The New York herald., 1873-11-08
Total liabilities.

Total nabilitleS .42e, oOo, uoo
that their amounted to two-ilths OF their
for in 1925 the till OF the Bank was found empty.
In that year the convertbity OF the note was pre-
served not by the magnitude OF the store OF coin
and bullion, but by the happy belief OF the public
that no sucn store was needed. But the calamitles
OF 1925 were mainly OWING to mismanagement
after specie payments were resumed. II the re-
serve with which the Bank began specie pay ments
in 1921 had been maintained III 1925 the panic OF
that year would never have occurred. The mis-
take was not In commencing specie payments with
an inadequate reserve, but In afterwards neglect
ing the reserve and letting 1t dwlndle. The re-
operation In itself ialry successful.
In America the first condition is not satisfied.
Gold varies between los and 11o, and If, with
premium Of to 10 specie payments were resumed,
large amount OF gold might be required. I'm
scrupulous and combined operators are ready 20
seize all advantages, and they would aggravate
the situation.
still iurIher reduced before specie payments can
be safely recommended. In America 1t Is thought
that this panic by the "shrinkage OF ofvalues''that
is, the reduction OF prices which 1t has caused
has grea tly increased the facility for return TO
specie payments But the dimisgtlon MN IN the @ paper
ing this object 1t Is by the amount OF the pre-
MUM on gold in comparison with paper that
its safety Is to be measured; and, by destroying
money "corners'' and much vicious speculation
in gold, that panic has no doubt been a sensible
help. The premium on gold, which had been un-
duly raised two or three per cent has now been re-
duced to It's natural amount: but so long as that
premium stil remains high as 1t now s, the risk
OF a return specie payments will be considerable
Nor are our second or third conditions satisfied
The store Of gold now held by the American gov
ernment is altogether inadequate to the resump-
ton OF cash payments. The amount OF coin in the
Treasury Is f16g65,O00, and the actual legal amount
OF greenbacks IS fe5, 265 Ooo and TINS amount mas
just been exceeded by the reissue, with contested
legality, OF greenbacks withdrawn from circula-
tton The specie Is therefore Just fourth part OF
the liability on the currency. amount plainly In
adequate to the burden OF so large a Inability.
Happily, however the American government has
no difficulty IN obtaining any amount OF gold which
1t may require. 1t receives It's customs duties In
gold, and these amount TO more than the interest
which 1t has to pay in gold. 1t has for years sold
geld y t aa mas bas ,as @ IN
selling, and II Will receive OF necessity much
gold as 1t may desire. In this way 1t may accumu-
late gradually sufficient reserve in gold to meet
the first demand consequent on resumption, while
there is any kind OF premium on gold as compared
with the paper ana TO meet also the permanent
liability involved IN the promise TO pay on demand
so many millions. The American government has
no difficulty in accommodating the gold; its only
difficulty is the necessary diInlnution OF the pre-
MUM on gold.
France has not the facilities OF America for
amassing gold, ana the Economist draws con-
trast between the financial situation in either
country. The writer concludes:-
America would compete with us for the store OF
specie in the world; the present panic would nave
caused Infinitely greater demands on Us II the cur
rency had been metallic, all other things being as
they now are. The gold would not then have been
article OF merchandise, but means of pay
ment. When the American standard agar con-
siss OF gold we shall pc always liable TO have our
supply OF gold interrupted by her wants. and even
to have gold taken from London to supply them
We may expect France TO help us IN Keeping tue
gold store OF the world 1t is suitable TO her char
acter quiet accommodating nation but we can
not expect America TO do so. She Is the country
which surpasses all others IN the means OF employ
ing money and in the hardhood, not to say the
recklessness, with which she uses them.