Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1875-08-11
THE ENGLISH MONEY MARKET

THE ENGLISH MONEY MARKET
A Strange but Transient State Of Affairs
Large Influx Of Gold.
The city article of the London Times
of July 10Th has the following:
"The state of the money market is JUS
now rather peculiar. Gold has been
flowing in upon us steadily ever since
the time Of mercantile publication be-
gan, until we have enough not only fol
more wants than now press, but
enough almost to calm the fears CT the
many who keep looking for worse days
to come. This gold has come to this
country owing to several causes. TIC
some extent the amount of money
owing to us by foreigners has had
an influence, but the bulk of the gold
has come from countries where the
mere balance of trade can have had but
small influence compared with the in.
huence of ordinary mercantile consid-
erations. It should never be forgotten
that the movements of the precious
metals are from some countries, and al
certain times, affected only indirectly by
the actual course OF trade; that bullion
is, in short, itself one of the trading
products Of the world, bought and sold
for the sake of a profit. The bare fig
ures of the Board of Trade for last
month show balance of trade against
this country of good many millions.
just as usual, and the simple effect OF
this as permanent state Of affairs would
be to make foreign exchanges 60 against
us and bullion go away. In the
month Of June, however, as, indeed,
more or less always, the general heavy
liability of the world to us for advances
other than mere manufactured produce
quite suffices to reverse the simple bal
ance of trade, and makes the world our
debtor. Dividends to pay, remittances
of companies who have their business
locale abroad and their shareholders in
England, obligations of foreign states,
all come in to swell the bulk of what is
due to US, and in their natural course
cause money to flow here. Nearly every
country of Importance in the world has
for long time now been suffering from
severe commercial depression, with it's
concomltant low rates for money and
pancity of borrowers. Germany has
passed through a commercial crisis
of a far more trying kind
than we in this country have
realized; Austria has been in chronic
distress since 1878; the United States is
only beginning to hope that trade will
revive after its long stagnation, and
only France and England were seeming
~ standing out unaffected by the wave
of reaction-those two, and perhaps
certain South American states. In all
these countries money has therefore
been for long sort of drug in the mar
ket; even the Bank of Prussia, when
compelled for state reasons to hold its
rate very high, could not keep the open
market near it nor retain the gold, and
had at last to sink to the level of other
German banks, while they all might
have gone lower than they went for the
little business they did. AS natural
with rate at only
three and half per cent, money
began to come here merely be-
cause it could be here employed. It was
to some extent the alternative of getting
that for it or getting nothing. The
United States has been pouring in its
precious metal until we have got over
three and quarter millions more of it
this year than for the first six months
of last, and this, although the balance
of trade in other commodities is from
one to two millions more against us
there now than then-hence, also, the
fact taat there has been no correspond
ing drain for other countries. Many
nations have sent us less than they are
wont to do; but, on the other hand,
many have wanted less. The gold that
has come here has, therefore, mostly
lain here; and we have had full Golfers
when commercial bubbles began to
burst at home.
As we limited the other day, this is
not state of affairs likely to last. Not
only are rates for money beginning to
rise on the Continent, but they are fall
ing here below point at which it can
be to anybody's profit to send us gold.
It is not unlikely that other peoples
trade may be reviving, as ours begins
to recede. And this makes the situa-
ton of our money market less satisfac-
tory than it specifically seems to be.
We are just apparently entering upon
that peiod of depressed trade and eau
tious contraction of business from which
other countries have suffered so long.
Thanks to the freedom, and, we may
say, looseness with which the vast cred,
its at the command of our banking in.
situations have been dispensed to all and
sundry, we passed APPARENTLY without
seattle through the time when other
countries were in distress. Money
never got so dear as to destroy the fra
gile structure on which our security
rested, and it was supposed that we
had got off scot-free. Such notion
can no longer be entertained, and the
numerous failures we have had must
Individually usher in period of dull
trade were it for no other reason than
that they compel banks to stop indis-
criminate lending. There will again be
time when the cautious buyer and
seller will have chance against the
daring speculator, and when discounters
will take reasonable care that the
words for value received on bills of
exchange mean what they say. These
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