The Winslow mail., 1900-08-02
MONEY IS VERY SCARCE.
Inadequacy of the WORLDS supply
All Gold Standard Countries
Feel the Pinch
The last number of the Investor

The last number of the Investors
Review, of England, published bv A. j.
Wilson, contains the following under
the caption, Nemesis"
Perhaps in this age whose faith is
that might is right; that he should take
who has the power, and he should keep
who can; when materialism. in short
of the grossest. kind appears to have
taken the place, in the majority of
minds, of any higher ideal or fragments
of a nobler faith-our attitude may be
ascribed 10 atavism. Be that as it may,
we do retain the conviction that evil
doers meet with their due reward,
even in this world; that if men commit
crimes, CIR lend themselves to the COM
INITIAL they will suffer for it; ii 1T in
the case of wars, as Lowell sang:
If you take a sword and dror it,
And go stick a feller thru,
Guv' mint amt to answer for it,
God'll send the bill to you.
We shall not dwell on this personal
and individual aspect of the present
fratricidal strife pounding and floun-
dering along in South Africa, because
the object of this article is to draw at
tention to broader national aspects OF
the Nemesis of suffering and disaster
which is preparing for US as nation.
Let us come down to the sordid things,
and interpret fact and the forecasts
of these and these alone Is it not be-
ginning to be plain to even the least
instructed mind that this war is going
to bring vengeance upon us even long
before it is finished? Look at the posi-
tion of our money markets and of our
stock markets, to come at once to plain,
practical issues. Compared with the
highest price of last year the deprecia-
tion on consols alone to-day exceeds
e50,000,000 In all other securities of
what may be described as the highest
investment class the same depreciation
has gone on, as the fallowing brief
table will indicate. We take the price
of June 80 last as being those of a date
when few people really grasped the
fact that Mr.. Chamberlain, Sir Alfred
Miner and Messrs Rhodes, Belt & Co.
were laboring might and main to bring
war upon us. Highest prices" in most
severe than the 43, 100000 exhibited
OIL the % stocks selected as examples.
"To estimate the gross amount of the
loss of nominal capital that similar
depreciation over the entire list of pub
lie securities means is a labor beyond
the necessity of our argument; but it is
certainly notless than e250OCO. GOO, and
is on its way to be twice that, for the
end of the decline is not yet in sight, is
indeed but beginning. AS the months
roll by the loss is certain to increase at
accelerated speed, and with each step
in the decline the EN- barrassment of
our credit market increases.
No reader, we suppose, ever stops to
examine the foundations of our mar
yelous system of credit, to ask himself
when he pays away a check what the
amount written upon it is composed of.
He regards it as so many sovereigns.
You draw check for 6 100, and it is
to all practical purposes, as long as
honored, check of 100 sovereigns. AS
a matter of fact, however, it is only so
much banking credit that is thus
transferred from one bankers ledger
to another, and if the component ele
ments of this sum were, to say, chem
ically analyzed. it would be found to
consist of minute portions of an almost
endless variety of securities. Along
with a bundle of consols and perhaps
Northwestern railway stock or "little
Chathams" traces might be found of
lie Roi shares, "Associateds," ''Char
tereds," Rand mines, Goldfields, Mata-
beles, Ashantis, Lipton's Salt Unions,
1vanhoes, list that might be indef
nitely extended. In other words, banks
in the course of their business have
given customers credit more or less
well secured upon every description of
stock or share dealt in on the public
market.
The credit thus created is called
money" and passes from hand to
hand through checks and other instru-
ments Of transfer from banker to
banker as money. So long as the bor
rowers of this credit, at whose instance
it has been originated by the banker,
are able to pay interest charged against
their loans, and to make good the mar
gins upon the securities pledged, all
goes well; but when the day comes that
finds them unable to do either the one
or the other, then the banker has to
face a loss, and in proportion to the
loss the amount of bank-created credit
circulating in the market is diminished.
An elaborate essay might be written
in llluStrat ion of the statement con-
tanned in these few sentences. but it is
unnecessary just yet Our immediate
object is to point out that the shrink
age in the market prce-not alone Of
the miners and bubble industrial or
other trading companies whose names
we have cited-is having a direct infiu
ence in curtailing resources of our
banking institutions as whole As
sumo, for the sake of argument, that
the total depreciation has reached
6 3O0, 100000. and it follows inevitably
that no small portion of this has pro-
duced an unfavorable effect upon bank
ing resources. If consols have depre-
ciated upwards of G $4,000, 600 from the
highest price of last year, and upwards
OF G26,000,000 since the 1st of July last,
it follows that whatever amount of
consols has been utilized for creating
credit is to the extent of this depre-
citation less efficient than it was. When
consols were at III a borrower could
obtain perhaps credit to the extent of
1O5 upon each e100 nominal of the
stock lodged. Now that they are down