New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-12-22

iodHs Nouiu ne SldDlc, apart from
monetary oscillations resulting from
political and other events.
Again, if business transactions
throughout the world grew more
quickly than the production OF gold
that is. if the needs OF money exchange
became rapidly greater than the in
crease of currency-there would follow
a stringency Of the standard metal.
Hence a higher rate for loans in ready
money. Commercial dealings are
growing for the simple reason that
interchange throughout the globe is
daily becoming larger in volume in
consequence Of the increasing numbers
of the worlds inhabitants.
Ceaseless development of industrial
and commercial America. both North
and South, is factor TO he considered
Moreover, many countries formerly hi
metallist, or having a silver standard
have since then adopted a uniform gold
basis. Even China will he compelled
TO follow in the wake of civilized ma
tons. Further needs Of gold are,
therefore. TO he expected.
These requirements depend, however
on economic expansion. Gold should
become scarcer at times Of extreme
commercial and industrial activity
whereas when crisis occurs it will
naturally lie more abundant If the
mass Of permanent values in the form
fiduciary circulation should grow more
rapidly than gold currency the pur-
chasing power Of gold will grow in pro-
portion. Then there will be a rise in
the rate of discount and at the same
time a fall in values OF fixed revenue.
Although this theory is logical, the
momentary tension is exceptional. and
the opinion in French financial circles
Is that the present rate OF discount
will not be long maintained. Never
theless. whatever fluctuations may oc-
cur within a year or two the thesis sus-
tanned. for instance. by Edmond Thery
is in the long run right. and it will be
necessary that the world stock OF gold
should grow at the same ratio as the
volume Of movable securities and of
hduciary notes in circulation in order
to avoid formidable money crises in the
future.
The total amount, according TO
French economists, OF gold in circua-
tiOn in the world stood al something
less than S6,0O0.0OO,0oO in 1902 But
last year the monetary stock Of gold
the globe equalled nearly
So. UO. $4,000. thus showing an in
crease Of almost 5000, OOO.ODO. or more
than IS per cent. This is big sum-
but during the same period bank bills
commercial paper and movable values
increased by about SGO,UO, 100000.
According TO these figures, the stock
~ gold in currency represented only
the twenty fourth part of the auGmen-
tation OF credit paper. II all holders Of
credit paper wished 10 turn their paper
securities into money a terrible eco
homie ruin would be the consequence.
But such an event is practically i'm
possible. for no economist ever expects
that the gold reserve Of the globe
should he able 10 cover paper credit
nj one time. Every sound financier
and every expert here believes that
an increase OF the worlds gold stock
should keep pace TO some extent with
the onward march OF credit on paper;
In other words. with that which repre-
sents the largest part Of the fortune Of
the two hemispheres.
Again. IL is wei known that the pro-
iuCtion of gold is everywhere on the
decline through the gradual eXhaus-
lion OF the mines. Even I'm the Trans
,aal the end OF several mines is in
prospect. The profitable opening Of
other mines depends on the inroduc-
ion OF new methods Of extraction. and
Tor some years no new discoveries OF
he precious metal permitting the hope
If a large increase a the worlds stock
nave been reported.