The Topeka state journal., 1899-09-18
A GOLD PINCH.
War In the TransTaaI Means
the Cutting Off
Of LOndOn's Supply of the
"WOrld's Money"
A FINANCIAL PANIC
Is Almost Certain to Follow
Opening of HOstilities.
Rates For Money Are Already
Beginning to Tighten.

New York, Sept. 1S.-The Times Lon
don financial correspondent cables;
Our money market anxiously begins
to reckon up war risks. All last Week
we We're hoping against hope thaI
peace might be maintained. AS write
that hope has almost been abandoned
and rates for money are thereLoIe
tightening wholly irrespective OF pusl-
ness demands These, indeed, are very
moderate for the home account OuI
discount market would have little oc-
cupation did it depend on the domeSuc
supply of bills, for that does not now
amount to 25 per cent or the total value
of paper handled
This is one great source of anxiety
for our credit institutions Not 50
many years ago quite 20 per cent OF the
bills of exchange current here were Oh
English origin now it is quite the otheF
way.
count houses buy foreign bills in large
amounts, but French, German, Rus
sian, Dutch and Japanese banks pos
sess important London branches en-
gagged in placing daily a large volume
of bills on our market During your
export season each American mail also
brings heavy cOnSignments OF your
mercantile paper. 1t is therefore OF the
utmost Importance that no hitch should
arise to prevent our credit establish
nentS from being able to regularly
handle this stream OF remlttanceS.
Dear money must produce this hltcn
L
some days last week the discount
rate slipped below 372 per cent On Fri
day and Saturday brokers quoted 39s
per cent for 80 day bills and for foreign
bills of four months 3& per cent. Great
er dearness is expected this week, al
though money till today was offering
Saturday at 1 per cent IOday a call
amounting to 16OO, 600 pounds is pay
a BILE on the Japanese loan All along
short advances have remained easy at
y-aV1 "a II l.
days stock exchange payments merely
drove quotations on call money to )
per cent for an hour or two. Indeed,
most bankers had loans repaid be-
cause speculative accounts have been
much reduced through the dread OF
war. But cheapness Of this kind means
nothing more than the desire to keep
credits at elbow so to say. Tested by
the cash gold held in our banks We
are in no position TO stand pressure fol
one day. Including balances at the
Bank of England, they probably do not
hold per cent of their liabilities to de-
positOrs in gold, as an able correspond
ent points out in tOday's Investors Re
view. But it is just their capacity to
pay gold that may soon be put to the
proof. The TTansVaal is the principal
source of our gold supply; almost the
only present source since the Indian
government purposes to buy the out
put of the Indian mines and Australian
production is taken partly by the
United States. War in South Africa
Rand mines for a time but subject the
Bank of England to a drain of SOW
ereigns for the Cape. Already a mil
lion has gone thither exclusive of small
conSignments from Australia. Were
the Rand product, not over 10000
pounds a month stopped, a gold pinch
would therefore be upon US almost i'm
mediateIy and I am unable to sketch
the trouble that would follow.
Why then go to war? In my opinion
because Cecil Rhodes chartered COM
pany is nearly played out It has spent
seven million pounds and has little to
show for the money save a huge terri
tory almost completely unprOductiVe.
The vaunted RhOdesian gold mines pro-
duced little more than 100000 gross gold
in the last twelve months, and the out
put in August fell to 3 179 ounces. La
Dor can not be had as the Matabeles
refuse to enter the mines and as the
expenditure of the chartered company
exceeds its income by nearly $500, 900
a year on its own admission. Better
fight with the chance of annexing the
Transvaal than allow the fascO to
reach it's natural and inevitable cOnclu-
sion.
The prospect thus opened causes ap-
prehensiOn. Our credit system is so del
icately poised, so absolutely dependent
upon our command over the supplies
of gold at the moment they are requir-
ed that the StOppage of such supplies
at any point is calculated to disarrange
the whole machine.
In their anxiety our bankers are al
ready discussing the probabilities of
New York taking gold from London
this autumn and the advance in your
rates for money is not calculated to al
lay these fears. Our position is much
weaker in the face of this contingency
than it was a year ago. Then we had
an abundance of your securities, for
which market could be found on the
continent as well as in America; now
we have only a few.
The story that all danger of a famine
in India has been averted is untrue.
The rain came too late to save the
principal crops
CONSOLS FLAT.
London. Sept. 18.-The South African
crisis caused all round weakness of the
stock exchange today. Consols were
very fat and kaffirs were much de-
pressed
Rand mines shares declined 23s and
the others from 1zto IS. COnsoIs fell
off g.
FAILURES BEGIN
London, Sept. 1S.-The failure of
James David Barry is announced to-
day.