The representative. [volume] (St. Paul, Minn.) 1893-1901, 1898-12-14
THE CONTRACTION QUESTION.
Will the Break Start in Europe.
We find the following interesting ar

THE CONTRACTION QUESTION.
Will the Break Start in Europe.
We find the following interesting ar
ticle in the dailies:
NEW YORK, Dec. Am influence Of
worldwide financial interest is the con-
diton of the Berlin money market. Wall
street is giving a good dea! of attention
to this matter, and we'll it may, as most
Of the recent foreign selling Of American
securities has come from Germany. The
Bank of England is losing considerable
gold for shipment to Germany. These
shipments have more or less Intimate
connection with the situation in Berlin.
1t is the belief here that Germany is facing
serious financial crisis. The coming
month will be one of extreme hardship
there .as it is a month Of heavy settle
ments but whether the crisis will come
then or later no one can tell. There has
already been large liquidation In Germany,
and more is to follow. 1t is stated by those
who have made an investigation Of the
German financial situation that Germany
has undergone the same kind Of business
imitation that this country had previous to
1873 and is threatened with the same kind
of liquidation and collapse that was exper-
fenced here in 1873. 1t is known that
there has been an Immense Industrial ex-
pansfOn there, especially In electrical, iron
and coal trades, and that along with this
there has been an enormous Increase in
credits. The banks have been backing all
sorts of industrial speculations. Germany
eager to capture a part of England's
great export trade, has offered concessions
to purchasers that English concerns were
unwilling to grant, with the result that.
while Germany gained commerce, 1t was at
a loss This, at any rate, is a statement
made by one of New Yorks leading finan-
ciers. The Bank of Germany's money rate
has steadily advanced to per cent, an
unprecedented rate. and. although securi-
ties have been sold in order to draw gold
from London this has only relieved the
strain in part.
The strong financial condition of the
United States has been fortunate for Ger
many, inasmuch as the supply of gold here
has been so great that it has been more
profitable for us to leave the millions due
this country on balance Of trade abroad In
the shape of credits than to draw the
actual gold. Some of our outstanding
credits held in Germany. Every dol
lar of gold we take from London makes it
harder for Germany to get the relief she
requires Hence the importation of 81 ,O00-
600 by Morton, Bliss & Co. this week was
an event Of international interest. 1t was
thought that it would probably not be fol-
lowed by other importations, for, although
it is profitable to import gold. 1t is much
more profitable to loan the money abroad.
Germany's passage through the present
terest in all the great markets. The Bank
Of Germany and its seven associated insti-
tutions have issued an unprecedented
amount of uncovered note circulation.
The aggregate is about $lOoo'ooo. Tne
law authorizes the bank to issue notes in
excess of f12, 900 whenever it is willing
to pay five per cent interest to the govern
ment. It is therefore profitable to issue
notes in excess of f12, coo only when
interest rates are high enough to justify
80 <1n
ment The limit Of its tax free circulation
has been frequently and largely exceeded
in the past three years. the excess early
this month being about $230OO.0Oo, and yet
the increase in the number OF the notes
has failed to keep down the interest rate.
The November excess was, however, much
less than that which existed in September.
The German Economist. a leading German
financial paper, recently spoke Of the dan
ger which threatened the banks because
of their intimate association with all kinds
of industrial speculations. and predicted
crash inside of two years. or, as pessi-
mists said inside of six months.
The United States constitutes the
great food producing region of the
world. It's products the world must
have, and the gold must come in ex-
change for them. Hence an immense
export Of wheat, corn, cotton meats,
ETC., tend to concentrate the gold of the
world within our borders. For
eign nations will ship back
to us our securities as long
as they have any to send, but when
these give out the gold must come. For
merly they could ship us silver; but they
have themselves disqualified the white
metal, and it is no longer money, but a
commodity, and we have no use for it.
Hence the cry is gold! gold!" 1t goes
up from every nation in Europe. Gold
for food, gold for arms, gold for ships;
gold to hoard, gold everywhere.
We should not be surprised to see the
collapse of existing conditions begin in
Europe. When it comes it will be fol-
lowed by universal revolution. Every
man will grab as much gold as he can
get his hands on and run off with it and
hide it.
We shall have reached the end of our
customers abroad. Prices here will fall
and bankruptcy overwhelm the land.
The great sham will be exploded.
We are told that the Emperor William
ran home from Palestine to avert, with
the whole power of his kingdom, the
threatened collapse. He may stave it
off for a time, but the cause is there,
working day and night, ever and forever,
like the attraction of gravitation, and
sooner or later the superstructure, sus-
tanned on the bodies of human beings,
will come to the ground. l. d.
THE RESULTS OF VICTORY.