The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1892-03-07
A PROMISING SPECULATION.

George Augustus Hoig has communicated
to New York paper plan by which Great
Britain may be compelled TO adopt bmetal-
lism. The basis of Mir. Hoig's plan is this
1. The large banks in the United Kingdom
exclusive of the Bank OF England hold deposits
of more Than 100000, 900 sterling, Of which
about $500. 100000 are money lent 10 them at
interest at seven days notice. the rate of inter
est being or ia or 112 per cent below the
official rate Of discount OF The Bank of England,
and the most OF This money is simply waiting for
better Investment and Is usually lent 10 them
at a r.lie of interest about the same as The own
ers could get If they bought British Exchequer
bills. II, therefore. forms fund from which
Mr.. Foster could draw large sums with his
United States Treasury gold bonds.
2. American gold bonds will sell freely in Lon
don II offered al rate of interest slightly higher
than EXchequer bills produce. and Mr.. Foster IN
very short time could accumulate In London
e30,0O0,o0o sterling by their sale. redepositing
the money With The great JOINT stock banks at
seven days notice AT a slightly lower tate OF
interest iDan he paid. so that his loss would only
be from e75,o00 10 e150,ooO per anuum. While
his operations would in no way derange the Lon
don money market. These deposits, OF course,
are all payable IN GOLD
When Mr.. Foster has e30, 600, 000 sterling
equivalent TO about $50. 600 American
money, in London banks, he will be in a
position TO demand Of the Bank of England
larger sum in gold than that institution
could well spare. Mr.. Hoig assumes that if
deposit receipts calling for this amount
OF gold should be presented the bank would
have to choose between the grandeSt fnan-
cial smashup in England the world has ever
seen and cooperation with the United
States to secure the opening of all European
mlnts, including those Of England, to the
free coinage of silver. Without discussing
the feasibility of this plan it certainly shows
upon what narrow basis the currency of
Great Britain rests. The large banks of the
United Kingdom hold deposits amounting
TO 5000, 600 sterling, and 1t is assumed
that demand for gold for the COMPARE
lively small amount of ESQ, 10000 sterling
would cause a grand smaShup. That is, If
one-twentieth of the currency were pre-
scented for redemption suspension Of specie
payments would follow, unless England
should offer an inducement to the holders of
these ESQ. 100000 of currency not to insist
upon asking gold for it. The financial
''cinch" might be brought about without
the aid of the United States Treasury.
syndicate controlling S150o00,o 900 of Ameri-
can gold bonds, or any other bonds that will
sell in London as freely, might obtain the
amount of English currency which Mr..
Hoig names as sufficient 10 cause suspen-
sion of specie payments. The temptation
TO form such a syndicate exists in the rise in
silver which would result from opening all
the minis of the world to the free coinage of
silver. The possible loss would be small
and the possible gain great Silver is now
at discount at gold prices of about 50 per
cent. If free coinage should be established
the world over the white metal would with
out doubt come up to its former legal ratio
TO gold.