New-York tribune., 1886-08-21
TIE TREASURY AND GOLD IMPORTS


Contrary to reasonable anticpations, a move
mcnt of gold from Europe to this country has
been started by a revival Of purchases of Amcri-
can securities on foreign account. 1t was APP
pretended, with much appearance of reason,
that the disagreement OF railroad managers
might prevent any further buying OF secur-
tiles by foreigners for some time to come and
meanwhile monetary pressure III this market
would be likely to grow moIe severe, because
gold imports could hardly be expected without
a favoring balance on the securities account.
The merchandise imports are now so large that,
for the present, even unusual exports OF do
mcstic products would not more than suffice to
keep The foIc gn exchanges steady. But faith
in American investments, when 1t appears
abroad, opens a profitable employment for a
vast amount Of foreign capital which indus
trial depression in Europe renders idle. The
money thus invested may at any time be with
drawn much the greater part of the foreign
purchases of stocks and bonds in late years
has been rather speculative than investing in
character, as experience has proved But a
real improvement In the business and industry
of this county would tcnd to increase such pur-
chascs of both kinds and to prolong the en-
ploymcnt of foreign capital in this field.
Though it is in one sense a borrowing of
moucy from abroad, the operation helps de-
cidcdly to tide over a point of danger arising
from tho financial folly of Congress.
A buying movement of this sort, followed
by shipments Of gold to this country does not
often come to an eud hastily it Is likely to
laot for several weeks unless the conditions of
the money market abroad or Of the securities
market here change essentially. The Bank of
England can Indeed do much TO check exports
of gold from that country by raising its rate
of discount, but there are other countries which
have vast reserve of unemployed capital,
and Germany and France deal in American
securities at times even more freely than Eng
land Nor is it at all clear that the Bank of
England will be disposed to advance the rate
if the bulk Of the gold withdrawn from Europe
comes from the Continent. If the amount IL
not such as to disturb English finances at this
season. Resistance 20 an outgo of gold from Eng
land may indeed appear at any time, but 1t is
neither certain to come at present. nor certain
to he Immediately elective
Thus the changed condition of the inter
national exchanges may to an important cx-
tent affect the operations Of the Treasury and
Tho course Of business here The Acting
Secretary has already issued another call for
bonds step which would have been decidedly
unwise II thcro had been prospect Of con-
hnucd drain of gold from the Treasury but
which involves much less risk if the supply of
gold in the market Is 10 be increased by for
cign imports Presumably the Acting Secre-
tary was advised of the westward movement
of gold before tho later call was issued at
any rate, 1t is less dangerous to the Treasury
because OF tho movement Of specie to this
side. 1t Is not TO be dcnied that the money
market was approaching a somewhat critical
condition. as the considerable ,cdcsnptions Of
legal tender notes in gold at the Treasury had
indicated With gold going out in that way, and
tut httle coming in through the custom
Louscs, the prospect for the Treasury was not
entirely bright and the fact that gold was
wanted rather than legal tenlcrs in this mar
kct did GOT promise continued case. The
change in conditions may arrest the dispoi.
ton TO withdraw gold from active use, which
ha. been the one threatening feature of the
situation, and for which the country is In
debted to the folly and wTongheadetness of its |
lnynal-crs ts'