Savannah morning news. [volume] (Savannah) 1868-1887, 1882-03-13
The Expectation of Gold and Bal
anee Of Trade.
Chicago Tribune.

ance Of Trade.
Chicago Tribune
We print from a London paper a verv
pessimist view of Americas finances and
commerce. as they are understood in
British circles While there is much
that Is true in the article, and consider
able that ought to be instructive 20
Americans, there is, however, in the
what is supposed to be deep injury to
our trade evidences of healthful recovery
from what threatened to be calamitous
fever.
The flow of gold to this country.
which has been continuous for several
years, was an evidence of national finan-
cial prosperity. 1t did not begin until
the great bulk of American national
securities had been sent home, and when
these were exhausted the gold followed
because it had to. The importation of
gold, however, continued beyond the
point of healthy exchange. 1t continued
beyond the point where it was at all
needed in this country and produced in
f1ation and redundancy 1t continued
until the stock in this country had far
exceeded $3.50, 100000 of gold, being
greater sum than was held in
Great Britain, where gold is
far more needed in business than
it is in this country, which
depends more on paper. The natural
result was an immense initiation of values
and wild speculation. There was rapid
rise in the prices of all commodities.
Bonds and stocks of every variety ad-
vanced enormously in prices; railroad
stocks that had not paid dividend for
years and which had ceased almost to
be quoted were inspired and put on
the market and sold at par and above.
Capital was withdrawn from legitimate
business and put into stocks, and the
gambling among the dealers became
intense and absorbing. Speculation
grew wilder as the surplus stock of
gold in the country increased:
wages and the prices of materials
increased; the cost of producing manu-
features got so great that expectation
thereof declined, and imported. goods
filled the market. Wild and unneeded
railroads were projected, and steel rails
were purchased for them at $40 to $50
per ton. The so-called "balapce of
trade" was exhausted; our usual exports
were too costly to find purchasers
abroad, and it became. despite the high
tariff, profitable to import all the goods
we needed. This condition of things
could have, sooner or later, but one end.
and fortunately the end came in the form
of a check, or an arrest, instead of a
general crash and a panic.
The expectation of gold to pay debts
abroad, over which the London paper
moralizes as an evidence of the tenn
porary character of American trade, was
really a providential circumstance II
was warning that initiation had been
carried to excess, and that the wild
schemes and kitedying of the stock mar
ket had gone on as far as safety would
tolerate. The railroad earnings had
fallen off so much that the high
prices of stocks could no longer
be maintained. The construction of
railroads by wildcat corporations was
stopped; bonds and stocks which had
enjoyed a season of booming grayifated
from the fictitious towards a substantial
value. Wages had become so high and
production so costly that even the steel
rail monopolies and their ''protectede
employees had come in collision There
was general set back reaching to the
collapse of attempted corners in the
breadstuff and provision markets. In
fact, imitation had received a stab. and
instead of the effect being fatal or iniu-
rlous TO American trade and prosperity
1t was healtbful symptom Il was an
arrest of what was rapidly growing into
q prolonged debauch.
Though the shipment or export of gold
has been comparatively small SO far the
balance in the way of exchange is so
close that at any time it may be renewed.
and 1t will not follow that the country is
injured, even if much larger sum of
gold shall be exported during the next
three months. 1t must be borne in mind
that the product of the American mines
equals three millions of gold dollars a
month, and this is in addition to the pro-
duct Of silver. The vast accumulation of
gold in the country has, with the con-
tinued production of our own mines.
given us great surplus of metallic
money, and has therefore inflated prices
beyond healthy and profitable maxi
mum. So long as there is c)in enough
in the country to protect us against anv
depreciation of the paper money the ex-
cess must be a constant invitation to. if
not direct cause of initiation. Initiation.
- NSN-AoNS OOe DCuOO anu
vites Importation The expectation of
gold to the extent of putting an end to
initiation, instead of being an injury and
loss, would be great national benefit.
The English writer is correct in his
estimate of the amount of American in
debtedness held in the various countries
of Europe. Bonds and stocks of the
railroads, States, municipalities, gas
companies, water companies, and other
American corporations are held in i'm
mense amounts in England, Germany.
Holland, and in all the free cities of En-
rope. The annual interest aud dividends
earned by these stocks and bonds which
go forward to the older countries should
be remembered as a drain-silent. hut
not the less important-of gold from
this country. 1t may not figure in the
actual shipments of gold, but in the gen
eral balance of the exchange account it
seriously reduces the seeming balance in
our merchandise statement. The Lon
don paper, however, is sadly mistaken in
the supposition that the occasional expor-
tation of gold from this country involves
a collapse and prostration of American
trade or American prosperity.