New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-09-30

tons, especially those Of Great
Britain, shall be paid in gold, and to
refuse to pay them in gold would be
dishonest, provided such payment
were possible. But" says "The
Statist," "the old proverb applies in
regard to gold just as much as in
regard to anything else. Necessity
has no laws. If a contract cannot be
maintained there is no option but to
let it go by the board
The article then proceeds to indi-
cate the causes which, if they con-
tinued, would make it impossible for
Great Britain to continue gold pay
ments. The cost Of the war has ex-
ceeded anything that could have been
imagined. Nearly the whole strain
of financing the Allies side Of it has
fallen upon England, and the cost is
over five million pounds sterling
every day, Sundays and holidays not
excepted. The other eight countries
Of the Entente Alliance suspended
gold payments at the beginning Of
the war. AS for Great Britain:
To meet an outlay on this gigantic
scale our government has not only
borrowed at home very large sums
but it has borrowed in New YORK
likewise. To do so, it has found 1t
necessary TO pledge collateral secu-
rifles, and at the present moment It
is asking its subjects to either sell
to il or to lend 10 IT such securities
as have a fairly good market IN New
York. of course intending to raise
there a further loan. All this is done
to provide the means of paying gold
for the purchases made. And yet
everybody knows at home and abroad
that the quantity of gold in the world
is not sufficient to pay for all the
commodities of every kind that the
various belligerent countries require.
In all experience, "The Statist"
goes on to say, long war has led
to suspension Of specie payments.
The question for the English people
to decide is this:
Ought we to do as we did
in the great war against revolution
airy France, suspend specie payments,
or ought we show that we are rlch
enough and ingenious enough to do
what no other nation ever has done
hitherto, and 90 on paying in gold
till peace returns? The answer, we
take il, TO the question is, THAT de
ponds upon the length of the war.
If the great general stats of all the
Entente Allies can reasonably assure
the British government that the war
will not last much more than, say
six or eight months, the government
clearly ought to exhaust its lngenu-
ity before suspending specie pay
ments. On the other hand If there
are reasonable grounds for thinking
that the war will last throughout
next year, and possibly longer, Il
seems safe 10 predict that specie
payments cannot be maintained 70
the end.
Well, then, as to the consequences
Of a thing which in the course of
events becomes inevitable:
If any reader asks, granting that
all honorable persons desire to fulfil
their contracts in the spirit as well
as in the letter, and, granting
further, that common sense dictates
that after certain time If expert
ence convinces us that specie pay
ments cannot be maintained, will
very grave and injurious consc-
quences follow? The consequences
will be simply that British credit will
decline; that the value of the pound
will not remain what it has been;
that it will fall. In plain English, If
we cannot pay in gold we shall have
to paw in either Bank of England
notes or in government notes, or IN
some kind of undertaking by the gov
eminent that the payments shall be
met. II that were to happen, the
Bank of England note or the govern
ment note would not rank as high as
the sovereign, and, consequently, the
prices of everything we should buy
abroad would rise. The real eco
nomic difference, then, between main
tanning specie payments and suspend
ing them is that there will be gen
eral rise in the price of everything
we buy abroad, and naturally prices
at home will follow. The cost of the
war, then, will be increased. But
there the injury will stop. II may be
said we shall have broken our con-
tracts. But if we are compelled to
do so, the world will see we have
done it not through dishonesty, but
under compulsion, and the world
knows that the British Empire is
rich enough and powerful enough to
resume specie payments very soon
after peace returns. Recollect that
about two-thirds Of the whole gold
supply of the world comes from
mines within the British Empire.
Therefore, we have the means Of re-
Stunning specie payments If we are
forced TO suspend them. But whether
We shall be forced depends entirely
upon the length of time the war
lasts. There is not enough of gold in
the world TO go round when eXpen-
diture is on the gigantic scale of the
present time.
1t is very sane article. That its
implications are uncomfortable, es-
pecially to creditors who hold the
gold obligations, is a fact that lies
not in the point Of view but in the
nature of the case. What would it
profit a country to sustain its gold
credit and lose the war? Questions
Of financial solvency are in the high
est sense irrelevant. The belligerent
nations having committed themselves
perforce TO a policy Of unlimited liza
D hilify on account of the war defeat