New-York tribune., 1910-11-23
i. S. AND FOREIGN DEBTS
TWO English Economists Discuss
American Finance.
MlMGLE PRAISE AND BLAME
Views Of Editors of Economist
and 'statist' Argument
for Central Bank.
from The Tribune Rnraa,

from The Tribune Bureau.I
Washington. Nov. 22-Essavs of more
than ordinary interest. enbodving the com
ments of two well known English econo-
mfsts on some aspects of American
finance, are contained in a report just pub
lished by the National Monetary Commits
sion. Francis w. Hirst editor OF THE
Economist, reviews at length the national
debt Of the United States and the munich
pal debt OF several large American cities,
and also discusses the debts of Great Brit
ain, Germany and France. Mr.. Hirst SAYS
that New York has suffered much for its
extravaganza. He adds that there are few
cases where any city OF standing in the
United States has repudiated its obIiga-
tions. The other essay is ny George Paish.
editor of THE Statist. who discusses the
trade balance Of the United States,
Tracing the national debt of the United
States from the time when it began by
reckless issues Of paper money by the
colonies, Mr.. Hirst finds much to commend
and soma things to condemn. In the re-
duction Of the Civil War loans between 1880
and 1890 and the saving in interest of
about $50 ,001 thereby, the author sees
reflected the high credit Of the United
States. but in the financing of 1890. after
the SDd-lISI " di, ne CIlLtCIEt9 tiic
for extending the maturing bonds thirty
years. which. he says, put nearly S55o,doo'V'o
of the public dent beyond the chance Of
extinction for nearly quarter of a CEN
tury except by purchase in the open mar
ket. He quotes one authority to the et-I
feet that the loss to the government by that
transaction was enormous.
After a review of the finances Of Kansas
CITY, Philadelphia, Boston, Chicago ana
Richmond, Mr. Hirst declares that tIie
high price of American municipal secufl-
ties is due partly to the restrictions on Dor
rowing which the states impose
British credit has been injured IN recent
wears according to the author, py policF
begun in 1899 While with one hahd the
Chancellor of the E:lchequer was exiting ulsii-
ing consols with the other he was creating
+arnninable annuities for naval works Be
fore the budget of 1859 the Secretary Iof
War announced that this policy Woulo
likewise be followed in meeting army eA-
nanses. AS a result, he says, consols Ieil
from 10 in March, April and May ISSs' u
10S in June. 106 in July, and loo IN August
The war with the Transvaal, when prohe
ont in October, brought them only 10 NO
More immediate injury, he believes was
done 10 British credit by the financial
DOIiCy which pfecS-tu I4iO NSNA -
+he actual outbreak of hostilitIes
The debt of the German Empire has
risen from 267. 500 600 marks in 1881 to 4,205.-
5o0 600 in 1908 The debt Of the various
states has increased in the mean time
from 5244.3oo. coo TO 1862 400 eco marks Com
munifies with more than ten thousand IN
bahitants have had an increase of from
III SAoCOo 70 5.295. 600 marks. Though
most of the local debts and a great part OF
the state debts are more or less for repro
ductive purposes the imperial dent is con-
sidared bv the author as in the main
dead weight debt.
France has debt larger than that OF
anv other country. Its capital value on
January /, 1905 was 3o.16l.Go,oo0 francs
This is sixteen times that Of the English
debt. Alienation may be looked for from
the reversion of the chief railway lines to
the state between 1850 and 1850
In the article entitled THE Trade Balance
of the United States" an explanation OF
the factors which go to make up coun-
trv's balance of trade prepares the way for
an ANALYSIS of the trade balance of the
United States Mr.. Paish also reviews the
country's gold imports and exports In his
opinion, the monetary strtngency at the
time of harvest could be much relieved by
the establishment of a central institution
OF the nature of the Bank Of England
The volume of a country's trade quickly
adjusts itself 10 the needs Of that country,
and the effect of a sudden disturbing in
fuence to trade the author says, can be
overcome by financial operations in the
great International money markets without
anv excessive drain on the precious metals.
Movements of gold and silver are brought
about not so much by trade balances as
bv the currency and banking needs of the
various countries. IF a country needs gold.
Mr. Paish maintains. II has no difficulty in
buying IT, provided that its CT sGit is good.
The United States Mr.. Path says, re-
quires an annual excess Of exports over inn
ports of nearly $500 coo TO settle her
trade balance.
Although a country in good credit can
obtain, in the opinion Of the author, ali
the gold IL needs. vet the supply at any
given moment is limited, and a country
needing gold must satisfy its needs at the
time that supplies Of gold are available in
the market.
In Great Britain the difficulty is met by
the Bank of England. which makes it it's
special duty to look ahead and TO endeavor
to obtain the gold needed. The success
of the Bank of England's action" he con-
tinues, in maintaining a free market for
gold in London. in protecting the banking
reserves of the United Kingdom in supply
ing the country with currency and in TAX
ing care of the gold requirements of those
countries which look to England for as
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