The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1899-12-27
BY SPECULATION, GREED
CAUSING AN ENORMOUS INFLA-
TIoN OF CREDITS.
MULTIPLYING BANK RESERVE REQUIRED
The Real Secret Of Reactions is in Speculation
on Margins. People Who Howl About
Their Losses Have Never Paid
FIR Thor HoIdnre.
For Their Holdings

Washington. Dee. 2G.-Mr Roberts,
the Director of the Mint, was asked to-
day as to whether the present monetary
stringency, in his opinion, signifed an
actual scarcity of money to meet the
present requirements of trade. He said:
NO possible supply of money can pre-
vent stock exchange panicS or periods of
monetary stringency, because specula-
ton and rising prices will absorb any
possible increase until the pressure for
ready cash is just as great upon the new
plane as it was upon the old. The cry
for more money is as indispensable as
the demand for more wealth. A new sup
ply instead of satisfying the demand
stimulates it. Men want money to buy
things with-good things that they think
are going higher. Given easy money in
the banks and we have bankers encour-
aging borrowers. As "a result stocks go
up and as they go up more people want
to buy, and so the demand for money
increases. You can't furnish money fast
enough to meet the demand of all who
would like to borrow while prices are
going up, nor could all the gold and sill
yer mines III the world together keep
prices going up forever.
'"The real secret of these reactions is
in speculation on margins. These people
who. are crying that they have been fore
ed TO throw away their property had
never paid for their holdings. They bor-
rowed money OH call to make small pay
ments hoping that a right turn in the
market would give large profits. But in
that class of operations losses come as
easily as profits. That is one of the con-
ditions of the game When they have
profits they call it prosperity, but when
they have losses they think the country
has come to standstill and want to
know who is to blame Nothing has
happened, except that they have been
asked to pay what they owe.
1T is impossible to do away with such
speculation by any means in the money
supply.
in short it is not legitimate business
that causes the enormous initiation of
credits, multipies the bank reserves re-
quired and thus absorbs any possible
money stock. SpecuIation-greed, will
inevitably do it. and as it is obviously
impossible to satisfy that appetite, it is
.lDSufu TO point 10 II IiEnI 1nUIley DHdFkEI
as a proof of an insufficient supply.
Undoubtedly the war in the Trans
vaal has had influence upon our money
market. Anything that disturbs normal
conditions. which turns the currents of
business out of the course they have been
expected to follow, will affect business.
With trade balances as they are our
bankers early in the season had reason
10 expect gold imports this fall, and
probably directed their business accord
ingly. The war has not only cut off a
remittance of about S2,000,000 per week
TO London from South Africa, hut com
PEELED heavy shipments the other way.
Such a reversal of the regular antici-
pated order makes money tight in all cen
tres until affairs are readjusted to the
new condition
THE world does not depend upon the
Transvaal for its stock of gold. Colo
RADIO will produce more gold in 1900 than
all North America yielded ten years ago,
and this continent will yield more next
wear than the whole world did ten years
ago. Cripple Greek is mp to the record
of the Transvaal five years ago and Grip
ple Greek with Alaska and the Klondike
will next year exceed the Transvaal pro-
duction of 1907. The golden tide though
checked for the moment is not going 10
salbside.'