Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1882-03-05
THE GOLD GRIPPE.
How it is Pinching EurOpe-Italy Gath
ering Up Hundred Millions
OF GOld-Ameriea
Keeping All Her Gold Productions
How England Influenced GER
many TO Discount Silver.
London News. Februarr 4th.

| ceased For the first time Yesterday no gold
was taken from the Bank OF England, while
a very small sum was paid in. The reserve,
however, has fallen to but little over e, 00O,-
| 600, and that is a sum too small in critical
times like these. The question is how 10 re-
| plenIsh it. AT their meeting on Thursday
| the directors decided not to raise
| the rate of interest, and the general
| opinion of the city is that they de-
cided rightly. The directors doubtless
wished to spare trade, which Is already in
| danger of being checked by the SIX per cent
rate, and would be very seriously harassed
| by seven per eent.-rate. 1t might be bet
| ter TO harass trade little now than to pun
| ish il severely a little later. There is no
great stock of gold anywhere to be drawn
upon, and therefore, ii may reasonably he
urged, drastic measures are necessary TO OBJ
ia a sufficient supply. For some time
there has been scarcity OF gold.
The adoption of gold currency instead OF
a number OF silver currencies by Germany
ten years ago has drawn from other countries
large amount OF the metal, and the re-
sumption of specie payment by the United
States has still further drained the gold-usiDg
countries of their stores. The United States
for four or FIVE years now have retained
all the metal produced by their MINES;
the output from the mines OF Russia
has been retained at home, or has
found its way no turther west than Ger
many and Austria; and the yield of the
Australian mines has been steadily decreas-
ing for long time. Thus We have had an
additional demand and diminished supply
of the metal, and scarcity Is the conse-
quence. The stock held by the Bank of
England was already small, and it has been
reduced to a dangerous low amount by the
drain to Paris. The general opinion is
that the amount sent 10 Paris will come
back again in the course of few weeks,
and that no anxiety, therefore, need be felt
upon the subject but that is only an opin-
ion, and meanwhile, it is unquestionable that
the reserve ia uncomfortably low. There is
one cause disturbing the money markets TO
which we have not yet referred, but which
Tor the present moment Is the most disturb
ing of all; it is the action of the Italian loan
contractors in picking up gold wherever it is
TO be found in any part of the world, and
thus intercepting the supplies th 1T would
otherwise find their way TO the Bank OF Eng
land.
There is superstitious Eotion among con-
tinental statesmen that gold currency in
some inexplicable way Increases the wealth.
producing capacity of a country and raises
its dignity. 1t is a superstition engendered,
no doubt, by the action Of our own country.
England for nearly three-quarters of CEN
tury has had gold currency, and England
is beyond question the greatest of CONNER
cial nations. 1t is hastily inferred, there
fore, that the gold currency has in some
way or other contributed to the CONNER
cial pre-eminence of England. We need
hardly say TO our readers that this is
complete delusion. England had become
the greatest of commercial countries before
she adopted an exclusively gold currency,
and she would retain her commercial pre-
emiuence though she were 10 change her cur
rency now. Ii is no doubt n great con-
venience for a rich country like England TO
have As a stand of money n metal which
contains high value in small compass; but
though convenient, such money is in no way
essential TO the prosperity OF a community
There can be no question, however, that
the example of England induced Ger
many TO adopt the single gold standard
after the termination of the Franco Germa an
war, and Italy nov has the vanity to pro-
vide herself also with gold standard. BY
an act passed in the early part of last year
she decided that her forced paper currency
was to tie put an end TO, and that by means
of loans she would provide herself with
enough OF gold and silver 10 return to a me-
tallic currency. In virtue OF this law she
brought ont loan lat July which was con-
tracted for by Messrs. Barring and Hambro,
by which the contractors bound themselves
to providing the Italian government with
f16,OO0,O00 sterling in gold before the end of
the current year. By the end of December
lasI lney are UNDERSTOOD 10 nave PROVIDED
about &c 900, 900 of the metal and they have
since been buying further supplies.
The contractors have agents in all parts of
the world-in the United States, in South |
America, all over the continent, in Egypt |
and in India, and they seek out all the out |
of-the-way boards they hear of to buy |
them up and ship them to Italy. They are |
most DESTROYS to spare the money markets of |
the world, and more particularly the money |
mo Dot of opHn1 nd Iouhf IF
the gold which they have thus picked up |
would have remained hidden in old stockings |
or old cupboards if it had not been sought |
for and got by them. But still it is evident
that the action OF the contractors is
sweeping up and sending to Italy gold |
which otherwise would find It's way to
London. All experience tells us that when
the Bank of England raises its rate of dis
count, and thus, in bankers phrase, makes
money dear 9TH at is 10 say, offers to capt.
talists a high interest for the use of capital
in the short loan market-gold comes forth
in large quantities from the most unexpected
places and is poured into London. II the
Italian loan contractors had not been before
hand with the bank most of the Sc 900 900 or
S, OOO, 900 which they have picked up would
now be flowing to London, and the Bank
of England reserve, instead oil being so
low to cause anxiety to bankers and
merchants, would be abundant. OF late, too,
the agents Of the Italian loan contractors
have directed their attic ntion to New York,
where the largest stock of gold now avail
able is to be found. Within the last three
Years the United States have added TO their
gold currency at least 100000, and just
now the New York money market is very
ully supplied and very ea~y.- Pit Natural
tendency of the state of things which has
prevailed for the past fortnight in Paris and
London would be to attract from New
York part Of its superabundant supply of
gold but unfortunately the Italian loan con-
tractors had already oh aimed some Of the
urplus gold and shipped it to Italy. 1t is
doubtful, therefore, whether any other coun-
ry but Italy will be able TO obtain any con-
siderable amount from New York. The
gold that is thus taken away from the CONT
lent and from the United States is locked up
~ the Italian government, for specie pay
nents have not yet been resumed in Italy,
md it il, therefore, as inaccessible TO the
business community of the world for the
ime being as if il were non-existing
+ specie payments had been resumed
" Italy, and the gold were put into
circulation, there can be no reasonable
lOubt that it would at once be exported 10
london. Italy is 10 poor country TO afford
gold currency. Her proper standard Of
'alue is silver, and therefore, soon as gold
3 put into circulation it will flow To the
,lsces where it Is in the greatest demand :
nd which are the hest able to pay for it.
t is, however, not put into circulation, but
; locked up in the treasury chests, and
therefore, cannot be obtained, whatever
rice may be offered for it. II Italy
Tere really bene6ting herself, OF course
he would have the right to act as
he is acting; but she is not benefitiDg her
Elf. She will not be able 10 retain the gold
urrency except by some extraordinary and
Djurious measures, and she is therefore dis
nrbing the money markets of the world
-ithout benefit TO herself. But, unfortu-
atEly, the Italian government Is bent upon
sving gold currency, and We fear, there