THE Wairarapa Age MORNING DAILY. FRIDAY, JULY 3, 1908. AMERICA'S FINANCIAL CRISIS

Wairarapa Age, Volume XXXI, Issue 9132, 3 July 1908, Page 4

THE Wairarapa Age MORNING DAILY. FRIDAY, JULY 3, 1908. AMERICA'S FINANCIAL CRISIS

The effects of the late financial crisis in America is to be seen in the deficit of revenue published the other day, when there was a total deficit for the last year of twelve million pounds, as against the 16* million surplus of the previous year. If the crisis has been disastrous to America, it has had the result of inducing others besides the Government of that country to enquire into its financial methods. A writer in the "Mercantile Gazette" draws attention to the fact that "the bankers of Great Britain are studying the subject of increasing their gold reserves in order to better withstand the strain of panic demands from other centres, to which, as the only free market for gold, London is peculiarly exposed. The movement in the United Kingdom is likely to be extremely deliberate, as is customary with the British nation, bu*'. force of public opinion, will probably compel the desired reforms. The German Government has appointed a Banking Commission composed of 23 members representing various shades ;

of opinion on financial and banking questions. The concession of the Reichsbank must be renewed by legislation within a year, and it was considered desirable to collect and sift beforehand the opinions of the best experts as to what changes should be made in its organisation and practice. The period of stringency and dear money through which the Empire has been passing has given occasion for many attacks on the discount policy of the Bank. The critics have been mostly men who were who were formerly his metallists, and are still haunted by the fancy that a central bank can effectively counteract the dearness of money, can arbitrarily keep down the rates of interets. and at the same time, with equal arbitrariness, prevent the export of gold. Dr. Koch, the president of the Reichsbank, has sturdily opposed all the artificial proposals put forth by the critics for making money cheap through mere technical banking remedies. All intelligert German bankers agree that what Germany is now suffering from is a scarcity of capital, not a mere lack of currency, and that the remedy lies in curtailing the demands for capital until new resources can he created. The critics demand that the capital of the bank be increased, that ' the . margin of uncovered and untaxed notes be raised, and that the Bank adopt the policy of charging a premium on gold for exports. All these questions are to be investigated by the Commission, which will also inquire int> the means by which the Reichsbank might draw gold from abroad and prevent its export. Its discount policy operations in b.lls of exchange and interest —free advances on tfold to be imported are all referred to as subjects to be discussed. The inquiry is likely to absorb several months as about 200 persons are to be examined."