The gold leaf. [volume] (Henderson, N.C.) 1881-1911, 1895-12-05
ABOUT SOUND MONEY.
A DISTINGUISHED FOREIGNER ON OUR
FINANCIAL TROUBLES.

A DISTINGUISHED FOREIGNER ON OUl
FINANCIAL TROUBLES.
The Forum Leading Article For De
cember-M. Paul Leroy.Beaulieu
the Eminent French Economist
Writes Concerning the Financia
Problems of the United States.
IThe Forum
The leading article in The F6yu1
for December is probably the clear
est analysis of the present financial 81,
uation in the United States that ha
yet appeared. The article is contrib
uted by NJ. Paul Leroy -Beaulieu, th'
distinguished French economist, VIII
lays down, from the point Of view of :
sympathetic European observer, tn
"Conditions for American CONNER
cial and Financial Supremacy" HI
says that there is much surpris
throughout Europe that great natior
like the United States should allow it
development to be trammelled by fre
quent and severe crises, and that i
! should be either unable to discern thei
causes or lack decision to remove then
faom its path. He thinks that th'
failure of the American government t
redeem its paper currency after th'
War was great and vital error; whos'
evil influences are still felt. In hi
opinion, the United States government
should cease to issue paper money, re
mitting this task to the banks. NJ
Bieuleau points out that the geographi
cal position of the United States i
such that it can aspire to take fron
England, in the course Of the mex
century, its commercial and fnancia
supremacy, but that in order to dc
this the dollar must be given the quail
ties of the pound sterling. In othel
words there must be no sort Of doub
that it is a ,goM dollar. After warn
ing Americans not to be duped by
the ambiguous expressions as to bimet
allism, INDUCED in by European
statesmen ior political effect, he call:
attention to the enormously increasing
output of hold, and says that, in view
of this fact, the btmetallism movement
is bound to collapse.
WHY THE UNITED STATES IS UNABLE TC
STOP GOLD EXPORTS.
An advance in the money rate in
order to arrest the outgo OF specie,
particularly gold, is sure to succeed il
the government does not disturb the
natural course of operations by arti.
fetal measures. Such an advance
checks the imports of merchandise,
and, on the other hand stimulates ex-
ports. 1t draws capital from abroad
to seek the better returns which are
the consequences of this advance. 1t
induces certain number Of the hold
ers of public and other securities to
part with them, and influences foreign
capitalists to purchase them. Thus
whenever the banks, public or private,
are charged with the protection of the
metallic reserve Of the country, they
accomplish it with certainty by this
sovereign method Of raising the money
rate. In a normal condition of inter
national financial relations, this ad
vance may be moderate, and the
country experiences only slight
detriment, a light and momentary EN- :
barrassment, not to be compared to
the shock and discredit resulting from
an outgo of gold the end of which
cannot be calculated. On the con-
trary, when the State issues the fduc-
iary currency, as in the United States,
it has no real means Of protecting the
metallic reserve. 1t cannot raise the
discount rate. for it does not discount
commercial paper. 1t is under obliga-
ton 10 pay gold to all who demand it,
without any power to regulate or re-
duce the demand. 1t is absolutely
disarmed. Its sole resource is to Sc
cure specie by loans abroad. But as
these loans have no effect on the gen
eral current of business, their proceeds
are soon exhausted, and they must be
renewed. This lncapacity to protect
its reserve is the chief reason why a
State is not fitted to issue hduciary
money.
CONDITIONS FOR AMERICAN COMMERCIAL
AND FINANCIAL SUPREMACY.
So soon as the capitalists, small and
great, of Europe, shall know that the
United States have definitely adopted
the gold standard and relegated silver
to subordinate monetary role, the
savings of Western Europe will flow
toward that country. Freed from the
fear that he may some day be repaid
in deprecated money, every person
with savings in all Europe will be happy
to find a return Of "a 10 4 per cent.
in good American securities, and OF 5
10 SO per cent. in the shares of we'll
established American enterprises. Then
the immense territory Of the United
States will find its vast resources rap.
idly and completely put in the way o.
exploitation. The abandonment o
notes or paper money issued by the
State: the definite adoption of gold as
the sole standard,-these are the two
necessary conditions on which the
United States can secure a financial
position as important as that they now
hold in agriculture and in industry
On these two conditions they ca
some day approach and equal Great
Britain as a financial power. If, or
the contrary they persist in their sys
tenn of government paper money ano
in the REHABILITATION" Of silver, thei
industrial and commercial develop
ment alike will he trammelled, anC
they will undergo marked and per