Los Angeles daily herald., 1890-02-24
Financial Problems.

Money Is extremely ecoaoo -
and America. It is scarce in all parts OF
this country. Why is this? Two years
ago the banks of New York held re-
serves above the twenty-five per cent.
legal limit to the extent OF more tnsn
$25, 900 900. Prior to that this excess OF
reserves, if memory serves Alright, had
run up to more than twice tnat sum-
For the past year the reserves In
the banks of the metropolis OF the
country have at no time run above
few millions, nearly all OF
which have been concentrated in a few
banks. At one time within year only |
one bank in New York held it's full legal
reserve, the deficit in the others amounting
to millions. Where is all this money gone
to-? The Paris Exposition seems to be
the only discoverable explanation of the
present low ebb of the money cur
rents in America and England. 1t is
guessed that the drain on this country
for the expenses of visitors to Parie in
the year amounted to 100000, 900. But
this explanation will not fit the whole
problem. The treasury of the United
States has disbursed, in some shape, in
little over year, the greater part OF
that sum from the surplus accumulated by
the honest economy of Mr.. Cleveland's
administration. Therefore, money ought
not to be much closer today than it was
a year ago.
Nor will the theory of excess of i'm
ports over exports solve the riddle. In
1889 the exports of merchandise from
our ports amounted to 1927 900 600, the
largest ever chronicled in the history of
the country for any year excepting
one. The imports last year were
$770, 100000 so that the net excess
in our favor was $4,000, 900
The net exports of gold were $39 ooO,-
600, and of silver $2O,OOO,OOO leaving
still net deficit Of 100000 after set
Ting the balance between merchandise
and the precious metals too. Usually
about $4,000, 900 of gold settles all the bal
ances of all nations against the United
States. That has been the average for
the last six years.
Another puzzling financial problem is
the drift of gold. England and Ger
many demonetized silver in the hope Of
drawing gold to their Golfers, and drain
ing the other countries of this noblest of
metals. The gold bugs of America tell
US that to replace silver where it Justly
belongs. and in the position whence it
was dislodged by a fraud, would
result in draining this country of gold
and of flooding US with silver. But the
history Of the past twenty-five years does
not establish any such fact. France,
which is double standard country, has
not only more coin in her bank in pro-
portion to her requirements than Eng
land or Germany, but she has more gold
coin there. England has been in state
Of constant terror for a long time
lest her bank should become depleted of
gold. She has resorted to all sorts of
means to maintain her standing in the
commercial world, but she is, in spite of
all her efforts, steadily losing the place
she once held. At times the amount of
gold in the vaults of the Old Lady of
street has been as low as
e19, 900, 900 to EGO, 100000. The Bank of
France has steadily twice as much gold
in her vaults, and is steadily gaining
more while England is losing. At the
of 1889 the Bank of France
had 5000, 10000 in gold and the Bank of
100000. This year the
French concern starts out with $3.50, ,00O,-
900, an increase of % per cent, while
the institution on the banks of the
Thames has dropped to $105 ,0e0, 900,
slight decrease, but still decrease, and
one that alarms the fnanciers of Eng.
land, in view of the fact that the drop is
steady.
SO with the rates of interest. England,
under her monometal craze, finds the
rates at the bank range all the time at
5 and per cent, instead of the GUS
tomary to per cent. and the rate in
France pursues the even tenor of its way
at about 21a per cent.
The ablest fnanciers Of the world try
to account for these queer currents in
the monetary affairs of the world, but
there is not one of them that can more
taan guess at the reasons for them. 1t is
to be remembered that important as
money is in the affairs of the world, the
fsrthest we have got even in these
days of progress, is clearing house for
| some OF the large cities. There has not
yet been thought of national clearing
house, and an international one is an
idle dream. Yet both must come in
time.
| MR.. KAUFMAN, a German editor OF
| Cleveland, Ohio, an interview with
whom appears in the HERA1D's dis
patches this morning, gets at the root oi