Birmingham state herald., 1895-10-26
THE SUPPLY OF GOLD.

All facts are of interest to business men which bear upon the possible supply of primary money. It has for a year back been frequently stated by the ad- herents of single gold standard that the supply of gold is increasing so great ly that there will soon be no necessity for bimetallic standard, as regards the necessary quantity of money. These statements do not appear to be based upon substantial facts. The London Economist has long article on the out look for the London money market It notes the large reserves at the Bank of England and other institutions. which are expected to hold the rate for loans down, and then proceeds to enumerate the factors that may operate to advance rates The uncertainty as to the ulti- mate disposition of the funds to the credit of Japan in London is noted. and then the paper says:
 "The tide of bullion which has been so steadily flowing into the bank has been arrested, and may possibly turn in the opposite direction. People are apt to as sociate the past accumulation of gold at the bank with the growth in the produc- tion of the metal As a matter of fact, however, South Africa has latterly been adding comparatively little to our stock of gold. To this the board of trade re- turns bear evidence. They show that while during the past nine months we imported from South Africa gold to the amount of 61S5,000 pounds, we sent thther during the same period gold coin to the value of 4,170.000 pounds. Western Australia, too, while shipping gold bull lion, has been importing sovereigns. Thus, the producing countries are them selves finding employment for much of the gold they mine, and are likely to con- tinue doing so possibly to an even greater extent than at present, for in South Africa and Western Australia alike the gold mining industry is only in process of development, and a great deal of money will have to be spent in order to render it fully productive. It is from the United States, and not from the new sources of production that we have lat - terly been getting most of the gold that has been filling to overflow the vaults of the bank And from that quarter ship ments are likely to cease now that there is a sufficient supply of produce bills to keep the New York exchange below the specie point, while possibly we may be called upon to send back a portion of what we have already received.
 Another point to be considered is that the speculation in gold mines has thus far made comparatively small demands upon the available supplies of capital. Millions have been changing hands con tinlously, but transfers of that kind do not affect the aggregate and the amount actually absorbed in working capital has been relatively very small Not only so, the allurements of the gold mines have been so all-engrossing as to divert attention from other enterprises, and pro- moters and others have felt that there was little use in attempting to float sound and promising undertakings so long as peoples eyes were dazZled by the golden glamour. Now. however that the mining mania seems likely to receive a salutary check, money may be expected to flow more freely into other enterprises, and al- ready number of foreign loans are pro- jected. Chili wants some f6500000. Bra- gil would like pretty nearly as much. Spain is borrowing to pay the Cuban war expenses, and even decrepit Turkey is meditating further borrowing under the guise of a conversion. Thus the capital applications promise not only to be on larger scale but also of a kind involving a greater demand upon the resources of the market than the mining floations have yet done, while, of course, money will still have to be found for the devel- opment of the mines that are as yet in the initial stage of working. And last, but certainly not least. the rise in the prices of commodities. which has been in progress for the past three months, com bined with the expansion of trade, can- not fail to swell the demand for money. Long views of the money market are extremely apt to be fallacious, and pres cnt circumstances are so exceptional that no one would care to hazard any very confident opinion as to the future. For the reasons given, however. it appears l to US that the indications that would seem to point to a further prolonged period of ease are in measure deceptive, and that altered conditions are not un- likely to prevail before very long"
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