The sun., 1898-02-28
,vr prMAyD ron oorr zoxEr

was Shlu III thip SohuhihA s%Ns ANASHNtSt
VA hocn I'D to that time. prevented from bo-
hau .crious by the resistance OF stronp buy
,SSoioncnt broke through that barrier the same
rd IN spite Of all efforts to check Its career,
W. u'.' r Thursday into a voritablo panic. Az
TO-" ,I tho chief sufferers were spcoulators Of
I'll means, who were carrying on margins
...rs which they had bought at prices far
s.oro their real values, and which. therefore,
..s.o no thrown overheard at a loss, not only
!. themselves but to their brokers' In the more
Lila securities the declines though not so great.
ave still, Sufficient TO make their holders un-
.a,,,or,oble, and to inspire them with the wish
49,, ,b,v had sold their holdings in time to re-
placc them at q proht'
Tho lesson taught by tho collapse Is 30 OBJ
.,ous and tho moral to bo drawn from IL Is so
,,t,e that II would only weary the reader to re-
u.s,s. them. Old and stale as they are, how
- enough people arc always found who can
w, or who will not profit by them, to furnish.
IT, ,bc occasion arrives. fresh illustrations OF
,hoir vority. 1t is only i've years ago, that, In
,ho oo,rly months Of 1898. we had precisely the
..n,e imitation that we have had during the past
,o,y months and 1t was followed by panic
similar 10 that which has now occurred. ana
"a, tho number OF persons who were taught by
,bo eyrc-cncc OF 1893 to avoid tho present one.
4, Il Is safe to say, very small. That nve
vsar. hence, and even earlier. the experience
will he repeated and upon as many victims, 10
.,.o among the ccrtainties. The late Phineas
r. Ba.num used to say. that II all the foois IN
,ho limited states would only pay him quarter
ma dollar apiece TO see his humbug show once. he
,,ouIl ret nll the money he wanted, even though
nore oi ,hcm ever came second time. Tho
h,o.crs o. the Stock Exchange do bctter than
Mr.. Bornum did. Their customers not only
come back over and over again, but are Joined
nv new ones. from year to year.
The panic of 1898 was heralded. and. in great
measure, precipitated, by the action OF the
country hanks In withdrawing from the banks
NJ this city tho money which they had on de-
nosit with them. This year, too, similar with
drawals Of country bank deposits preceded the
manic we are witnessing, though 1t cannot be
soid that they contributed to produce IL as the
Withdrawals OF 1898 contributed to produce tho
panic OF that year. Our banks, our Government
and the country generally. owing to our large
excess Of exports over imports, for year past,
arein far stronger position than they were In
1898. We are importing gold instead of export
ING IL and both the banks and the Treasury can
endure, without injury, far severer depletion
than that which they had to endure in 1893.
Consequently, we may reasonably expect that
the present panic. though similar In its charao-
ter to that OF ls93 will not be so extensive, nor
produce so long continued depression.
A noteworthy effect OF the withdrawal Of their
balances by the country banks has been a con.
traction in the supply Of paper money In this
city. and the use of gold coin by some Of our
banks instead OF paper, in paying their dealers
checks. At first remittances were made to the
country banks by depositing gold in tho Sub
LII, fa, IL fk., IL
in currency at the SubTreasuries at interior
points. The process, however, so reduced the
currency reserves Of tho Government. that 1t had
to be stopped in order not to deprive tho Gov
ernmcnt OF means for making its regular pay
ments. This, in turn, compelled the banks to
furnish the currency out Of their own reserves
and thus, finally. to pay out gold coin in its
place, much to the dissatisfaction of those
VINO received It. The incident IL instructive,
as demonstrating both the preference given by
our people to paper money over coin. for their
ordinary ransactions, and the usefulness Of an
act Of Congress which should require tho Treas
ury to accept gold coin without limit from do
positors and issue to them for it Government
notes. There 10, indeed. the act Of 1882, permit
ting the issue Of certificates of deposit against
gold coin. but that act is pormissive only. and
not mandatory. and resort has not been had to
since 1894, when tho Treasury gold reserve
fell below 500, 100000
The fact Is. that not only In this country but
In Europe. the demand for coin to be actually
used as money Is decreasing and that for paper
money is on the increase. In Great Britain, in.
deed. under the operations of the Bank act of
1874 and owing to the tenacity with which the
British people cling to old habits. the use of coin
money still largely predominates over that of
paper the total issues Of paper money in the
whole United Kingdom amounting to but $780,
100000 while the coin in circulation Is esti-
mated at S400000.O00. As travellers know by
experience, notes OF less value than a5. or $685.
are comparatively rare in Great Britain, and for
paying sums OF less than a5 only gold sovereIgns
and half sovereigns, and silver half crowns and
shilings are employed. On the Continent how
ever, different state Of things prevails. An
Official inquiry made, last September. into the
Kinds OF money held in France by the Treasury.
by the Bank of Franco. and by tho other great
French financial establishments, showed, that
out of $4,000, 900. ave-sixths was in Bank Of
france notes. and less than ono e-eighth in gold
coln' the remainder being made up of silver
nve'franc pieces and small change Assuming
thIs proportion to hold good throughout tho
country the circulating medium of France
consists OF $75O,oo0.000 in paper. 500 600, 900
IN gold coin, and $50.0OO,O0O In silver COIN
Germany uses $3.50, ZOO. 900 in paper money.
Austria $500, 900. Italy $500. .oOO. 900. Spain
100000. and European Russia $3.50, ,oOO,-
ooo, the aggregate, including France. being
s!.a9o'ooO,o0O for a total population of ESQ.,.
ooo'ooo. At the same ratio this country. with
us population of 70.OO0,00O. should have but
sooooOOoO0 Of paper money, whereas. in fact
We have 81 . 100 O0O. 900.
The quantity OF coin circulating in Great
britain and in France has been estimated. rs we
a"'e seen, with approximate accuracy, but in
'he other European countries mentioned. II can
0"'y DC guessed at. We know that in Italy gold
aaa silver coin have both been entirely super
s'ued by paper and in Spain gold 10 not used,
o"' no statistics show the coin circulation of
Au'.in. Gormany. and Russia. In this coun-
W W Almost tho only coin seen east OF the Rocky
"o"h'h'hs and north of the line of the Ohio
."'er IS fractional silver. while silver dollars
III u, south. and on the Pacific slope both sill.
,er collars and gold coin, arc in general use. 1t
ncettnlnly sNfe to say that In the United States
W" IN Europe the proportion of paper money to
,''" money passing from hand to hand, 10, at
''"o'' threc to one. and probably 1t Is more
'"e reason for this preference OF paper money
" ~ CON money Is obvious. Paper money is