The San Francisco call., 1899-07-17
ENGLAND and AMERICAN GOLD.

lad it not been for the sudden increase in the
| Bank OF Eng nd rate of discount from to 81
per cent and AZ per cent for short advances the
past week would have passed without ripple
on the smooth commercial sea, which, as far as this
country was concerned, was vast expanse OF
monotonous prosperity. But the action OF the "Old
Lady of ThreadneedIe Street arrested the attention
OF American tinancers, for, like two-edged sword
it IS liable to cut in almost any direction and lead to
unforeseen results. As the financial situation in Eng
land produces or less effect trade condi-
ons in this and other countries it is not amiss to
how that country stands.
The advance in the rate Of discount caused by
a lack OF gold Last year at this time the banks
serve stood at f25,oooooo, or $I,25oo 10000 in
American money. At that time England calling
in money from Germany and paying America for her
wheat and other produce largely in securities
But this year the tables are turned England has
no balances in Germany, and as she returned the
major part of securities last spring this mode OF
payment IS no longer open to any marked extent.
Add to this heavy reductions of the reserves OF the
New York banks OF from 100000 to fl, ooo the
impending call OF the Japanese for their gold loan,
the continued outflow OF cash into the South, the
French competition for gold in the London market,
the prospect OF heavy payments to the United States
Tor grain and cotton soon as the crops begin to
move, and the inability Of the bank to obtain gold
abroad except to meet interior requirements, and it
will be seen that the "old lady will have to do
something to induce the American banks to keep
gold on her side OF the ocean, else pay the Ameri
cans for their produce in that gold which she finds
so short at the moment Hence the advance in the
rate OF discount, which it is hoped, will keep the
gold in. England The outlook at present is that
there will be few gold exports from the United
States to England in the future though, OF
course some unforeseen condition may arise TO
change the present complication
The gst OF all this is that at the moment we arc
Engands creditor. We are going to ship her large
quantities OF farm produce which she must have and
for which she must pay in some form other. She
cannot do this by selling back stocks for she
sent most Of them back time ago Ergo it is
case OF gold coin. AS gross proposition this is i'm
mensely in favor, but the proposition shows
a different aspect and that is owing to the intricate
intimacy OF the two countries in commerce and
finance what affects is bound to affect the other
In other words while we might profit temporarily
by a commercial nishap to England it would re-
bound against us later AS this condition is fully
recognized Oil both sides OF the water it forces New
York to adapt her financial condition to those of
London as far as is consistent with our own pros
perity. The cord that unites these commercial
Siamese twins must be kept intact But we have Al,
astute set OF hnanciers in New York, and they will
probably manage the thing somehow so that the
United States will be able to pay dividend or two
out OF the transaction. They generally do At any
rate, this country is the arbiter at the moment
The condition is but another proof of the i'm
Tense prominence of the United States in the COM
merce of the world We are becoming. LARGE
creditor nation and must be considered in all inter
national affairs. 1t is this fact which has caused the
advance in the rate OF discount OF the Bank of Eng
land
Another interesting fact in trade last week was the
increase in bank clearngs Of 600 per cent over the
same week last year OF eighty-two cities and towns
reporting clearngs only four Milwaukee Spring.
field Mass. Buffalo and Chattanooga-reported
decrease. This shows general wave of prosperity
throughout the country.
Neither mud hill has been able to ston the
- IL La.A. Ii: