Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1900-01-15
STARvIrH THE COMMERCE
What British Government is Doing by lis
Financial Policy 10 India.
English Money Markets Far from
Safe - London Report OF the
Financial Situation.

New York, Jan. 1.-THE Times Lon
don financial correspondent cables
The collapse in money discount rates
was unexpected. The upholders Of rates
were not merely defeated; they were
routed, and whereas a week ago the
leading discount houses scoffed at the
idea of buying bills under lh per cent
they were glad TO take less than four
per cent by the middle OF the week
Just closed. Loans were still cheaper
call money falling to and "a per
cent, and time money to per cent
or less.
Met by such weakness, the directors
of the Bank Of England had no choice
but to reduce their rate TO 5 per cent
and one really now begins TO doubt the
wisdom OF their having abstained from
taking this course week before. For
no sooner had the bank thus acted than
the bank Of France followed suit, bring
ing down its rate to per cent, and the
bank Of Germany also eased the tension
by going back to per cent. These
movements prove that It was dread OF
the Bank OF England's power that all
along kept continental rates as stiff as
they were. At the same time, the do
nestle strain in Germany is not over
yet. The stock Of gold is short and
advances and discounts require further
contraction TO make the bank COM
Portable.
Is the position really SO much easier
anywhere than II was? No, but the
end OF the years demands for credits
have been satisfied and apprehension is
therefore now much less active than
Ii was.
We have surmounted our troubles
without collapse say the controllers OF
credit and, having greater confidence
through this happy circumstance there
is a general disposition to take more
cheerful view OF the future and let
optimism have full swing,
Coming 10 actual figures, however.
the position, as far as the Bank OF Eng
land Is concerned. seems little better
than II was before the bank rate was
raised TO 6 per cent. True, the stock Of
gold is about e4.000, 900 better than the
worst seen during the period OF tension,
and the reserve is f4,50Q. 900 greater,
but the bank possesses only about g.
100000 more gold than IL had when the
rate was raised at the end OF No
vember, and the banking reserve is
barely f2b00 900 up. This improve
ment is certainly not sufficient TO shield
the market from the recurrence OF
sharp plnches during the current six
months.
The decline in rates that has now
come upon US Is the product OF a little
fresh credit put on the market by gov
eminent borrowings and a little gold
received. These helps and the reduc-
ton in public requirements brought
about by higher rates at the end Of
the year, cause credit 20 seem In ex-
cessive supply, whereas the margin be-
tween what Is wanted and what there
Is on offer II not more than q million
or two. II Is noticeable that directly
the strain Is lifted off our market, the
government OF India steps In again with
It's gold storing nostrum and has this
week bought up e500.0e0 TO be put
aside against It's notes issued I'm India.
The metal cannot be spared. and ought
- Il have been taken since y does
india not the slightest good. BY dint
Of keeping currency short there, the
commerce Of India Is continually OPP
pressed by high rates for credit. Both
the banks OF Bombay and Calcutta are
now charging ) per cent. The govern
ment contrlves to sell its London drawn
bills on the presidency treasures AT ar
tihcial prices because Of this scarcity
OF money in India, and puts itself In
position OF apparent great wealth
on the London market, enabling II 10
play at gold buying and that sort Of
nonsense. whereas In reality It 10 not
only starving the commerce Of the