The Providence news. (Providence [R.I.]) 1891-1906, 1896-10-09
GOLD CHEAP THERE.
IN LONDON you CAN BORROW IT FOR
ONE-HALF OF ONE PER CENT.

Tho Cheapest Money Where Credit Is Best,
and That Is Where Gold Is the Stand
ard-Cause of the Present Agitation For
More Currency.
The great reliance which our people
place upon borrowing explains also the
fierceness with which men in the poorer
sections, where actual money is scarce
and banking facilities scanty in conse-
quence, demand an augmentation Of the
volume Of the currency. Overlooking
the fact that, in order to borrow, the bor-
rover must have good credit, and to
have good credit must be known to be
willing and able to repay what is lent
him when it falls due, most of our fell
low citizens at the west and the south
are convinced that nothing more is
necessary to supply their pecuniary ne
cessities than to furnish lenders with
ample means to lend. If the govern
ment, they say, would only print or
coin few hundreds Of millions of dol
lars of additional currency they would
easily get some of it, whereas now they
get none. How they are going to per-
suade the recipients in the first instance
Of this new currency to part with 1T
they fail to consider.
The same fallacy underlies all the
speeches which Mr.. Bryan has lately
been making in favor. of the unlimited
coinage of silver. Money is scarce, he
says, because gold is the sole standard.
Add to it silver in quantities limited
only by the capacity of the mines, and
it will become plenty. Everybody who
wishes TO borrow will be able to bor-
row, because everybody who is able to
lend will be eager to lend. Why lenders
should be more eager to lend silver than
they have hitherto been to lend gold he
does not attempt to explain. In London,
the citadel Of the gold standard, loans
have been made for the past two years
at one-half per cent per annum on call,
three-fourths per cent for three months
and u per cent on long time. Even
now, in the face of gold exports to this
country, the Bank of England rate is
only per cent and that of other lend
ers less. Here in New York the rate for
call loans was, for months previous TO
the present furry, and 2 per cent and
on permanent investment between and
per cent. Yet, Notwithstanding these
low rates i'm London and New York,
the farmers of the west and the planters
of the south have been complaining that
they could not borrow even at 10 per
cent the money they desired. The reason
is that their credit is bad. They are no.
toriously slow payers and often not
payers at all. The owners of money pre-
fer keeping it idle to lending it where
they are likely never to get it again,
or, at best, only after much delay and
litigation. No enlargement of the cur
rency, not even the unlimited issue Of
government notes, will help them so
long as they spend every dollar they
earn and lay up nothing for their cred
itors.
The cure for this evil. as we'll as for
oil the other evils of our financial sys-
tenn, will como not from legislation,
but from the gradual accumulation Of
wealth in the hands of our citizens. A
century ago New England was as poor
aud as clamorous for an artificial in
crease Of currency as the extreme west
ern and southern states are now. Time,
industry and thrift have brought more
abundant riches TO that section, and
with it more abundant supply of cur
rency. New York, New Jersey and
Pennsylvania were also once afflicted
with wildcat banks and all the evils Of
deprecated banking circulation. They
have followed New England in out
growing that condition and are now as
strong financially as any part Of tho
commercial world. Ohio, Indiana and
Illinois have taken tho samo course Of
development as their neighbors in the
east; so that they, too, have rs much
currency as they need and Of as good n
quality as can be desired. Gradually the
remaining states, where so much com.
plant is now made Of the lack Of mon
ey, will emerge from their poverty and
cease to depend upon their weather.
sisters. By n similar process the evil of
excessive credits now so prevalent will
be corrected by tho gradual accumula-
tion Of real capital among men engaged
in business and by their corresponding
emancipation from dependence upon
bank loans and time purchases. That
the country has made great progress
during the past few years toward this
condition Is proved by the steady de-
cline in the rates Of interest for money
at its flnancial centcrs Tho more cap
ital there is the less is the interest paid