Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1899-12-27
MONEY sTRINGENCY, ACCORD
ING TO DIRECTOR
ROBERTS,
OF THE GOVERNMENT MINT.
NO SUPPLY OF MONEY CAN PRE-
VENT STOCK PANICS.
Speculation on Margins the Real
Secret of Monetary Reactions.
"Absurd to Point to a Tight
Money Market as Proof of an
Insufficient SuppIy'.-The Infiu-
ence of the TransyaaI War.

WASHINGTON, December 26.-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
prevent stock exchange panics or per-
iods of monetary stringency, because
speculation and rising prices will alb
serb 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 I'M
appeasable as the demand for more
wealth. A new supply instead of salts
flying the demand, stimulates it. Men
things that they think are going higher.
Given easy money in the banks and we
have bankers encouraging 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 silver mines in
the world together keep prices going up
forever.
"a marvellous era of increasing mon
ey stocks began in 1850 and started
period of speculation which ended with
grand worldwide smash in 1857,
when even the Bank Of England had to
suspend payment, without any decline
in production and with the minis every
where open to both gold and silver.
The real secret of those reactions is in
speculation on margins. These people
who are crying that they have been
forced to throw away their property
had never paid for their holdings. They
borrowed money on call to make small
payments, hoping that right turn in
the market would give large profits.
But in that class of operations losses
come as easily as profits. This is one
Of the conditions of the game. When
ity, but when they have losses they
think the country has come to a stand
still and want to know who is to blame.
Nothing has happened except that they
have been asked to pay what they owe.
ut is impossible to do away with
such speculation by any increase in the
money supply. If a stock selling at
$500 per share has an advance of $40,
the investor who owns it outright
makes but ten per cent, while the spec
ulator who has up only a margin of
$40 makes 100 per cent. That is the
secret of marginal trading.
In short. it is not legitimate bus
mess that causes the enormous intia-
ton Of credits, multiplies the bank re-
serves required, and thus absorbs any
possible money stock. Speculation
greed-will inevitably do it, and it is
obviously impossible to satisfy that ap-
petite. 1t is absurd to point to tight
money market as proof of an INSULT
cient supply Of money.
Undoubtedly the war in the Trans
vaal has had influence upon our money
market. Anything that disturbs nor
NAL conditions, which turns the cur
rents 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 to expect gold imports this
fall, and probably directed their bust
ness accordingly. The war has not
only cut off a remittance of about 81,
100000 per week to London from South
Africa, but compelled heavy shipments
the other way. Such a reversal of the
regular and anticipated order makes
money tight in all centers until affairs
are readjusted to the new condition.
"The world does not depend upon
the Transvaal for it's stock of gold
Colorado will produce more gold in
1900 than all North America yielded
ten years ago, and this continent will
yield more next year than the whole
world did ten years ago. Cripple
Greek is up to the record of the Trans
wall five years ago, and Cripple Creek,
with Alaska and the Klondike, will
next year exceed the Transvaal produc-
ton of 1897. The golden tide, though
Checked for the moment, is not going
to subside.'
The Lawton Fund.
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