The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-09-27
THE rworoLD USE OF CURRENCY.

IL was and speedy as was the recovery from Il, is
mono the less a striking demonstration of the
risk run by men Of small means who speculate
In stocks with borrowed money. They are liable
at any time to be sold out, as they were on
Tuesday. and to see their slender margins ire.
trlevably swept away. That more OF them do
not meet with this fate is duo to good luck and
not to skill or prudence. Their buying initiates
prices to a point from which 1t is easy to initiate
q downward movement, and when such a move !
ment once begins they have no reserve strength
with which to stay Its progress. Whether tho
money.lendtng institutions. who furnish them,
through their brokers, with the necessary facili- !
ties for making their ventures. are acting for
the best interests of tho community, 10 o ques-
ton open to discussion.
Consolidated Gas stock, the prico OF which fell
fast and far, on Monday and Tuesdny-apparent-
ly because some OF its owners were influenced
by tho considerations presented in this column
on Monday-has since partially recovered its
place in public estimation, and Is again o favor
tie purchase. Evidently, the buyers ofit know,
or think ther know. facts which justify them in |
paying the prices they are paying for II, and IL
the event proves that thoy are right 1t will
also prove that the sellers have been acting
upon erroneous information. 1t 10 confidently
asserted that the company, instead OF earning
only 9 per cent. upon its capital as represented,
~ kVoti 80 ~ ~ ~NNe e'e ta.f Wv. tAS
economies that can DO made and which ought to
have boon made long ago, it can continue to earn
is per cent. even with gas at 81 per 1000 feet.
Hence, 1t is claimed that its stock at present
prices will certainly yield the purchaser 5 per
cent. per annum. and probably more.
Taking the market az q whole. everything
favors q rise. We are exporting moro than we
import, at the rate Of $+o,o 900, 900 per month,
and we are beginning to receive from Europe In
-all thA hoIanra lna ~ ,ta II ta trra that thia
movement Of gold has q tendency to raise the
rates ofinterest abroad. and thus both to check
purchases there Of our securities, and to pro-
mote tho return of them hither for sale. but, as
yet, this effect Of it Is hardly noticeable. Out Of
the R47o, 900. 900 of loans and discounts OF tho
British banks only a3l, 500, 900 are made by
the Bank Of England, so that unless the other
banks cooperate with 1t, the recent raising Of
the rate OF discount BY that institution alone is
unimportant except as showing a desire on
the part of its governors to mako q little
money for its shareholders. Moreover. their
dalliance with the silverites has nightly les
sened their influence and impaired respect for
their Judgment. Here, business Of cvery kind
Ii steadily improving. and. consequently. people
are in q state OF mind which disposes them to
take hopeful views OF the future. So long as
this temper prevails no temporary set.backs. no
preaching of caution and no appeals to history
avail to chill it. Everybody wants TO see for
himself the folly against which he is warned.
and not until he sees il will he desist from 1t.
To the volunteer unofficial Currency Commits
sion, which convened at Washington on Wednes-
day, the transference Of gold to this country
from abroad. anc Of currency from this city to
interior points present an illustration OF the
working of natural financial law which will DO
OF material use to them. The task the commits
sion has before it is to devise n scheme whereby
the remote districts now deficient in circulating
medium may be provided with it. without draw
ing it from the financial centres and causing, at
those centres. q money stringency. Yet, as we
see, with no help from the commission or from
Congress, the New York banks have. since tho
beginning of August. sent to the country $780,
600. 900 in currency, and are getting from Eu-
rope gold to replace it at the rate Of $2.50o.o 600 a
week. For the present. ct least, therefore. no
legislation on tho subject is needed.
The remedy for tho supposed currency evil
which seems to find most favor. and which, at
all events, has the most advocates, Is to remove
tho present prohibitive 10 per cent. tax upon
bank notes other than those issued by national
banks and secured by the deposit Of Govern
ment bonds. Being freed from this restriction,
tho existing State banks which now do not issue
hotes would. 1t is said, at once begin to do SO;
other banks would be organized in localities
where there are now none. and the old and the
hew banks together would furhlsn 10 their re-
bpective neighborhoods all the currency that
Ras at any time needed. without draining II
AWAY from the cities, and without adding per
manently to the volume OF circulation LAKE
the genius OF Aladdin's lamp. tho notes are 70
appear when they are called for' ana 10 disap'
pear as soon as their task Is Accomplished.
Clear-sighted observers of our couptry's past
financial experiences do not fail to object that
the untaxed, unsecured. and unlimited oank cur
rency which this plausible scheme contempiates
might. like another genius In the ARABIAN
Nights not return TO lts prison mouse "nen n
was commanded TO co 30. out "ouio SCI ou'
upon a career OF mischief uncohtfoliea oy ~
original master. we nave now Tooo incorpo
rated banks in the country ana under the plat
proposed their number wouid sooh rise 10 io'oot
and over. 1t Is not conceiVapie mat these oahki
should be content TO Issue no moro notes tnat
those needed Dy thelr immeaia'e OBSERVATION-DISCLOSURES
which, In the Agricultural oistricIs' "ouiu' ip
the greater part OF the year DC next 10 none u