NOTES AND MEMORANDA 59d. per oz. The issue of Treasury notes in payment of silver began in the middle of August, 1890, yet from that time until the very end of December the American money market was convulsed everywhere North, South, East, and West. Men of business complained that they could not get accommodation from their bankers on reasonable terms, and the public cried out that neither coin nor notes were procurable. In New York members of the Stock Exchange were frequently charged rates ranging from 50 to 80 per cent. per annum, and occasionally as much as 180 per cent. per annum was demanded and paid. Many causes, no doubt, combined to bring about this disturbance the Baring crisis in London, over-purchases of goods induced by the passage of the McKinley Act, reckless speculation in lands and houses, and a serious lock-up of capital in unsaleable railroad securities. But though the Silver Act was only one of many disturbing causes, it exercised a very great influence, for it inspired a fear amongst capitalists that gold would be driven out of circulation, and that, as soon as this was realised by the public there would be a disastrous panic. When the promoters of the law of July saw that that measure had failed to ensure an easy money market, they began to agitate for- free coinage. By so doing they added to the alarm of capitalists, and, until the Free Coinage Bill was thrown out early in 1891, the crisis. did not come to an end. Since then, it is true, the American money market has been easy, but that is a consequence, not of the silver purchases by the Treasury, but of the crisis of twelve months ago, which depressed trade, and for a considerable time paralysed specula- tion. The demand for banking accommodation was thereby so much reduced that the supply at the disposal of bankers has until now exceeded the demand. There seems good ground for saying that the abundant crops in America and the bad crops in Europe in the past year have for the time being saved New York from a severe panic. Following upon the confusion in the money market referred to above, gold to the amount of about 15 millions sterling was shipped to Europe in the first half of the year. European capitalists who had been employing large sums. in the United States, partly because of the fear inspired by the silver legislation, and partly because of the Baring crisis and the alarm it left behind it in Europe, called home their money. At the same time the saving classes in Europe either ceased to invest altogether for the time being, or confined their investments to the very best home securities. Thus not only was the flow of European capital into the United States, which has been so marked a characteristic of the past half century, stopped for the moment, but even capital employed there was with- drawn. In normal times that would have been likely to increase the uneasiness that already existed, and possibly might have sent gold to a premium. But Americans were saved from alarm by the failure of the crops in Europe and the abundance of the crops at home. They argued ?ustly that they would be able to export such immense quantities of
