The representative. [volume] (St. Paul, Minn.) 1893-1901, 1893-05-17
THE OUTFLOW OF GOLD.

menus
Mr.. L. P. Dewey writes: ssBy what
authority do foreign nations have a
right to draw on the United States for
gold, or exchange, or commodities?
This question we do not fairly under
stand. Will you be so kind as to an
swer through the Advocate what de-
mands foreign nations have on this
government? This is an important
question, as good many don't under
stand it."
The demands are various. There are
many kinds of American securities held
abroad. Among these may be men
toned part of the outstanding gov
eminent bonds, the bonds and stocks
of railroad corporations, state and
municipal bonds, and the bonds
and stocks of American manufact-
cries. A short time ago we copied
from the Brewers Journal statement
of nearly 500, O00,OOO Of the stock of
American breweries held in England.
In addition to these, foreign landlords
have secured title to millions of acres
of American lands, and there is scarcely
an opportunity of investment on this
side of the water of which foreign cap
italists have not availed themselves.
This investment of foreign capital has
been, and still is, encouraged by the
patriots who have controlled our public
affairs, until Great Britain has nearly
accomplished the conquest of America
by means of her money, which she could
not accomplish by her arms.
81 -
ton are payable, principal and inter
est, in gold. The dividends on the
stock of corporations held abroad are
paid in gold Rents collected of the
tenants of British landlords are paid
in gold. The balance of trade for the
past year has been against us, and this
balance is settled in gold. There is
evidently conspiracy of British
and American capitalists and brokers
at this time to force collections upon
every available security in order to
seemingly justify another issue of
bonds for the purchase of gold with
which to meet these demands. The
condition, when fairly understood,
exhibits the legitimate results of the
brilliant financial policy of statesmen
of the John Sherman variety during
the past thirty years of our national
existence. Common sense would seem
to indicate the propriety of using the
gold now in the country for the pay
ment of these gold obligations, and the
adoption from this on of an American
system of finance in place of the British
system which has so long prevailed.
Let Americans own America and con-
duct their own affairs upon plain, COM
mon-sense principles in their own in
terest, and we need never fear finan-
cial crisis, or experience stringency
in the money market. Topeka (Kan.)
Advocate.
From an unexpected source comes a
confirmation of the Advocates theory
The American Banker, in a recent issue,
offers the same explanation of the late
steady outflow of gold from the United
States Says the Banker:
The barest hint at the causes which effect the
interchange of commodities and specie between
nations Is sufficient to reveal the great COM
complexity of the hidden. almost unanalyzable,
movements of which it is composed The fact
of this difficulty, which arises chiefly because
of the absence of exact Information concerning
creditors invites many foolish assumptions So
long as this data is not available we shall see
the prophets arise on every hand to intimidate
US in our enterprise. OF late this genius of
phophesy has exercised itself very largely upon
the diroful purposes OF "Greshams law" This
law is In brief, that an inferior currency drives
the superior medium of exchange from the ave-
MUGS OF trade. If a cheap tool serves just as
vol as one that is dear, the latter will not be
used and there is nothing occult about it. Our
exports OF gold are held to be present exam
pie OF the operation Of this law. For, do not
our exports exceed our imports, and yet do we
not send out gold? Therefore our currency has
become inferior and good money is leaving US.
Such reasoning overloOks one important con-
sideration, and is stupidity fallacious besides.
It is well known that aside from the debts Gre
ated by the international movementsof trade
we are indebted to European countries, espe-
cially to England, upon stocks and bonds, for
interest and dividends. The volume of these
payments is admittedly large, though it's pro-
portions are not known precisely. To ignore
these payments in considering the course of in
ternational exchange is great error.
Some idea as to the volume of these
payments may be gathered from the
following hint dropped by Hon. w. E.
Gladstone, in the course of a speech in
the house of commons, during the re-
cent debate upon the inevitable silver
question. He said: 81 am almost
afraid to estimate the total amount of
the property which the United King
dom holds beyond the limits of the
United Kingdom, but of this am well
convinced that is not to be counted by
tens of hundreds of millions. One
thousand millions probably would be
an extremely low and inadequate esti-
mate. Two thousand millions, or some
thing even more than that, is very
likely to be nearer the mark
Here is an acknowledgment of more
than ten billions of dollars of foreign
investments. Continuing, he said:
''This splepdid spirit of philanthropy,
which we cannot too highly praise-be-
cause have no doubt all this is fore
seen-would result in our making a
present of $1,000, 900 or e1OO, 900, 900 to
the world. 1t would be thankfully &C
copied, but think that the gratitude
for your benevolence would be mixed
with very grave misgivings as to your
wisdom"
Now multiply $3.50, 100000 and $780,
600, 900 by three and you have the mini
mum and maximum estimate of the de-
creased quantity of products, or COM
modities, it would take to pay the in
faraSt due tO Enpland from other ma