Of it only Fl 500 900 sterling more than
it always had before 1870 or 1866. The Ell, ,00O,-
600 sterling worth Of gold coined already into
ton, or at least as much open to it as any hard
cash in the Bank Of England; and il ne do not
yet discover much OF it in the hands or pockets
OF the public in general, it is because since the
admission Of gold in Germany as . legal stand
ard, With g great chance Of soon becoming the
sole legal standard, the German banks, private
and public, try to keep their spare cash quietly
IN the new gold coin and to get rid Of their sill
yer: The present overwhelming demand for
gold is, therefore, not the consequence Of Ger
lows out Of the adoption OF standard alte1a-
ton IN country where cheques and Clearing
Houses are almost unknown, deposits there
fore insignificant, where no central bank,
IS the Bank Of England, balances hun
d1eds Of millions without the nse Of q
single sovereign or bank note. Yet Germany is
as thriving country as any in Europe. But We
have to deal, under these circumstances, with
3 sudden change Of money standard suggested
and supported by 3 colossal ransom to be paid
in hard cash within q given time which will, and
must. drain the gold market till either the re-
tanning Of the double standard is settled-a ques-
ton expected to be decided by the next Reich
stag-or till better outlet for silver than at
present facilitates the exchange.
: The raising Of the discount in this country
cannot thwart the purpose ct Government
bound to certain changes, and possessed of
ample means to do it. On the contrary. the
higher the premium the more these meana will
lead to q command in the market and although
by that process We shall undergo certain tempo
rary ease, We must expect for q time sudden
fluctuations, and Ein again be made aware that wa
Labor under Bank act based more upon frnre
than principles figure which, at q time when
10 900, 600 Of gold we're considered q comfortah1e
stock at the bank, because it allowed an issue
OF 150 cent uncovered notes, with 10000. 900 or
IS 600 900, and claims grown in proportion.
limits the Issue to rs or go per cent. We're car.
many encumbered with the same act, the Prns-
alan Bank, with upward q, ,00o, 900 hand cash,
and circulation Of over 10000, 600, would have
succumbed already, while the principle that one
third or two-fftbs Of issued notes, covered in
gold, is sufficient for general purposes allows the
Prnasian Bank to dispend its bargains at per