The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1896-10-22

treasury were made for the purpose of
affecting the markets.
The fact that banks were able to fur
nish all the gold required for EXPORT IN
to the middle of the summer of 1892 and
did so, were because large amounts of
gold were being paid to them and by them
| into the treasury and paid out again in
the course of business and it had not vet
begun to be displaced by the silver issues
the amount of which had not up to that
time reached such a volume as to form
an important portion of the ordinary com
mercial transactions in the New York
| market
During the past few weeks and at pres
ent, and for the first time in this admins
tration, various factors are in combina-
ton. which have produced low rates of
| foreign exchange and consequent importa-
ton of gold. The principal ones are the
favorable trade balance, the reduction in
| the volume of currency outstanding and
the continued high rate for call loans at
New York this differentiation being part
~ result of preceding situation. The
low rates for foreign exchange caused
importations of gold from London and
other foreign cities, because at these points
exchange on New York is scanty and
| rules at high rates and dealers and draw
ers here and their associates across the
ocean find a profit in the discount of price
at which gold can be obtained abroad and
at what it can be used here In other
words, those foreign markets are in the
same condition that the United States
has been i'll at various times during the
past five years. 1t is true that gold has
| been imported on one or two occasions
lately when purchases of government
bonds were being made, but for this Il
premium was paid and it was purchased
and shipped like cotton or wheat, without
| regard to the rates of exchange ruling
here and was an abnormal proceeding.
! During the years succeeding the re
sumption of specie payments in 1879, and
until the currency question disturbed our
| monetary relations, there was regular
movement of gold to this country in the
late summer and autumn, while we were
marketing our agricultural products
abroad. A return flow from this coun-
try abroad began in the spring and CON
| tinued through the early summer to pay
our debts for imports and other pur-
poses. Low exchange rates in the for
mer and higher rates in the latter periods
has caused these movements. and the bal
ance of trade was usually i'll our favor,
as it is at present. The excess of mer-
chandise exports over imports for eight
months. up to the first day of Septem-
Der of this year. amounted to S95,99I,-
| 80, while the corresponding time last
year the excess of merchandise imports
over exports was S46,367 .26S. In other
words. instead of disbursing this latter
amount in foreign markets we this year
are receiving from them $95.90I .94J. II
balance in our favor of S142,3I5,2 33.
Moreover, the tide of securities flowing
| back to American holders since 1890
| largely subsidized, at least for the time
being, and there is not as much of Il
drain from here on that account. The
| high rate of interest paid in the New
York market for call loans during the
past few weeks has attracted foreign
| capital from ccntcrs where the interest
rates have been much lower. This pc
cuiarity was also marked during August
| 1893, at the height or the currency panic,
when the ruling rates of interest were
| abnormally high and large amounts of
money were loaned from abroad. and
the gold coin sent to this country. The
| contraction in the active currency is
caused by the large increase in the
balance of the United States treasury.
the boarding of gold and notes redeem
able in gold. which has been going on
among the people for some time in view
of the possible failure OF, the United
States to continue their redemption in
gold. The critic who talks so freely
about importing S10,000.O00 of gold for
effect from the other side of the ocean
does not seem to realize the Importance
of such Il transaction and that there
must be value exchanged for IT, either
i'll the shape of exports or securities. or
in some other way. 1t will he seen
from the published names of the par
ties who receive the gold imported that
they are mainly dealers in exchange or
with houses or institutions having for
eign connections with national banks.
1t must not he forgotten that the CON
fidcncc in the situation which has placed
the country in its present satisfactory
condition regarding its gold reserve was
largely due to the efforts of the bankers
of New York in the early summer. The
fact of their agreeing to furnish bills of
exchange ut rates under the gold ship
ping point and endcayOrng to bring about
artficially that which we know is local
result from natural causes. inspired so
much confidence that normal conditions
prevailed and the situation cured itself.
According to the published reports dur
Ing April. May. June. July and the first
week in August while gold was being
exported. the rates of sterling sight eX-
change ut New York have ruled from
S4.S3 ID to S4.SJ II and during the
last of August and up to the present
time, while the imports were being made.
they have ranged from S4.Si 81 to
S4.SJ 81.
If the parties attacking these transnc-
tons would examine their daily reports
and see who withdrew or imported the
gold and what the exchange market was
and why the exchange rates were high
or low. it would do away with much mis-
apprehension on these subjects.