Los Angeles herald., 1891-02-25

OF, has fallen relative to gold about Az
per cent. There could be no stronger
proof presented OF the favorable recip-
rocal action upon the metals OF the
double standard. 1t is as conclusive as
the solution Of problem in Euclid.
Mr.. Barrows does not neglect to warn
the commercial nations OF the great
danger which they run in adhering to
the single gold standard, and cites the
fact that to avert the impending finan-
cial cataclysm consequent upon the
threatened failure OF the Barings, the
Bank of England, the custodian OF the
revenue OF all the banks of the united
kingdom, was compelled, with the aid
and endorsement OF the British govern
ment as surety, to borrow about 25 tons
of gold from the Bank OF France. Mr..
Barrows' comments upon this extraor-
dinary transaction are instructive. He
says:
This was the hard alternative OF per-
mitting one of the leading banking in
stitutions of the kingdom to "go into
liquidation )" and possibly OF dragging
the Bank of England itself and other
large financial institutions into the same
remorseless vortex. And all this, be-
cause the English people will insist, not
only on using a single metal where
withal to effect their vast exchanges,
but who'also insist that they will only use
the minimum amount of that one metal
the growing scarcity of which Tin pro.
portion to demand), is constantly star.
ing them, and all gold-using countries
in the face. One is impelled to ask
what would have happened if the policy
OF the Bank of France had been modelled
after the English plan, of gold-mono
metallism, pure and simple, with no sur.
plus which it could safely loan to any
foreign bank? Where else in all the
world could $15,000,0 900 in gold have
been found, in default OF which the Bar
ings, and possibly the entire banking
system OF the foremost commercial ma
ton of the world, must have collapsed
Suppose on the heels of the Barring
disaster second large appeal for aid
had been made to the Bank OF England
What then?
A writer in the Fortnightly Review
for December, 1890, in quoting the Econ
omists estimate that the total deposits
of the whole of the banks OF the United
Kingdom are about e600, 900, 900 (S3, ,000,
000,000), makes the astonishing state
ment Up. 952) that the Bank of Eng
lands reserve, upon which the liqui
dation of the whole OF these deposits
practically depends" only oranges from
IL to at the outside 3 per cent. of theil
amount" And, as the writer very truly
asserts: For the whole banking svs
tenn Of the country this reserve is there
fore trifing security"
If liquidation. which English tinan
cial writer's are not backward in preach.
ing to other people Oh occasion, should
happen to be forced upon English finan-
cial institutions by the course of events,
and by the scarcity OF gold, what would
be the outcome?
We submit that Mr.. Barrows makes
out not only strong but an unanswer-
able case in favor of bi-metallism, and
that the trend of his argument, his illus
trations and conclusions show that the
double standard is not only the safe rule
but that there is constant danger of a
financial revulsion, worldwide and ter
rible to contemplate, in depending upon
a single metal, and that the one that is
the scarcest and the more difficult to
procure in its crude state.