People's Pilot, Volume 4, Number 5, Rensselaer, Jasper County, 20 July 1894 — GOLD IN SUPERFLUITY. [ARTICLE]

GOLD IN SUPERFLUITY.

Thi Great Piles of Money That Are Lying Unused In English Banks. Gold-gluts calculated to make one’s mouth water have been known to exist before, but never to the extent of the present one. It is a dream of Mida s. The metal is piled up everywhcre, useless—except just when it is wanted. The Old Lady of Threadneedle street has thirty-five millions sterling in her pocket, and looks back upon last year, when she was making more profit, in spite of the irregularities of her officers, with twenty-eight millions. Monetarily the world is at a standstill. It is the calm after the storm, the storm being the financial crisis of three years ago. Once the Barings were willing to ship all our surplus cash to Argentina, to enable the Spanish-Americans to revel in luxury; the continent, too, was encouraged to look upon Great Britain as a kind of loan office; whilst, indulgent parents that we were,our Australian children had our savings showered upon them that their unemployed might construct useless railways and undertake superflous public works. Now all this is changed; Argentina is pretending to try to pay us back, and has donned the white sheet of repentance and economy; the countries of the continent turn rather to each other than to us for help in the financial straits in which most of them are. wallowing, and as to Australia, she is endeavoring to resuscitate her banks and to retrench. In fact, our debtors in the colonies and abroad are not in a position to ask for money, and we have no inclination to supply them with it. At home the bogus company promoter is being held at bay in a manner he never experienced before, while legitimate trade is not in such an active condition as to make much demand upon the pile of gold which is growing up and has already reached such gigantic proportions. But this is generalizing. How will the glut affect each individual investor, to whom it is of little importance that there is too much gold, if he is so dissatisfied in his share as to want to make a little more? The answer is simple. Although it has been delayed, and hope deferred has made the heart sick, it is beyond the bounds of doubt that a recovery in those securities which are now under a cloud of depression must .sooner or later come. The stream of gold, which is now dammed up, will break the barrier and will overflow into those channels which are now parched and dry. It is an unfortunate time for him who seeks absolute safety in his investments, for all absolutely safe securities are too high in value, from consols downwards. The policy is to spread one’s money over a fairly wide area of those securities which are now neglected because they are not absolutely safe, but which will sooner or later be buoyed up by the overflowing of gold into their channels. There are some bargains to be picked up out of the beaten track, amongst, for instance, the lit-tle-heard-of prior securities of some industrial concerns. A glance through the stock exchange list will show many which are yielding a rate of interest quite high enough, even considering the risk which attaches to such securities.

Within a short two or three weeks, we who hold railway stock will be on the tiptoe of expectaton as to our dividends. There is more to fear than to hope. Most of the railways show some increase in their traffic receipts this half-year, but this is due more to the conveyance of goods than of passengers. which interpreted means that working expenses will be higher. Every extra ton of goods that is carried brings with it its own expense, whereas a full passenger train costs no more to run than an empty one. This being so, net receipts will be very little larger than at this time last year; and taking into consideration the growth of capital charges, there is not a single individual line of which it can be prophesied that the dividend will be greater than a year ago. Great Westerns and Sheffields will probably show up the best of a poor lot. But it will be a struggle all round to maintain dividends, and some of the lines will prove unequal to the struggle.—Pall Mali Budget.