New-York tribune., 1919-01-09

cial activities" This apparently can
only mean that the Federal Reserve
system, which has already contrib
uted nearly two billions to the pre-
vailing expansion Of bank credits,
is to be employed for still further
increase.
If the plans of the British govern
ment and the proposals of the Fed
eral Reserve Board are an indica-
ton, gold will never again be free
ly used for ordinary payments. 1t
has now practically disappeared. Its
future use apparently will be simply
as a reserve against so-called
"iduciary issues"--in plain words,
paper money and bank notes. and
for the support of bank credits
1t is announced that bank with
British capital will be established in
Mexico, to finance and support Brit
ish industrial interests in that coun-
try. This raises big problem. The
United States is far more heavily
interested in Mexico than is Eng
land or any other country. Perhaps
for just this reason, and because Of
our proximity and bigness, there is
deep-seated jealousy in Mexico tow
ard this country. That may have
been one of the reasons why Ger
many before and during the war was
able to form something of a work
ing alliance with the Mexican gov
ernment. Mexico would have liked
a powerful friend to help hold the
giant at her north at bay Ger
many's downfall may be our oppor-
tunity to establish a new era of
clearer understanding and better
feeling
The Mexican problem presents
one curious difficulty Mexico has
a profound respect for England's
power and Germany's fighting
strength. There is a deep rooted
feeling all over the country that the
people of the United States are not
fighters, and, literally, have not the
courage. They have been quite un-
afraid of any American threats,
thinking them mere bluster. The
average Mexican thinks himself far
braver This is a real barrier to
closer trade relations between the
two countries. At the present time
the leaders in Mexico do not believe
that this country will protect Amer
lean oil and copper interests in that
country against the proposed con-
fiscatory legislation.
Computations have been made
that Wall Street loans are now, un-
der the Money Committees restric-
tions, very near the lowest levels.
For a great many houses September
16, the base date of the present re-
strictions, was low ebb. In times
of active markets loans have fire.
quently been much more than double
those at the present time. This fact
may have large weight in the course
of the years stock markets.
Some of the ablest engineers and
experts in the oil field believe that
the most promising developments
may come from Asia Minor. 1t is in
teresting to know that Palestine
itself is now being prospected for
drilling. A British company, in
which the British government itself
Is interested by actual investment,
has concession which covers a
large part Of Asia Minor eastward.
Russia and North America NAV vet
find great rival here.
! If in the four years of war the
cost of living in this country rose
only about 65 to 70 per cent, as a
recent report estimates, it seems
scarcely probable that the nations
income more than doubled, as some
statisticians believe. That would
imply perfectly enormous surplus
Of savings. Savings banks deposits,
the output of new securities and the
like do not indicate such surplus.
Some wakeful prophets are pre-
dieting an epidemic of great bank
mergers in this city and country,
such as has been perturbing Eng
land in the last year or so. But
cooler heads agree that this is no
time for huge combinations Of cap.
~ fSI