The Indianapolis journal., 1895-02-02
ss.s7e,57o,9o5
,eriod:
s2,672, 4Sl,47O
AN ENGLISH AUTHORITY.
Comments of the Statist ON the Finan-
cial Situation in America.


cial Situation In America.
LONDON, Feb. 1.-The Statist will say
tomorrow: President Clevlands message
appears to be wise and statesmaniike. AS
the law stands it is quite clear that q
large sum should not be borrowed in Eu-
rope, as there is doubt respecting the
Presidents ability to contract to pay gold.
This would be fatal to any projected loan.
Money can always be had at a price; but
Sthe government Of the United States can
not act as if it was bankrupt. It's credit
would stand as high as that of any country
in the world If Congress would only do its
duty. II the present Congress does not act
it is greatly feared that it will be too
hate to apply to the new Congress, as before
1t can be called together crisis will prob
ably have occurred. 1t is questionable
whether, under the existing conditions, the
President can even borrow at home The
banks, In order to avert panic. may fur
nish him with gold but even then it is
questionable whether. when doubt exists
respecting payment in gold, enough gold
be got. In any case. mere borrowing
will not avail, as the experience of the
past year has shown that, sooner or later,
there must be contraction of the cur
rency or there will be a panic"
The Statist proceeds to discuss the con-
ing demonetized; secondly, no legislation
whatever be.ng arrived at; thirdly, the ef-
feet of the free coinage of silver. Then
the Stctist remarks: IF gold is defnonetized
1t is perfectly clear that there will be a
great transfer of property from the capital
ist and lending classes to the producing
and borrowing classes This would be of
immense advantage to the West and South,
and would prove a serious loss to the East
ern States and to Europe. OF course,
great country like the United States adopt
ing silver standard would have great in
fuence on the whole Of the world and sill
yer would undoubtedly rise; but it would
be long before it reached go pence. The
great reduction of debts all over the United
States by a fall to silver would give the
farming and producing classes generally
they have not had for many years and
would probably give great stimulus to
awhile, .ii american ri r' wheat cotton. m pork, ETC.
would compete with the produce cf other
countries at a very great advantage and
there would be. probably very rapid and
great growth of exports and. at the begin
ming. an era of great prosperity. On the
other hand. the lending ana creditor classes
would suffer and their 'sses would not
affect production TO anyth.ng like the same
extent as the gains of the debtors and pro-
a very serious fall in securities which
would injure capitalists and lenders both
Congress refuses legislation then gold would
90 to a premium: but probably not high
The tendency would still be to benefit debt
ors and producers, and would injure capi-
talists and lenders, while production and
exports would be stimulated, though not
to a great extent Thirdly. il the mints
were opened for free coinage, which would
tend to make the gold premium higher still.
the premium would not be very high and
the reduction of the debt and the losses OF
capitalists would be small compared with
the demonetization of gold
,fv1sr fc <aff n -{,l
possibilities, the statist represents the West
and South as being perfectly right in the
view that a change of the present system
would benefit their sections of the Union.
The effect of the change they advocate
would be tendency to transfer property
the West and South. In fact. it would be a
form of repudiation and IL would lower the
credit of the United States AMI prevent the
free influx of European capital. In future.
probably. European capitalists will always
Insist on the gold clause-they will require
clear contract that they will be repaid in
gold. In the event of gold decentralization,
matters viii right themselves in the long
run; but the run may be very long, and an
property would not act uniformly. Debts
falling due soon after the change would be
+ due later when silver has risen would be
less reduced. and IL silver reached sod there
would be no reduction of debts whatever"
The Times in It's financial article this
morning says: ."The financial negotiations
with leading London houses for tse placing
of the proposed American loan are without
result az yet. Much depends on TIE price
the United States is ready to accept IL
the bonds are not specifically repayabie in
gold. probably 3la per cent. Will be asked
the additional half per cent representing
the consideration OF the risk that the gov
bonds with gold. This is contingency y" whieh len
the position OF the treasury and the attitude
Of a powerful section of the Senate make IT
that the government will pay In gold III ii
can. Those who wish we'll to America must