The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-10-01

Of these except those IN the United
States. They are, however. a source Of
large income.
Great Britain's debt. with the ex-
ception OF This loan. IL all held at home.
and the country IL rich in highly de-
veioped industry and a capable popuia-
ton. The taxes for the support Of the
national Government rest very lightly
upon the great body Of the people.
The French people are industrious.
frugal and thrifty. and have borne
heavy burdens In the past without
'iinching. The war indemnity which In
lsI1 they agreed TO pay to Germany
was 80 great. according to the stand
ards OF that time. that the ACCOM-
plishment was regarded as doubtful. but
It's payment had no noticeable effect
upon the progres OF the country. French
Investments abroad have greatly in
creased since that time. and when
market conditions have become normal
again Will probably be drawn upon for
the means to take up all French oblisa-
tons abroad"
The dangers 10 the country OF in
Nation II continued gold im~portations
had been decided upon instead OF the
loan are described as follows:
"A period OF rising prices is a period
Of debt making. There Is great tempta-
ton to use credit at such a time, and
II requires unusual resolution to enable
a man to pay his debts when opportu-
mites for using money more advantage
ously seem TO aboun
sees Disregard Of warnings.
Even now the very warnings that
are written against imitation are being
ussd to people to buy-buy-
go into things. The average man IL
more interested in the prospect OF a rise
than in the probability OF a collapse
atterward.
1T should b clearly understood that
II IL not the mere presence OF gold in
the country. or the possibilities OF the
gold itself entering the circulation. tina;
Is the source of danger. 1t Is the pos
sible use of this gold as n basis OF
credit that causes apprehension.
The American people will not change
their habits AS TO the money they carry
or their Use OF checks. Gold will not
take the plac. Of pap or silver. 1t
will all GO into bank reserves. where
its potency = multiplied several times
over.
The United States annot absorb into
Its credit system "A large portion Of the
gold which is normally required in Eu-
rope without raising the entire level
OF prices and wages Ia this country.
'Al'A 'A Z ~ NotNAAfh gFE' -
without having its level depressed. The
difference betwec the two levels would
lie so abnormal that 1t could not lie
maintained after the war was over. Al
OF the rest OF the world would be on
the European level and be able TO do
business with Europe only.
Would Leak Gold In Every Pore.
Under such conditions the Cnted
states woul leak gold from every pore.
After the war il over ;he competition
OF Europe will have to he met, and IL
is a mistake 10 expect Europe TO be
hopelessly crippled.
1T is defying all experience to sup
pose that the United States could hold
an undue and dispropor,ionate mount
OF gold under such conditions. Unless
the taiin was raised European prod
ucts would flow into this market and
quickly turn the trade balance, but even
II the tarif was made ~prohibitory upon
competitive imports the outflow Of gold
could not be stopped.
But The merchandise balance Of
trad is not the only thing to be con-
sidered. capital in ,he form II gold
would flow from Il congested market in
the United States to n"edy markets else
where.
Once an outward gold movement was
stared. and the resulting cpntraction Of
credits began. the fictitious and pre-
carious character ~ the whole situation
would he apparent.
This is not prophecy. The United
States u~nauestionably has an opportu-
nifty To improve It's position IN internal
tional trade and finance All the world
expects IL to do SO. But IL this trade
balance which H. thrown into our lap