The Helena independent. [volume] (Helena, Mont.) 1875-1943, 1891-06-10
THEY PREFER THE CASH.
Foreign Bankers Would Rather Call In
balances Than Draw Interest

Hhsl Wy tue QhHNluU Hifu OI ileuTy OIoWD O
Go. says that Wall street has been some
what disappointed during the past week at
the non-cessation of tho exports OF gold.
hsnrly $7,0000 600 of specie has beon sont to
Enrope within the six days in the way of
regular exchange transactions, which shows
that there is still outstanding foreign bal
ance against as, and that European bank
ers prefer to have ii settled in cash rather
than to allow it to remain here earning In
terest. This disposition on the part OF our
foreign creditors is not remarkable conaid-
ering the good rates at which they Gal, Just
now employ their funds at home, and In
visw also of the fact that the great state
banks are using all their influence to in
duce foreign bankers to keep their metallic
reserves within ready reach.
The amount Of gold already received
from the United States would, under ordi-
nary circumstances, amount to Rlut
which would induce a quick refiuI OF a
good portion Of that supply. But the cir
cnmstances at present affecting European
finance are not ''ordinary'' ones. To say
nothing of the lingering after effects of tho
South American disasters still re-
main u serious element of uncertanty---the
relations of Russia to the continental and
! London money markets constitute a grave
source OF disturbance. The question ia not
so much whether the country in either able
or likely to call for more gold; for it seeems
to he generally conceded that Russia has al
ready withdrawn nearly all her funds frorn
foreign repositories, the point of anxiety is
as to whether the czars government
will disbnrse the money in redemption of
4 ~ ntt Al
run and keep the gold. Were the European
money markets in Il condition to admit of
the negotiation of Russia's proposed new
loan, no doubt redemptions of the old loans
would be made that would return con-
| siderable amount OF gold to Holland, France
and Germany; but the Rothschilds still
| postpone that operation, and Russia has on
| hand SO manv ambitious schemes requiring
| large home expenditures that she is likely
/ to prevent any retiux of gold across her
/ boundaries, and in that case the continent
! tai banks may sHiier from scarcity of gold.
/ Moreover, Gussa's outrageously inhuman
/ treatment of the Jews is producing such
deep resentment in the worlds public
opinion, that there is liability of its
becoming q matter of earnest diplomatic
| protest. which means III effect new and
sensitive element i'll the possibilities of
war. Beyond these contingencies, the bad
| prospects of the European haryests suggest
r certainty Of England, France and Ger
many having TO export considerable
amount of gold for the purchase Of cereals
within Immediately approaching months.
| Under these circumstances. ii seems rea-
sonable to expect that, go long as the bal
ance of trade with this country gives Eu-
| rope the option of drawing gold from Us,
| the oppo tunity will not be neglected. 1t
! is this disposition, and the fact that We
| have not yet fully liquidated our current
| floating indebtedness to Europe, that ac-
counts for the continued free export of
specie during the past week. 1t has very
rarely happenad that We have been sub
/ jecyed to 60 much pressure to ilquidate our
| maturing foreiga debts i'll cash as ia now
! beng experienced; and, with the rage for
| increasing banking reserves that now ex-
| lists across the Atlantic, it Ia not easy to say
when the drain may be stopped by the ces-
sation OF an adverse balance OF lnte ma
| tional settlements.
! These are clearly conditions that call for
caution at this centre. 1t ia true that the
| situation in London has shown consider
able improvement within the past week.
| The bank of England has gained A3, 100, 0O1
| in gold, making total increase for the last
three weeks of 49,, ,000,o0o, while the pro-
! portion of reserve to liabilities stands at
/ the extraordinary rate of ABS per cent; and
under these circumstances tine bank has
naturally reduced its discount rate from
| to 4 per cent. But strong as is this state
ment. our week export of gold shows that
| the bank is willing to still further augment
| lta accumulation OF each. The only
satisfaction we can lind under these
extraordinary movements Is In the un-
varying rule that a wide swing of tho
| pendulum in one direction is followed by
one proportionately wide in the opposite.
| The question is whether the change will
come IN time to prevent stringency in the
| New York money market. That question
is not easily solved; and we advise onr
f,,, la I'm
| rather than to jump to conclusion. The
situation suggests hope as we'll rs caution.
For while We have $50, 100000 of metallic
money drained off from our circulation, the
large special disbursements of the treasury
last fall and the creations of new silver
currency mora than compensate for the loss.
And, as might have been expected. the in
fatiou of the circulation has caused money
to flow to this city from the
interior in libe,a! volume for some
weeks past, whilst. judging from
tho continued high premium on New York
exchange at the interior and at coast cities,
there is more yet to come. Still, conceding
the probabilities to be i'll favor of IN early
end of exports of gold and of continued re-
ceipts of money from other cities, the non
realization of these probabilities would pro-
duce u disappointment which might serl"
ously affect the money market and cause n
, free selling OF securities. The bears are
perhaps over-discounting that adverse
chance, and the consequent over-Sold con-
iition of the stock market is the mainstay
of prices ut the moment. Prudent opera
tors however, Will defer large transactions
ON slim margins until the future drift of
market Influences haenmss more apparent
III the meantime, there Ia no abatement OF
the splendid prospects of our crops, and all
S, ,mptoms foreshadow season of excep-
tional traffic for the reilroads, so that the
intrinsic value of an important range of
stocks at current prices Is unquestionable.
Iii, ~