The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1894-12-19
. VICTIM OF MoNOMETALIIsM.


A VICTIM OF MONOMETALLIsM
Another of Great Britain's gold-standard
colonies is floundering in bankruptcy. and
without much hope of extricaticn. New
foundland is the one British-American
colony which did not unite in the Canadian
federation. It maintains a separate gov
eminent. but its currency system is on
substantially the same basis. 1t has two
chartered banks" the Commercial and
the Union. The Commercial bank had at
the end Of 1898 capital of $500. 900, a re-
serve of 100000 and circulating notes
amounting to $65O,OOO. 1t declared a divi-
dend OF II per cent. for the year. The
Union bank has had more prosperous
career than the Commercial. 1t was estab-
lished in 1854, and for eighteen years paid
dividends of 111a per cent. In 1872 its re-
serve had become so large that it issued
special bonus of so per cent. to its share
holders in paid-up stock, and since then
1t has paid 20 per cent year in dividends
and bonus on all stock. Last year the
dividend was only Is per cent. Al the
close Of 1898 its capital was $456,OOO, re-
serve $500. 900 and note circulation $606, 152.
Unquestionably the system was very
profitable to the banks.
In addition TO these banks the govern
ment maintained a savings bank, in which
over 100000 was deposited in small sums.
The depositors were allowed 4 per cent.
interest and the funds were loaned chiefly
to the Union and Commercial banks. The
chief circulation Of the colony is the notes
of these banks, which are a lien on the
assets. The shareholders are also liable to
the amount of their stock. There was not
over $500, 900 of specie in the country, of
which the Union held 100000 and the
Commercial 100000 They have paid most
Of this to the savings bank, from which it
is now being drawn as rapidly as possible
Aside from the bank notes and specie
there is little money in the country, and it
is United States money and Bank of En-
gland notes. The assets of the Union
bank are said to be ample, if there was
any way OF realizing on them, but this Is
very doubtful. 1t is generally conceded
that the Commercial bank will not pay
10 cents on the dollar. The liabilities Of
the two banks are estimated at $3,OOO,0O0.
As nearly as can be judged from present
reports the present panic began with de-
mand of the government for part payment
and better security for the loans of the
savings bank. There was some difficulty
in securing this. Rumors of a shaky con-
di;ion of the Commercial bank led to
run on it and its speedy suspension. It's
notes at once ceased to be accepted. \
run then began on the Union. It suspended
with a promise to open the following day,
but did not do SO, and probably never will.
Its notes became worthless for money use
or more than three-fourths of the circula-
ton Of the colony, is wiped out. Nothing
now remains but gold and little silver.
The immediate results are appalling. One
telegram says:
Work of every kind has ceased. Hun
shutters are up on two of every three
stores. The seal fishery usually starts up
in March and employs twenty-five steam
ers and 5000 men for two months, yield
about 81, 900 annually. There will be
no seal fishery next March because the
owners of the steamers are bankrupt.
There can be no cod fishing next summer
for the reason that the firms which sup
ply provisions and fishery outfits cannot
do so any longer This means much where
-,r.s4,
rectly interested in the fisheries. Already
famine stares the poor in the face. At the
Episcopalian orphanage the children had
food for only one meal today. All the
money of the orphanage was in the Com
mercial bank. Nearly every religious de-
nomination is crippled from the same
cause
Another telegram is even more alarming:
The attitude Of the populace is now
occasioning anxiety. Threats of revenge
and bread riots are frequent, and GER
tain newspapers are adding fuel to the fire
by clamoring for the Imprisonment Of the
bank directors, throwing the whole re-
sponsibili,y for the crisis on them. One
cannot argue with hungry men, as hun
dreds will be in a day or two, and they
will help themselves if compelled by hun
ger The governor has asked that a war
ship be sent here from Bermuda.
Il seems hardly possible that this new
disaster, following so closely those of
Australia, can fail to make some impress
sion on the minds of English theorists of
the dangers Of gold monometallism, even
when united with the much vaunted Cana
dian banking system. 1t certainly ought
to be a very solemn warning to the entire
world. but it is TO be presumed that there
will be those who will continue prating
about honest money and the impossf-
bility Of two standards
UNIFORMITY OF LAWS.
Representative Mccall of Massachusetts
has introduced a bill in congress which, if