New-York tribune., 1908-01-04

sonable expectation Of increasing 1t after the
withdrawal of Chinese labor: but what warrant
is there for the belief that the bullion reserves
of the kingdom will be enlarged during 'he
corning vear2 England will not accumulate.
but will continue TO distribute gold. as mas oe-n
its practice since the Australian and South AZ
rican discoveries II is the only great country
which has not increased its gold reserves oul-
inc the last thirty years: and this is because
no measures taken for enlarglng the pap7R
currency and for requiring the joint stock banks
to share with the Bank Of England the re-
sponsibilfty of keeping gold In sight Thers
may, aIvxavs be a larger gold stock in the coun-
try than banking returns disclose. although ex-
Derienced fnanciers like Mr.. Holden. or the
London CITY and Midland Bank. admit tnar
there has been an elastic expansion or credltS
and that the cash basis for supporting 'heih
is extremely narrow; but there is never goia
stock in sight so large as TO render delehslN0
measures unnecessary when there Is an einer
gencv abroad and bullion IS called for Inc
per cent rate alone prevents an exhauseinS
cold drain at the present moment and dear
money is not only a wet blanket for every N
dustrfaI enterprise and commercial interest," Du1
IN is also responsible for a general deprecidSlch
of securities. Seven per cent depresses CoN-
soils and stocks OF every class. keeps the mu-
,,ioirDa
,,-e+-ants the floating of new issues and the de-
ve1onr1ent of valuable properties ana renuels
rern,anent investments Of all kinds less remit
nerative than they would be if money were
easier. Financial writer's consider themselves
=. 1;bar+x, to condemn economic barbarisTn
~ America as the root of all evil but there Is
or,n1a evidence that the area Of disturbance
.+ home ard abroad is enlarged by the drastic
methods adopted In London for protecting an
INADEQUATE gold stock The heavy trloute
now maid to banking interests and TO money
lenders would be materially reduced If there
were larger reserves of bullion in sight
The English rsania-for prejudice is rapidly
becoming little less than mania-for noidHis
Americans responsible for everything that goes
wrong in the business world is illustrated ny
the depression in diamond shares Runnors
that dividends will be passed and production
restricted in the chief South African diamond
mines are sending down shares. and the cur
rent explanation is that the American demand
for diamonds has fallen of in consequence Of
hard times and the shrfnkage Of great fort
unes This is probably a half truth. a more
accurate statement being that there has been
q general decline of prosperity throughout the
world during the last twelve months and that
the demand for diamonds has fallen off The
foundation of the vast fortune which has been
used in the establishment Of the Rhodes schol-
arships was laid when the production OF dia-
monds was limited and the industry rescued
from destructive competition Diamonds havs
not been allowed to go begging The supply
has been systematically regulated and prices
have had an upward trend for decade As
soon as there is any risk OF their being cheap
ened the production is restricted ard IL a sim
gle dividend be whitfield down De sSed alto
gether there will be glUt OF diamonds
Americans after being the largest purchasers
during reveI Of prosperity. are now retrencn-
ing and econOrnzing. and when this year Is
compared with the last there is a smaller sur
plus here and everywhere for articles Of lux
ury like diamonds.
That is another way of saying that the pros
terests. and that the pressure OF hard times in
one quarter IS felt everywhere. Il is the dif-
ference between low rate easing business at
home and abroad and . per cent. by which the
screws are put and everybody is squeezed
Nor can the candid Briton wash his hands
with SNUG satisfaction and declare that the
reckless Americans are doing all the mischief
He cannot deny that the necessity for greater
gold reserves and a more elastic currency sys-
TEN remains. and that the pressure OF economic
disturbances and hard times is vastly increased
when with more scientific finance the might
be g. or even > or g. T. N F.