twenty-four hours whether an extreme panic or confidence should prevail; and so close was the call that weeks were required to wipe away the feeling of uncertainty induced by being suddenly brought face to face with a great peril.

Yet the events of 1895 had been predicted for nearly twenty-five years, and prudent managers had sought to discount the effects as best they could, while the larger number, hoping the crisis was distant, looked at the contingency in a speculative view, and counted upon their own escape when it should come. We might date the beginning of this depressing influence with the panic of 1873; for it was to the conditions then emphasized that the country owes the periodic recurrence of currency agitation and experiment. First, the greenback craze had to be met and voted down. Success in this was immediately followed by the inauguration of a policy which was intended to be a concession to the cheap money advocates-the limited purchase and coinage of silver. It required all of fifteen years to demonstrate the danger of that compromise. It has been a long and slow process of currency depletion since the passage of the act of 1879, in which the volume of the currency has been greatly increased and its quality continually brought near the line of debasement. Such a situation in itself had led to a feeling of uncertainty, and the growing unrest was aggravated by the pressure of "bad times." The failure of the Barings, the commercial and industrial depression, the Australian banking crisis, and the currency "panic" of 1893 in the United States, each contributed to induce caution and enforce contraction in every direction.

GOLD AND THE FEDERAL TREASURY.

In 1894-'95 public attention was fixed upon the movement in the gold held by the national treasury, as this gold was an obvious and measurable factor in determining the status of that important but imponderable element, "confidence." This stock of gold had slowly accumulated in anticipation of and subsequent to resumption from $128,460,203 (June, 1878) to $332,351,306 in September, 1888-the highest figures ever touched. Since that time the drain of gold from the Treasury began, at first slow and somewhat uncertain, but after the silver law of 1890, it increased in volume and certainty. In October, 1890, the total stock had fallen below $300,000,000; in May, 1893, below $200,000,000, and for the first time since the resumption of specie payments the reserve of $100,000,000 held against the greenback circulation was impaired. From January, 1892, to June, 1893, there was a steady export of gold in excess of imports. In the fiscal year 1893 (July 1, 1892-June 30th, 1893) this excess was $87,506,463, a sum sufficient to account for the Treasury loss, and also sufficient to prove that any demand for export eventually fell almost entirely upon the Treasury holdings. The crisis of 1893 came, and gold was imported, not in obedience to natural conditions but under "panic" demands, because it was needed at any price, and was bought or borrowed as a commodity rather than in settlement of any commercial exchanges. For ten months the "balance" of gold was thus held in favor of the United States, but a sharp reaction occurred in May, 1894, and from that time the amount exported has greatly exceeded the amount imported.

FREE GOLD EXHAUSTED.

At the end of April, 1894, the Treasury held no more free gold than was needed to constitute the reserve-$100,202,008, a margin so narrow as to leave nothing to meet the expected, because natural, exports of gold of the summer. For nearly seven months the rate of exchange on London, the most sensitive gauge of financial condition, had been rising, and in that time had fully recovered from that extreme plunge taken by reason of the crisis of June, 1893. Slowly but surely the rates had risen from an importing point to one that permitted exports of gold, and in April the outward flow was initiated in earnest, but not in such a volume as to awaken anxiety. An export of $11,700,000 had been equaled and exceeded in previous years, and the summer movement was inevitable. The trade figures did not appear to demand a large export, for the value of exports of merchandise since June, 1893, had exceeded the value of imports by nearly $240,000,000. In May nearly a million dollars of gold was sent abroad each day, but even this unusually large amount created no more than a passing apprehen

sion, mitigated by a hope of a turn in the flow, and not until the movement of June became felt was the money market disturbed. The end of May left the Treasury reserve at $78,700,000; the end of June at $64,873,000; but neither amount reflected the total gold withdrawn from the Treasury. What added to the dangerous possibilities of the situation, the rate of exchange on London ruled high.

The conditions at home thus suddenly pointed to an untimely and extraordinary demand for gold for export. Abroad there were certain elements to be considered as exerting an influence in attracting gold, but these should have been of little weight. The leading money markets were stagnant and in a chronic state of over-supply. The Bank of England held its rate of discount at two per cent. unchanged since February ; yet, in spite of this low rate, gold continued to flow into its coffers until September, when the holdings had risen to the "unprecedented" total of nearly £39,000,000, and the reserve was £31,300,000, or higher than ever before. Such a "glut" was succeeded by a drain of the metal to the interior and to the Continent, and in three months-from the end of September to January, 1895, the bank lost more than £6,540,000. As soon as the regular interior movement had ceased, and the Continental demand was satisfied, the accumulation recommenced, and by June, 1895, had more than regained the figures of June, 1894.

CONDITIONS IN EUROPE.

In France the policy of accumulating gold has gone on apace through two years, and more than 250,000,000 francs were added to the holding of the Bank of France. This accumulation is all the more remarkable in that it implies a sacrifice on the part of the bank.

“The task of accumulating a large war reserve of gold which the Bank has voluntarily undertaken, and which has been facilitated by the favorable London Exchange, entails a heavy burden on the Bank in payment of a duty on the note circulation representing the gold reserve. With a note issue of 3,476,000,000 francs to-day, the active circulation or portion producing a profit-discounts and loans on securitieswas only 700,000,000. The Bank is not permitted to compound for the tax on the note issue, but pays one-half per thousand on the active or profit-giving circulation, and one-fifth per thousand on the rest. The Bank consequently derives no benefit from the surplus cash, and has to bear the cost of finding the notes as well as to pay duty on them, and this burden goes on increasing with the increase in the gold hoarded.”1

Another circumstance worthy of notice is the situation in Germany. If any money market has in the past been infected with political principles it was the German Bourse in the eighties. When Russia wished to add to her debt, it was through German agents her bonds were floated, to be held, as a rule, in German hands. In 1887 Bismarck issued his remarkable order practically forbidding the negotiation of Russian securities on the German markets-an interference based entirely on political reasons, and entirely indefensible upon economic or financial grounds. This measure was followed by duties on and legislative control of bourse operations which were not onerous in themselves, but acted as restrictions on speculative sales and purchases, such as arbitrage transactions, of high utility in any market. A very large share of ordinary business was by this regulation driven to other markets-Brussels, London and Pariswhere the same restrictions did not exist. Further, the prohibition of business for political reasons led to heavy investments of German capital in other and less desirable lines of securities-Argentine, Brazilian, Greek, Portuguese and even Mexican stocks. The same result followed as had followed the ventures of English capitalists in such risks, and Prof. Schmoller places the losses to German investors in recent years at 800,000,000 marks ($190,400,000). As it is, the yearly returns to Germany from foreign investments are estimated to be between 500 and 600 millions of marks on a capital of from 10 to 13 millard of marks.

In the face of such losses there has been as marked accumulation of gold in the Bank of Germany as in the Bank of France, and Germany has received more American 1 Economist, 8 December, 1894.

gold than either France or the United Kingdom since June, 1893. In two years the gold in the bank has fluctuated in amount, falling to the lowest point in October, 1893 ($179,997,200), and rising to $267,000,000 in February, 1895. The gain has been $89,000,000, of which $65,000,000 net was obtained from the United States-an unusually heavy movement. From 1880 to 1888 the movement of gold was from Germany to the United States, resulting in a net gain to the United States of $69,000,000 in gold; but since 1889 the flow has been from the United States to Germany, and has given $103,000, 000 to that country alone or what was needed to meet the demands of its banks. It will be seen from a table appended that Germany was the most important receiver of the gold that was taken from the Treasury in the summer of 1894. Nor did this satisfy her needs. In 1894 further sums of gold were imported, $24,728,000 from Russia, $19,682,000 from the United Kingdom, and $6,420,000 from France. The aggregate for 1894 was more than double that for 1893, and against the $78,000,000 imported were set only $12,700,000 of export.

THE NATIONAL SCRAMBLE FOR GOLD.

For some years a number of nations have been looking for gold with which to replace an irredeemable paper currency, or, what was an equally disturbing commercial factor, a depreciating silver coinage. This has in part been the "scramble " for gold which is so often mentioned as an extreme danger. When the United States resumed specie payments in 1879, hardly a ripple of movement was occasioned, and that had been the experience at the end of previous suspensions-as in 1817. When Italy and Austria determined-the one to throw off a paper money and the other to adopt a gold standard-a commercial transaction in gold occurred. Agreements were made with syndicates of bankers to supply a certain quantity of gold. This metal was moved, not in accordance with a true or natural condition of exchanges which demanded such a movement, but in obedience to an artificial need. Nothing but gold would suffice; bonds, bills, notes or merchandise would not settle the demand. The middle of 1894 found Austria still in the market for gold, although the imports had been heavy since 1890. The Austro-Hungarian bank had more than doubled its store of gold in 1892, and in December of that year touched the highest point-$58,828,300. Between that date and May, 1894, the gold was reduced to $50,000,000. Upwards of 76.000,000 florins in gold were required, and accordingly an agreement was made with the Rothschild syndicate. Whether such a demand could make itself appreciably felt in the United States can hardly be proved; but it must have had an indirect influence, and it is in the United States that gold has been most readily obtained. The accumulations in Russia have also been drawn upon by other nations, but show no such diminution as has fallen upon the United States.

INFLUX AND EFFLUX OF GOLD IN BANK OF ENGLAND.

Throughout Europe, on this showing, there was only one immediate demand for gold, and that was so small in amount as to have exerted no lasting if even a temporary pressure on the market. The exports from the United States in a single month would have met and satisfied it. The leading free market for gold in the world is London, and thither flow each week the supplies from Africa, Australia, Egypt and Continental Europe, and thence are sent supplies to South America, the East and the Cape, where gold is used in balances. The influx or efflux of gold in the Bank of England is the best gauge of the demand for or supply of available gold. The movement for the year