COMMERCIAL AND INDUSTRIAL ITEMS.

Press, Volume LIII, Issue 9520, 12 September 1896, Page 7

COMMERCIAL AND INDUSTRIAL ITEMS.

CURRENCY TROUBLES IN AMERICA. The New York Banks and exchange houses have once again come to the rescue of the United State.? Treasury gold reserve— this time voluntarily— and have clearly done so in the interests of the country. The evidences are overwhelming that the fears of gold going to a premium have greatly a/lc.ted business in America. Towards the end of July the gold reserve had dropped to £17,200,000, or to £2,800,000 below the recc.gni.ed limit, and gold was steadily being withdrawn for export. Not only was forward business checked because of the doubt, entertained whether such might not result in the payment ot obligations in silver, but two city loans of the highest standing— offered by New York and Brooklyn—failed to attract subscribers owing to the same uncertainty. The New York Banks first unreservedly declared for the gold standard, and proceeded to affirm that the best definition of coin money had been furnished by the ablest bimctallist of the age, Henri (Jer mischi, who said that it was by ihe ordeal of lire that money may be tried, and that the coins whi.h, being melted ilown, retain the entire value for which they were a legal tender before they were melted down, wore good money, while those which did not retain it were not good mone v. Hence, gold would alone fulfil that condition, and the free coinage of silver meant a depreciation of the dollar by nearly 50 per cent. But they did not stop at such declarations. It was decided to support the Treasury until after the Presidential election in November, and they forthwith paid in some £6,000,000 in gold 'into the Treasury in exchange for legal tender note., Boston, Philadelphia, and Chicago joining in the operation. But it was essential to secure success to have the support of the great foreign exchange houses, and this was obtained. Jlradstreets, oi August Ist, says : — "The foreign exchange houses have formed a syndicate to draw, if necessary, 75,000,000d0l in bills of foreign exchange, tho period for which the agreement is to be run being fixed till after the November election. Tiie affairs of the syndicate are to be managed by five of the largest houses, and the various participants "will divide the profits resulting from the syndicate's operations in proportion to the amount of business clone, interest at the rate of 4 percent, being allowed upon the amounts they respectively advance. By this agreement the foreign banking houses put themselves squarely in line with the national Banks, and place their foreign connections and credit at the service of the financial and mercantile communities at a crisis. It is not formally stated, but is, of course, understood that none of the houses interested in this transaction will ship gold during the continuance of the arrangement. A further and very interesting development is reported at 'the close of the week, j indicating that some exceedingly large importing and manufacturing interests, I which arc usually among the principal purchasers .of exchange, have informally given their adherence to the syndicate, and, in order to diminish pressure upon the foreign exchange market, have agreed to carry their transactions abroad upon credits, as far as possible." Thus the exchange houses are prepared to support the position to the extent of £15,000,000, and already, when the mail left America, the position was regarded as less critical, though trade did not then show indications of recovery. Credit had almost everywhere' been shortened, and that of itself meant a material contraction. In few other countries would the people tolerate such" an injurious tampering with their credit and business as the citizens of the United States have put up with at the hands I of Congress.