New-York tribune., 1896-02-04
AMERICAN CREDIT ABROAD.
HOW PRESIDENT CLEVELAND HAS I'M
PAIRED 1T AND INCIDENTALLY
HELPED THE FREE
TRADE CAUSE.

PAIRED 1T AND INCIDENTALLY
HELPED THE FREE
TRADE CAUSE.
London, January %
The mobilization Of the flying squadron has
been demonstrat ton of English naval resources
against Germany. The slump OF American secu-
rifles in the London stock market after Presi-
dent Cleveand's Venezuela message was sim!-
lar act Of defensive policy, not brought about by
Government direction like the commissioning OF
the fleet, but recognized at once In England
as a warning to the United States The decline
in American stocks Of all kinds has been followed
by hostile attitude among investors and inan-
ciers toward the new issue Of per cent bonds.
Bankers have been emphatic In declaring that no
new class OF American securities is now market.
able in London. This temporary collapse OF the
borrowing powers of the United States in the
financial centre Of the world Is regarded by
Engishmen as a safeguard against war. They
assume that a country with disordered cur
rency, an increasing National debt, a declining
gold surplus, inadequate revenues ana impaired
credit in Europe cannot afford to plunge INTO
war in defence of its principles.
The causes assigned by fnanciers for this hos
tlty to American securities are irritation pro-
duced by President Clevelands message, appre-
hension Of future complications over the Venez-
uea affair distrust of the maintenance OF gold
payments by the Treasury in Washington, and
uneasiness over the silver agitation, the politi-
cal deadlock and the obligation incurred by coin
rather than gold contracts. With these various
causes this letter Is not concerned, but rather
with the general fact that American credit has
been seriously compromised in England That 10
a recent experience. Indeed. 1t may be said 70
date from the overthrow Of the Republican Ad.
ministration in March, lS93 when the Democratic
party for the first time in a generation assumed
entire responsibility for public affairs and un-
dcrtook the reorganization Of the revenue sys-
TEN, making close an approach as they could
to English methods by taxing incomes and low.
ering the tariff schedules.
TRIUMPH OF AMERICAN FINANCE.
American credit was good enough in London
during the long period when the Resumption re-
serves were not depleted, and there was large
surplus available every year for debt-paying on
an unexampled scale. From August, 1860, 10
July 1892 the reduction OF the National debt OF
the United States was S,sli.9oj,lo7, or SssOolo6Sl
In excess OF the requirements of the sinking fund
These marvels accomplished In America
when the fnancers Of European countries were
racking their brains to discover new sources OK
revenue II was during that period that the late
OF the European States was s20,ooo0 00O and
forecast that only a small fraction Of 1t would
ever be paid The United States then had the
high distinction Of being the only great Nation
that was paying it's debts with extraordinary
rapidity when the Indebtedness OF Europe was
expanding every year in volume.
1t was this rem arkable record for debt-pay.
Ing on stupendous scale which not only es-
tablished American credit abroad but also
prevented the extension of English free trade
When the German Empire was founded, Prince
Bismarck introduced the English system. out
abandoned 1t for protection. because, as he nln-
self said. he impressed with the material
development of the United States. and with the
facility with which a great mass Of indebted
ness was paid off and employment provided
for millions OF new citizens. 1t was the pros
perity OF the United States under the protective
system that confined free trade practice 70
England and created high tariff against her.
setting he own colonies against her economic
policy. Lord Salisbury understood this clearly
when. In his famous Hastings speech. which ne
has been trying recently to explain away, he
declared that free trade might be beautitul
theory. but It not business.
It was not until President Cleveland and his
party after eighteen months Of vacillation and
and reversed the distinctively American policy
of economic independence under which the Ma
ton had made unparalleled gains In wealth ana
nrosperity that there was any uncertainty
about American credit abroad. Now everything
IS changed All classes Of American securities
are depressed and here is general feeling OK
apprehension respecting the sovency OF the
Government and its ability TO meet current
obligations with good faith London nnanciers
assert that an application for a new loan from
the United States Government under the sans
conditions Of coin payments under which oono
purchases have readily been negotiated here'o-
fore could not be considered By them. Ihey
talk about the uncertainties OF the currency
question. the unfavorable balance OF trade. the
inadequacy OF the National revenues and me
instability and recklessness Of American hnance'
II IS impossible many OF them say. TO float any
new issue of American securities In England
WRECKED BY ENGLISH METHODS.
So far as American credit abroad is concerned
the experiment OF introducing in the United
states a lower tariff based on English IDEAS
has been a disastrous failure. The National
debt instead OF being scaled down. as II was
at an amazing rate from 1867 to lS93 has been
largely increased under the present Cleveland
| Administration surplus which was once the
| envy of every Finance Minister In Europe has
been converted into deficiency. Borrowing
powers which were once unrivalled have been
| paralyzed at least in England. No longer are
the achievements of American finance and the
realities Of National prosperity the marvel ot
Europe There is widespread distrust or the
stability OF American financial adminls'ra"om
| and Of the tendencies of National politics All
| this has been done during the short perieo
| wbsn President Cleveland and his party have
been In power.
| The English economist never pauses to consider
| that these unfortunate results have accompanied
a deliberate attempt to introduce his own tarin
| "A