The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1899-08-28
A YAWNING CHASM
Of Bankruptcy Revealed to q London
Financial Writer.

New York, Aug 2S-The Times Lon
don financial correspondent cables:
The Bank of England is gradually
getting beaten in its attempt TO sus-
tain money market rates. 1t has Dor
rowed freely from the market in the
hope of maintaining discounts at Its
minimum but has failed and the work
ing rate is about 334 per cent, with
tendency downward I believe money
must become cheaper for several rea-
sons, chief among which is the stagna-
ton of business produced by politics
in South Africa and France.
Our manufacturing industries are
kept in full activity by orders booked
before either of these sources of ankle
ty became acute but new orders are not
now pressing forward and unless the
clouds soon dispense we shall have an
outcry about the scarcity of work with
efforts to reduce wages which are sure
to produce labor troubles.
AS for stock exchange speculation it
can not get scope anywhere, and even
scarcely anything. We are sorely
tempted by advancing prices in Wall
street and by all good news about
crops and manufacturing prosperity
sent over the cables daily but the mass
of people find their courage fail them
before the dangers of war and reVolu-
ton This inaction operates to reduce
new demands upon credit and the alb
sence of these, more than the increased
strength of the bank presses down
rates on money. It is impossible to
FAGCp the QlSCOQnL at so per cent When
seven day loans can be had at 2H per
cent I am doubtful because directly
they go low enough to open our bullion
market to foreign buyers, gold will flow
out and the rate hosting process will
have to be resumed. So near is export
gold now that the bank can only COM
mand supplies coming to hand by offer
ing a farthing more than the mint
price for them. In favor of cheapness
are the civil complications in France
which would send French money to
London while against it are the urgent
necessities or Germany, the consider
able requirements of Russia. the prob
able famine demands of India and last
and worst, the approaching necessities
of South African war. This catas-
trophe is now well nigh certain and
will have two consequences inirnicaI to
the continued cheapness of money It
must interrupt the supplies of gold
from the Rand mines and involve the
shipments of sovereigns to pay military
charges at the Cape.
Looking at the aspect of affairs from
the broadcast possible stand point can
see small hope of good times here for
Dull operators of any kind for months
ahead. The political sagging of the
money market is not because of a heal
thy product or abundance of wealth
but because of symptoms Of disease in
the body polite. Verify the burden of
the empire is heavy for US. But a fort
night ago the secretary of state for
India pleased the country with a bright
nara tive of Indian prosperity and with
a budget surplus exceeding fifty mill
ion rupees. Now a famine is certain
to be felt over large area of Central
and northwestern India
This is probably good for your farm
ers, but for us it means more loans to
India to help pay for food for her
starving millions. And nowhere else
are we particularly happy if the truth
be told Australia is putting a bold
lace on It's position, but no colony there
is really prosperous. New South Wales
IS not yet sure whether her loss in
sheep by successive drouths should be
~ or 80 millions Wool is dearer and
in rising course, but is not suffi-
c1entIy high to give cOmpenSat ton for
less stock. Hence, bottomless CULTS of
bankruptcy yawn open at frequent in
tervals and allow those who can look
TO behold large trading or ranching
companies kept alive by draining away
the remaining resources of banks that
should have failed and been wound I'D
Tor good in 1888 The very revenues of
these colonies are often deceptive
through capital being treated as in
come. and are bodefuI of hopeless en-
barraSsmentS should a real credit crisis
break out in London. No wonder our
bankers are often anxious and nervous;
no wonder the bank of England vigor-
ously struggles to protect the market
and collect gold against a day when
it alone can fill gaps in the credit sys-
tenn now worked thin and overbur-
dened.
The crisis might be put off for years
IN peace, but with war and famine to
contend against, it may be a matter of
months.