The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-01-25
EUROPE APPARENTLY IMPRESSED
WITH THE BETTERING CON-
OPTIONS.
NATIONS EXPORTS A SURPRISE.
Exceed Imports for 1895 by 1875
500, OOO-Treasury Surplus
Increasing.

weeks. There has been an increase in the
volume of transactions, and a further mod
e eit; advance In prices, with little dispo--
vadues now established. The buying of
bonds for investment has been a conspic-
uous feature; and there has been a still
IN stocks, extending generally throughout the
list While the business among room trad
ers has become more active, there has also
been notable access of outside BUYERS.
The gradual return towards ease in the
European money markets has induced more
active movement in securities across the
Atlantic, which alphabetically affects bust
ness In our own market favorably. In London
this change has developed a return of spec
ulat1on IN American stocks, and during the
week the purchases here for that market
nave been larger than for many months, in
dicating some restoration of confidence in
our investments. The remarkable financial
strength recently developed at this center
and SO strikingly expressed in our ability
TO lend to Europe through the holding back
OF export bills (now estimated at nearly $780,
Co., OOO) is naturally having a good effect
upon the status of our credit abroad. Our
large accumulation of loanable capital and
construed abroad as inevitably tending to-
wards more active movement on our stock
exchange and higher range Of prices; and,
with this in view, London shows a DISPOSE
ton to avail itself Of the chances Of q
higher. market. The influential public move
ment in favor Of reforms in our currency
u
respond to that sentiment, appear to have
encouraged, in England at least, a more
hopeful view as to the future Of our cur
rency arrangements. There is therefore some
reason Tor anticipating more active spec
ulation, If not also investment. in our Sc
curities at London than we have witnessed
for the last three or four years. This prob
ability is strengthened by the Bank Of Eng
lands reduction of it's rate of discount to 3D.
per cent and by the fact that about Il, 900
shares OF stock have been sent to London by
this weeks sailings.
These underlying foreign factors are of more
Importance than may appear at first sight
One of the greatest aggravations of the I'M
fortunate financial troubles Of the last four
years has arisen from the profound distrust
they have excited among the bankers and
capitaliStlc classes on the other side of the
Atlantic. After sending home their securities
and withdrawing less permanent forms of loan
to the combined extent of probably hundreds
of millions of dollars, they are now sur
prised, may almost say astounded, to
ind us in no real sense weakened, but COM
petent to lend them large amounts of capital
to defer payment of $50, 900, 900 in gold which
1t Is within our power to draw hither, and
to thus afford great relief to a very stringent
condition of the European money markets
thereby exhibiting q potency in international
finance which we have never heretofore pos
sesSed. These are facts which must tell for
something in the future foreign status of
American credit.
The recovery in the investment market
above noted appears to be attributable almost
entirely to the consciousness that at last we
have entered upon stage of great and sub
stantla1 Improvement in financial conditions,
The condition Of the railroads is contributing
little towards this recovery, for their earn
lngs are at present unsatisfactory, although
the storms may be held largely RESPONSIBLE
for that Neither has trade yet developed
any surprising recovery, although the symp-
toms are not wanting that IN the manufact-
ures and the distributing trades are in
the beginnings of a healthy revival
The Official statement of our foreign trade
for 1896 has taken Wall street by surprise
The merchandise movement shows an excess
OF exports over imports amounting to S375-
S00,OO0--a movement unparalleled in the his
tory OF our commerce. AS an offset against
this balance, the statist:cians figure that
we must reckon net imports of gold amount
ing to $4,000, 600; securities returned after
the election $40, 600 900, and $3.50 600 900 for
interest payments and travellers credits etc. :;
making total of s216 O0O, 900, which still
leaves a creditor balance of $3.50 OOO COO
Against this must be offset $50, 900 900 of ex-
port bills held in this city for future COL
lection and the remainder of $109 600 900 is
to be regarded as covered by our liquidating
various temperament loans and advances
in the course of the year of excitement and
distrust.
The currency question is receiving more
attention as practical issue. Among other
changes deserving attention, the national
bank act certainly requires amending to pro-
vide for the changed conditions since it's en-
actment: One important amendment should
be to admit Of the issue of notes I'D to the
par value Of the United States bonds given
es security therefor. This would increa Sc
the national currency about 20,00O 900, and
would induce the banks to take out at least
$50. GOO, coo additional notes, as well as en-
courage the creation of new banks IN To-
ealft1es where they would be serviceable in
popuiar1zing the system. The agitation against
the greenbacks is fll-advised in connection
with the feature proposed-to issue bonds in
their stead. That would be to convert a non
Understanding obligation of the government
Int hot r.
$40, 500, COO annually for an indefinite period
That, to say the least, is entirely unneces-
sary: for, when the government comes to
retire the notes, a large portion of its gold
reserve could be devoted to the foundations
and beyond that the treasury could lawfully
use its contributions to the debt sinking fund
to the extent of about $40, 900, 600 a year when
the revenue was restored to its former basis
Of surplus income. The process of retiring
the notes must be slow one, and the amount
of notes which could, from this source. be
gradually retired would therefore be quite
important and might amount to 5000 900 900
within, say. five years. This with the
treasury gold to be used in the redempttons.
might easily dispose of three-fourths of the
greenbacks without the issue of a dollar in
bonds. Out of the remaining sum to be dis
posed Of, it is estimated that 500 600 900 should
be deducted for notes lost and destroyed in
various ways It is thus seen that the
amount of bonds needed to retire the notes
could be made, at most, but nominal.
1ntsead of liquidating the greenbacks
through issuing bonds In the way that has
been proposed, the first step taken should be
for the government to do what Is possible
to improve the notes in public estimation.
This could be done by increasing the gov
eminent revenue so as to insure a surplus
instead of q deficit, as It IS this unfortunate
condition which las inspired the feeling with
many that "greenbacks must be got rid of
at any cost" If congress will provide ample
revenue for the government and pass an act
debarring the reissue of greenbacks. after thew
have once been presented at the treasury and
gold demanded therefor. excepting in ex-
change for gold, greenbacks would then be
regarded all over the world as being good
as gold The notes that the government
should first take up those issued under
the Sherman law. replacing them bv silver
coin as fast as the country can safely alb
sorb the silver. This should be limited to
about sos. 100000 per annum, and the Bland
way but little larger scale. If the
greenbacks are to be retired bv their con-
version into bonds, as proposed. what will
tho national banks have to hold as their
reserves. and for the redemption of their
notes? Tt is better not to be too preopitate
in dealing with the greenbacks, excepting in
some such way as I have above suggested.
After so many drastic object lessons as we
have had during the last four years the
tons. To suddenly substitute bonds for
greerhacks might cause as many panics dur
ing McI[inlev's administration as we have
had during Clevelaud's. What we need Is a
policy that will avoid issues of bonds and
gradually bring out sufficient increase In
the notes of national banks to COMPENSATE
for any Withdrawals Of greenbacks that may
be found possible and convenient.