The Portland daily press., 1895-04-06
IMPERILS WORLDS MONEY MAR.
KET.
How is China to Meet the Demands of
Victorious Japans

FIO1OttVuo Japan.
She Cannot Pay &25OO0O, 900 in Coin.
Because She Hasn't the Coin and Be-
cause, If She Had, the Transaction
Would Upset the Money Market the
World Overflow the French Paid
Their Indemnity After sedan-The
| Transfer of Credits.
The whole world will be affected if the
Government of Japan, in the conclusion of
peace negotiations with China decides 10
enact an indemnity in cash. The amount
of the indemnity has been generally stated
at $3.50. eco, eco. and the withdrawal of this
amount in gold or silver from existing
stocks Of those metals would affect sbe
monetary system of nearly all the great
civilized powers in some degree, and might
even result in changes in the price of com
inodities. The Chinese Empire posse sse S
little gold and silver. and the actual cur
rency. according to a late report by young
Mr.. DENLY, who was Charge d'Afaires in
the absence of his father. tie Minister, is
| copper cash. Silver coir.s have only been
minted since May. 1885, and have NOT yet
gotten sufficiently into circulation to be
/ regarded as even part Of the currency of
China. Gold is a commodity of which the
price varies with the London market. This
| being the case the Chinese Government
would he obliged TO obtain gold ard silver
| TO pay a war indemnify by means of foreign
| loans. and the metal would have to be
drawn largely from the reserves OF the
great banks of Eurore. from the Treasury
of the United States, or, if silver were ac
| cepted, from British India. Japan has no
desire to see China resort to the European
powers for assistance. for it would have the
effect of giving them an influence in the
| Eastwhich Japan hopes to possess for her,
self without foreign interference. The
Chinese Government has already consid-
cred the mortgage of their topper mines to
| Germany and several similar transactions
which would increase European influence
in China, and Japan will endeayor to avoid
driving China to such resources.
! The discussion of what might happen if
actual payment of large indemnity was
required in coin or bullion is, therefore.
largely matter of theory, for those famil-
lar with Jananese finances do not believe
| that payment in actual metal would be re
Quired. Payments in coin or bullion play
only a subordinate part in moSern trans
| fers of capital, and the Japanese Govern
ment would undoubtedly be satisfied with
the transfer of bills of exchange represent
| ing the amount of the indemnity, even if it
were nominaily stated in cash. The actual
pa ayment in cash would proba bly, be as in
| furious to Japan as to any other nation, for
| it would double or treble her monetary cir
| clation, and in the absenoe of the general
| use of checks. commercial bills. and other
| instruments of credit would change the re-
lation of the monetary circulatio to COM
modities. upset prices and money values,
| and invite speculation. If Japan decides
to demand an indemnity, the payment to
| be completed within few years, she will
| undoubtedelY be satisfied with the manner
OF payment adopted by France in the settle
mont Of her great indemnity of i've billion
| francs ISL GOO. 900, 9t0) to Germany afte r
| the Franco-Frussian war. This was the
greatest transfer of capital ever made and
seriously affected the commercial relations
and money market in both countries, but
the amount of coin and bullion, both gold
and silver, which was transferred was only
about 500.000.000 fraLcs (Sl90000, ,00U. The
loss of coin and bullion. therefore. was less
than the loss of the United states for the
| fiscal year 1898. when the excess of exports
of gold over imports of silver was Ss7 ,506,-
As and the exess of exports of silver was
| ST., ,544, 06T. The transfer of coin and bullion
was bagatelle in comparison with the
| transfer of Frech cal pital b. other means.
TRANSFER OF CREDITS.
| The transfer of capital as now effected by
bankers and dealers in foreign exchange
| is made largely fy the transfer of credits.
| This is the manner in which the Rothse bids
are now protecting the gold reserve of the
United States Treasury-by offering bills of
| exchange in the New York market, drawn
against their own resources in Europe.
| when the demand for the transfer of credit
| from this country to Europe threatens the
| withdrawal of gold from the Treasury. One
OF the earliest opera tions of this sort on a
large scale was in 1874, when the English
| Government agreed to lend the Empero OF
of Germany 24.0C0.000 $200G0.0 COO, which
represented many times what that sum
would represent to Great Britain or the
| UnitedssStates today in proportion to their
population, wealth, or supply of gold coin
and bullion. Mr.. Boyd, WHO conducted the
operation. said:
The remittance of so f.use a sum as g.
000000 is considered a matter of infinite
difficulty and de1iGacy, so as to prevent its
| producing any remarkable effects upon the
course CT exchange. 1t WAS necessary to
| vary the modes of remitting and to make
use of various means for that purpose pre-
sented by all the different exchanges of
| Europe. 1t was net nee essary to remit bills
upon Hamburg only. because it frequently
happened that it answer ed better to remit
to Hamburg upon otEer places, such as
| Madrid, Cadiz. Lisbon, Genoa. etc.. than 10
remit direct upon Hamburg: and having
constantly orders fl ON Vienna with regard
to the rates of the different remittances
to be made our attention YVES directed to
| the accomplishing MT of these orders on the
best possible terms. In fine, il WAS necessary
to taxa bullion, bills direc upon Hamburg,
and bills upon other places all into our
means of remittance and te make tine most
| of ithaca p,odec of remittance without Civ