THE CRISIS IN THE UNITED STATES.

Otago Witness, Issue 1851, 17 August 1893, Page 16

THE CRISIS IN THE UNITED STATES.

From the beginning of May to the 2nd of June there were 101 banking failures in the United States, and our telegraphic columns I (says the Argus) have still reported many more, ■ making a total of between 200 and 300. I Nearly all these failures are those of what 'are known as "National" banks, which are conducted under Government inspection. It. is true that they are mostly small, with paid-up capital ranging from £10,000 to £200,000,, but numbers tell, and the aggregate amount involved is large. The j unrest is by no means over, and the fact cannot be ignored that America^ is passing through a crisis which may at any time degenerate into a panic. The disturbance is widespread, for the failures have occurred >in more than 30 States. In' so vast a territory as that of the United States, with some 66 millions of people engaged principally in occupations founded on the natural conditions of a new country full of mineral wealth of every form and capable of yielding agricultural productions in enormous variety, the causes of a crisis may easily be numerous and complex. If the inability of a large number of tho suspended National banks to realise the collateral security which consists in titles of landed property be contemplated, _then a real estate crisis exists. The powerlessness of the banks to support to an indefinite extent owners of grain who are averse to accepting the low prices current and desire to hold tor a rise in the market suggests a crisis arising from the failure of an insidious form of speculation. Yefc again, persistently low prices for produce are impoverishing the American farmers, making their mortgage indebtedness more onerous and reducing the value of their land. Hence the crisis is partly agricultural. Then there are the uncertainties' surrounding the silver question, the closing of numerous small mines, and the general disorganisation of the •silvermining industry, and the result is a silver crisis. Allied to the silver question is the future of the American currency. For many years Bilver in the shape of the " dollar of the daddies," as with filial reverence it is still called by the native American, was virtually the metallic standard of the United States, but for the last 20 years gold has taken its place. Yet in putting into effect the silver policy of the country the Treasury haß piled up enormous acenmulations of the white metal. As the statutory quantity of silver is bought monthly by silver certificates, those certificates, being payable either in gold or silver coin, are exchanged for gold, which is exported. Gold for a long time past has been flowing out of the country, and the Treasury, to meet the drain, has been steadily exhausting tho sub-treasuries throughout the Union— without, however, being able to maintain the gold reserve required by law. Thus, from a very important point o£ view, the American disturbance is a currency crisis. Tho survey is not yet exhausted, for when, on the one hand, the great increase in

the importation of manufactures, despite the M'Kinley tariff, and the decrease in the exportation of raw materials (bhe imporbs of bhe United Sbabes from July 1, 1892, bo April 30, 1893, showed an increase of £20,000,000 as compared with bhe corresponding period of 1891-92, the exports falling off by £36,000,000, the shifting of the brade balance being from excess exports £42,000,000 to excess imports £14,000,000), and on the other hand the breakdown of some of bhe great "industrial trusts" are baken inbo account, the disorder looks like a mercantile crisis.