St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1891-05-27
THE MOVEMENT OF GOLD.

llOn Ol SOlu. III Iile SEVEN QdyS eLuluS
| May % this amounted, in round num-
| bers, to $1,000. COO, and it is estimated
that in the space of little more than a
month, during which this movement
has been prevailing, more than $50, 000,-
! 900 of the precious metal has left the
country. Such an experience in so short
a time is absolutely without precedent
in the financial history of the nation,
and, under ordinary circumstances,
would have resulted in the intensest
stringe ncy, with high rates for loans,
loss of confidence, confusion and many
failures. That these things have not
followed is matter of great congratu-
lation, and, if the extraordinary drain
IAN be stopped at this point, it is felt
that the period can be weathered with
out serious consequences.
Part of this gold movement is due to
internal causes. but largely and mainly
to the contemporary complications in
foreign financial circles. When it was
evident that the MCKINLEY bill would
be adopted. and that prices would be
raised by the increased duties for which
it provided, there came for several
months most unwonted and danger
Gus activity in the Importation of for
eign commodities. Everybody stocked
up to the full limit of his capacity be-
fore the rates were changed, so as to
reap the profit which would accompany
the expected rise in values. Our nation
al imports during this time exceeded by
about 5000, 600 month the figures at
which they had stood during the cor
responding months in the year before.
Exports continued, however, at practi
cally the same point; and, with such
balance against us, to adopt the phrase
ology of the mercantile system, the diff
ference had to be made up in money.
With normal conditions an exchange of
S30,000,000 to S40,060,000 in coin for
like amount of merchandise is no hard
ship, but when such an eXpendi-
ture is concentrated in the course
of few months. and the mer-
chandise accumulated is not imme-
diately convertible, period of serious
tightneSs is sure to ensue. 1t is precisely
like the condition Of the individual who
has locked his money up in property
TOR which there is no ready market.
His money is gone, and although he has
value for it he cannot eat or wear what
he has, and is forced to the narrowest
economies in spite of the possession of
great resources. Even if there had
been no reasons abroad to account for
the panic in December. times would
any way have been hard with us, be-
cause of the confusion the tariff tinker
ing of the last congress occasioned.
But the condition in Europe was very
extraordinary, continues so to this day,
and the end is not yet in sight. 1t is
based primarily on the South American
troubles, which exceed in wonder and
magnitude anything recorded in the
annals of financial folly. In an incred-
IDLY short time the wealth of England
poured into the Argentine Republic to
the extent of $4,000 600 for investment
in enterprises which never had any sub
stance or promise, and which have now
faded away, leaving nothing to show for
their having existed. The record of
fictitious schemes inaugurated in be-
wildering succession would fill book,
and out of them all there is hardly one
or two which could commend them
selves to people capable of analyzing
the merits of such things. And yet
they all were readily supplied with
funds for their prosecution by the bank
ers of England, who wed with each
other, not in critical discernment,
but in the widest probability Of
course the crash came, and when it did
the immediate conversion of securities
into money was imperative. The Eng
fish capitalists had to have cash to meet
their obligations; and with so much of
their wealth in South American stocks
and bonds, fictitious in their inception
and without value, they were compelled
to sacrifice those which were worth
something. This sent our securities
back from Europe in an overwhelming
flood for sale in Wall street at any figure
they would bring, broke the market
there, created the most widespread dis
tress and alarm, and added to the drain
of gold already under way because of
the effect of the MCKINLEY bill, which
was already being experienced.
The English nation has not yet recov-
cred from the loss of this tremendous
sum of money. Four hundred million
dollars is large amount to have wiped
out of being in so short order, and timid-
lty and economy mark every monetary
movement there at present. The field
of our promoters of enterprises is closed
against them. Purchases are small, and
such things as we buy there have to be
paid for not in goods, but in funds. AT
the same time Portugal has been trying
to float new loan to meet her foolish
OUTLAWS in African colonization, and has
failed. Italy is in the street with new
bonds because the burden of her taxa
ton is too heavy already to enable her to
raise any more from this source, and yet
she finds no takers. Spain shows an in
creasing deficit and needs $40, 900, 900 for
the maintenance of her national arma-
ment. In general the Latin races of
both Europe and America are in bad
way, and the connection between them
and the English moneyed classes is so
intimate that, even against their will,
they are compelled to do something for
their help. 1t is choice between losing
what they have already invested or put
| ting in still more; and, reluctant as thew
are to follow the latter course, they will
surely be compelled to. This will prob
ably swallow up what-surplus the coun-
| try has available, shuts us out from the
market we have confidently banked on
for the negotiation of our legitimate
securities, makes it necessary for us to
relyon ourselves for our own funds, and
draws gold from the midst of us in a
| ceaselesS current.
Russia also has inaugurated new
system under the guidance of WISH
NEGRADsKI, her minister of finance,
He is possessed of a passion to raise the
value of the Russian ruble, and has been
seeking gold in all quarters for this pur-
pose. He is said now to have accumu-
lated enough to pay off in full the