The herald., 1893-08-12
A WARNING AND A LESSON.


WARNING AND A LESSON.
In these times when very wild ideas
prevail about the capacity OF the gold
stock Of the world to meet the exigencies
OF trade. it is well to take account Of
that stock and see how much of 1t is
available. The American Bi-Metallic
League makes the following estimates of
the existing stocks Of gold in the world:
Russia, $500, O,0O0, 900; France. $780,
600, 900; Germany, $2l5,000.000: Eng
land. 1920, ,000, 900; Austro- Hungary.
$3.50, 900 900; Spain, Netherlands, Italy
and Turkey, $125 000, 900; United States
treasury, $202, 900, 900; banks in the
| United States, sl9S, ,000, 900. This forms
total of 81 $3.50, ,000, 900. Assuming the
entire stock of gold to be $500, ,0C0, 900,
there remains 81 $50 .000,000 to be ac-
counted for. The amount of 81 ,250, ,000,-
600 ia traced to Asia, and it 10 supposed
1000 in general circulation and con-
ernments or banks.
The highest estimate We have seen OF
the silver stock of the world is $780,
000,0 900, go that the difference between
the total amount of each metal is not
great enough to form any friction that
would lead to non-parity. But we are
confronted with this great difficulty
when we come to consider the question
Of making gold the single money stan
dard. The great bulk of the available
gold is under control Of the govern
ments. go that if the business Of all the
nations must be dependent upon that
metal alone, it is in the power of any
government to produce financial panic
at any time. But it is curious in this
connection, and fact Of striking i'm
portance in any consideration Of the
question, that while any government
can produce financial panic under the
circumstances, no government has the
power to allxy it or to restore the con-
fidence thus violently disturbed. 1t
can undoubtedly, by wise cooperation
with financial institutions and repre-
sentstives of business, avert panic;
indeed, it can by drastic measures post.
pone the day OF reckoning in normal
times for an indefinite period in single
country; but whenever financial crisis
reaches out everywhere and becomes
universal, the day Of reckoning will be
apt to put in its appearance.
Great Britain is the head and front of
the mono-metsllic nations; yet it pos
sesses but 1920, ,OOO, 900 of the gold of the
world upon which it can draw. When
the Barring failure was causing the ut
most alarm in English business circles,
that country stood on the very edge OF
an abyss, and had not the Bank OF
France come to its assistance by loan
of SIS, ,000, 900 in gold. there would have
been a collapse in Great Britain that
would have psralyzsd the country. On
90 small hook does the destiny of a
great commercial nation hang when it
places it's fate upon single standard.
Chancellor Groschen declared at the
time that il tho he nka of q rnat p-;.-;-
were called upon at once to liquidate
their obligations in the yellow metal,
they could barely pay two cents on the
dollar, er ten cents on the pound sterl-
ing.
Now it is said that England is the
creditor nation to other nations to the
extent of $4,000. 100000. That rep
resents exactly what Mr.. Gresham eati-
mated the obligations of the banking
institutions OF Great Britain to their
home creditors to be-. Surely the inan'
cial affairs OF such nation are not in
30 hourishing and sale a condition thai
che can afford to disparage the value o.
one halt of the metallic wealth OF the
world. She stands on very totterins
stool herself, even if it is golden one
Let her continue the policy of forcing
the silver countries to the wall. Wha'
ia the inevitable result that must follow
Inability to psy--repudiation Wher
reputation comes on large scale. how
is she going to satisfy her home cred
itore, who will want their money, with
orlv two cents on the dollar to NEE
their demands? If she forces repudia
ton on other countries. reputation
like chickens. will come home to roost
The United States have an example il
England not to follow, and warning il
her that teaches lesson from which
. they should derive precious gems O
wisdom. Silver may be, for the nonce
under cloud; but the day will com
when it will prove bridge of securit
for the country to pass over from tn
: dark haunts of great crisis into tn
pleasant places of financial safety.