The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1899-10-03
ENGLAND Is N DREAD
Lest Suspension of Specie
Payment Become Necessary
WAR MIGHT BE CALLED OFF
By the FinancierS If the Pinch
Should Demand Ii.

New York, Oct 2-The Times London
financial correspondent cables: Last
week was one of great tension and ex-
element. destructive to business. Even
the money market was in condition Of
suspended animation and the Bank Of
England all the week did the cream of
the discount business. Until Friday the
open market worked at SIS per cent,
taking ninety-day bills at that rate, but
quoting "a and 4 per cent to foreign
correspondents for bills coming forward,
An advance in the bank rate to 4 per
cent was fully expected on Thursday.
When no change was made the position
did not improve, but grew worse, for the
bank statement was weak The market
had drawn 81. 10000 from the Bank of
England by bills Of discount, and the
whole Of this, save SIS 900. had disappear
ed either into active circulation, or,
worse still, in gold exported.
And still gold flows away. More than
CO, 900 have already gone to the Cape,
and the real surplus in metal over La
bility notes in circulation is now under
100000. The bank itself refused to
work below ga to per cent on Friday,
and yesterday did nothing under per
cent for loans. The open market accord
ingly quoted to II per cent for ninety
day RENTED bills, and did little business.
The hope is expressed that gold may
come back from the provinces this week,
but the probability Of that is small. The
10 lac in
the loan market, because the banks are
now calling in loans TO make show of
strength in their monthly balance sheets.
Here is a crude statement of our position.
Under our Anticipated banking system,
provincial English, Scotch and Irish
banks all issue notes on their credit
alone. They are not bound even to hold
government stocks against a fixed legal
issue. The aggregate of these uncover
ed issues is about G2OO0000 short now
Of the amount required to cover the
fiduciary note circulation of the three
kingdoms. There is no real danger in the
position as long as the public is not
frightened by rapid exports of gold; but,
given active fears, notes could not be
met. and suspension of specie payment
looms up in view. It is necessary to in
sist on this in order 70 warn your bank
ers that we cannot now spare gold from
the Bank of England. Should a South
African war come, as is almost certain,
all we can spare would be required for
it. and should other foreign demands
spring upon us, a credit smash is almost
a matter of days. Dread of this smash
alone can now prevent war. All our re-
sources are fully engaged in industry and
commerce. in sustaining credit in India
and the colonies, in financing Japan and
Egypt and in innumerabe other direc-
lions. Abstract capital for war purposes,
and the entire machine is liable to be-
come deranged, with disastrous results.
Already the Transvaal government has
intimated that it win keep the gold pro-
duced for the mines until the war IS over
al except The amounts minted for ex-
penses-an ominous notice. Our thought |
ful bankers. not IN the mairity, l regret /
TO say. have been alarmed at the pros
pect for some time. ard one or two have |
begun to collect private stocks Of SOW
ereigns. These are too slended as yet to |
do much to stave off confusion, should /
exports proceed and new supplies of met
81 cease Your bankers, therefore, would /
90 well to restrict their demands to con- /
signments procurable from bullion deal /
ers.
The stock exchange remains deserted !
BY all except those who must buy or /
SELL such as insurance companies, trus-
tees. etc. but the position seems strong /
and large failures are said to be i'm /
probable. Speculative accounts. however,
are not now all carried in the market as
formerly. but largely by the banks. so
the real position is hard to guess. The |
only point certain is that business is
topped. Even Paris is becoming afraid.
General trade has not begun TO suffer
appreciably from the uneasiness. Sdmu-
lated b. enormous government orders,
the iron and steel trades are buster than
ever. and orders for ships for the mer-
camille marine are also excellent. In
other directions we have been less fav-
orded. TIE trade returns for September
~