IF MR. BRYAN IS ELECTED ?
'E have always refused to admit that the Presidential election in the United States is a foregone con- clusion, and the vehemence with which the Republican managers are proclaiming their already assured victory does not shake our opinion that even now rex dubia eat. The prodigality with which the Eastern capitalists have subscribed to the " honest-money " campaign fund is accepted by superficial cynicism on this side as in itself a guarantee of Mr. McKinley's election, but we venture to consider that on this occasion the money-power, that is generally supposed to dominate American politics, may have over-reached itself. In one of the ordinary scrambles for the loaves and fishes of office it is likely enough that such lavish expenditure might have carried everything before it, but seeing that on this occasion the election contest is embittered by a revolt against the tyranny of capital, which has been so consistently and heartlessly abused in the United States, we cannot help sus- pecting that the arrogant assurance displayed by those who wield its power will only add fuel to the fiery determination of the ignorant and misguided, but not altogether mistaken, agitators who are working to overthrow it. The rise in wheat, which was to have done Mr. Bryan so much harm by demonstrating the futility of his attributing the low price of farm produce to the fall in silver, is now, we are told, asserted to have been de- liberately brought about by the machinations of British and Eastern " gold-bugs," and when a people's passions have been so much inflamed that they can invent and believe such theories as these, it is obvious that their political actions have passed beyond the tests by which they can, under ordinary circumstances, be calculated. And it is time that we should consider what would be the effect, in the United States and in England, of Mr. Bryan's election.
As to the United States, a very faint and inadequate notion of the cataclysm that would follow such a result may be gathered from the events which came after the t Chicago Convention, although it was ridiculed at the time as an outburst on the part of a few crazy maniacs who were not believed to have half the hold over the rank-and-file of the Democratic party that they have since shown them- selves to possess. Soon after, though we were assured that there was no connection, occurred a sensational collapse of speculation in Chicago involving a single firm with liabilities of four millions stealing, there was something like a scramble for money in the West which reduced the resources of the Eastern banks to a point at which the issue of Clearing-house certificates was almost necessary, and a small premium on gold was quoted as New York. The panic was stayed by the large import's of European gold, which were made possible by the shortness of the world's wheat supply, the rise in cotton,, and the baste with which the Americans sold securities,. metals, cereals, bacon, bicycles—everything, in short, that Europe would buy—while at the same time they seriously- restricted their purchases of goods on this side. Never- theless, since then gold has been steadily but quietly with- drawn for hoarding purposes in spite of the assurances' of the Republicans that the silver craze would be crushed for ever by the result of the election, an& it is impossible to doubt that should these vaticina- tions prove to be incorrect, there will be a wild panic ending in a dislocation of credit that will jeopardise the very existence of half the financial institutions of the- -United States. It will be a, panic which will exceed any that have gone before it, just as the United States, territory exceeds that of Great Britain in size. It is needless to point out that one of the first results would be the total depletion of the Treasury's gold reserve, and an end to the nation's ability to pay its obligations in gold: and maintain all dollars, gold, silver, and paper, at parity. Whether such a panic would be justified is another question. It is likely enough that Mr. Bryan's election would rouse the enthusiasm of the Silverites sufficiently to gain for them the control of Congress, but- it must be remembered that it would be a long time before any definite action could be taken, and that this breathing- space might bring a reaction with it. Such a possibility,. however, would no more check the panic than a paper fence would stop a herd of stampeding cattle, and it must be confessed that it is exceedingly remote, and that the- ultimate result of Mr. Bryan's election would more- probably shape itself in the direction of civil war.
With regard to the possible result in England, it is satisfactory to note that speculators here have left, American railroad shares severely alone for some time past, disgusted with endless assessments, reorganisations,. and other costly results of mismanagement and question- able finance. Encouraged by the Republican cocksure- ness, a few operators may have lately committed them- selves in the gambling counters of the " Yankee " market,. but these were mostly professional gamblers, and the out- side public has practically taken no hand in the deal. As far as speculation is concerned, the terrible collapse in the- prices of American securities that would follow Mr.. Bryan's election need not be expected to cause serious, mischief, as the speculative account open is exceedingly light. But when we turn to consider the position of the investor, the man who has bought and paid for the best- secured bonds of the American railroads, or has lent money on mortgage in the States and relies on his interest for part of his income, the case is very different.. It is impossible to make a definite estimate of the amount of the British capital invested in America it is a constantly shifting quantity, and any statement as to its dimensions must be received with extreme. caution. Mr. Moreton Frewen, however, who generally knows what he is talking about, wrote, in an article ow American politics in the National Review of last January,. of "the vast 'tribute' which America pays to England,. nearly a million gold dollars daily, the required excess. of exports over imports." Let us give Mr. Ftewen's "nearly" a wide application and account for subsequent withdrawals of British capital by lowering his million" to three-quarters ; three-quarters of a million dollars are £150,000 sterling. Multiplying this daily amount by 365, we come to 544 millions sterling as the annual amount. of interest due from the United States to this country.. Taking 5 per cent. as the average rate of interest, we find, that to earn this sum British investors must have sunk some £1,100,000,000 on the other side of the Atlantic,— that is, in a country where the fabric of credit is in some danger of being completely overturned. We must again insist on very great caution in) accepting these figures, but it is idle to deny that the consequences that would ensue if any such suns became for the time being an unrealisable asset, would be exceedingly grave, and would severely test the foundations on which our credit system is based. We, have every confidence in that system, and are convince& that the City might be relied on to keep its head and wait.
until the position in the United States cleared. For even if the very worst came to pass, if silver were established as the standard money of the Republic, and all obligations to pay in gold were repudiated, American bonds would be saleable ultimately, at a price. But it is evident that if anything like hysteria were to be developed in London, and gossip began to circulate concerning the extent to which such and such a firm was involved in American bonds, or such and such a bank had advanced upon them, it would require all the tact and skill of the able men who rule in our financial world to avert a very uncomfortable crisis. Luckily the City is, on the whole, in a strong position, and well able to cope with any emergency. Speculation in all markets has been reduced to a very narrow limit, chiefly owing to the timely warning given by the directors of the Bank of England when they raised their official rate early in September. Since then we have, nevertheless, lost a considerable amount of gold, but the position has been very greatly strengthened by the reduction in speculation of all kinds. But it cannot be too strongly urged that those who are responsible for the smooth working of our financial machine should bring all their knowledge and experience to bear on the question of the possible consequences of Mr. Bryan's election to the Presidency of the United States. They are much too certain that no such calamity can possibly occur.
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