The San Francisco call., 1907-01-13
British Writer'S Notable Book
on American Finance

NNF FE are allowed tc see ourselves
NY nationally as others see Us
w in p most interesting volume
from the able and industri-
Gus pen OF W. r. Lawson. a volumin-
Gus and much British journal
sst and writer on the economies and
finance OF his own and other coun-
tries His present work is American
Finance" with the subtitle Domestic"
20 indicate that he purposes considera-
tion In 2 later book OF the same sub
feet in its international aspects. The
Interest manifested on this side OF the
Atlantic in Mr. Lawson's American
Industrial Problems" and our respect
cul attention 10 his views on the
economics and finance OF England ap-
pear to have made him sure Of his re-
ception when he comes, an alien, TO tell
us or our own internal affairs, for this
book" he prefRces, is written espe-
cially for American readers, the most
Fpprecistive and sympathetic that any
financial writer could wish for" And,
By way OF preliminary tribute. he pro-
ceeds: The American people are MAX
sng financial history on the largest
scale OF any nation. il is natural there
fore that finance should be TO them a
living, working interest. Their prac-
fioal activity keeps their minds open
and alert They are wholly free from
the Golden fetish, which has paralyzed
economic science in England. They
have courage enough 10 hear both sides
OF q question. and they take the trouble
70 Judge for themselves. Neither are
they afraid Of honest, Independent
judgment from others. once on a time
they were proverbiRlly thin skinned. but
Jefferson Brick is as dead as Queen
Anne"
The author IS candid in admitting
that his American readers will dissent
from good deal that he has written,
but believes they viii give him credit
1or lis hard. honest work" However
thai rlay be. De Is TO be credited with
q cle21-cut courage and freedom OF
thought = notable clarity or vision
ana marked persp. .cuity OF presentation.
Indeed. Air. Lawson has succeeded in
ma SinE t.ls 7rorE on & subject es-
seatail. cry ard Inevitably hesvy SO
Gle 21d straightforward and has
toucncc with such interest that IL
Sh7ald aot faH go attract and hold the
a. atior o. ,Ho casual and careless
reElc-.
a histo-2 of the American anancia
sysJe1, IS ncecesarily. preliminary 10
any discussion ~ tho problems whic
hare crown zap within and around
This h;stor. Ir LAWSON presents -
fair1cse and with brovity yet iliumh
it with interest Rapidly he comes
the problems ana the dangers OF oui
syste7l-the banking treasury." the
fnelastic currency. overspeculation. the
''milliouaire AIoloch" and the trusts
dealing with them all so v,g,. -1ss.
70 tempt bis reviewer 10 lavish quota
tion. In his closing chapter he pre-
sents what he deems the gravest OF our
perils. pleasing himself 10 call il the
''delusive gold reserves" To quote him
5ragmentarily. 'It may sound inimicsl
70 scent danger in what bankers all
over the world are accustomed TO con-
sider their sheet anchor-namely
their gold reserves. u is possible. how
ever 10 have too much OF even so pre-
cious = thing as gold. It is not only
possible but very easy 10 make a bad
use OF IT, That is what many bankers
are now doing, and nowhere else IN the
world so systematically as in New
York They reserve the tone function
OF gold when they acquire IT for the
purpose OF building up on 81 q super
structure Of speculative credit.
Much more gold is employed today as
margin for speculative bank accounts
than as margin for commercial bank
accounts. The gold hunger
TOW raging in every monetary center
OF the world has nothing to DO with
currency. 1t is the continual
expansion OF banking-in other words,
OF credit operations-thst absorbs the
millions OF gold which appear and dis
appear in London weekly. In
London as well as New York the effect
i've gold reserves Of the principal
banks cannot be said TO average over
or per cent OF their liabilities.
In comparison with the huge
fabric of banking credits which they
are supposed to safeguard, they are, in
both cases, absurdly small AS
cover for their banking liabilities. the
gold reserves OF London and New York
are a delusiOn and a snare.
This peril, far from being guarded
against. is being hurried 10 2 head by
international banking operations which
increase the work and the strain
thrown on gold reserves cOnfessedly in
adequate for their proper duty.
Under this new regime gold is rapidly
k,ecoming the most mischievous and
Aerplexng OF CANDLES. The gold
hanipulators are becoming artists at
their peculiar work. They no longer
buy and sell openly like honest traders.
In London they pick up shipments of
gold by stealth and hide them away
Tor use at the proper psychological
moment International bank
ing has much TO FEAR from its own
enartness n this be the direction it's de-
velopnaent is taking. IT viii 5uggle