The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-05-04
THE EXPORT OF GOLD.
The Mechanical Operations of Gold
Shipment.
From the New York Independent

From the New York independent
When a foreign banking house an
nOunces that it will ship Sl,0OO. 900 in gold
10 Europe the mechanical operation of
making the shipment is interesting. The
house reaches its conclusion to ship after
finding that it has sold its own bills
of credii to importers of goods to
such an extent that it cannot buy enough
bills from exporters of merchandise, etc,
to cover the amount paid out by it to the
importers.
At the present time a banking house
win pay exporters of merchandise as high
as - 80 to the pound sterling for a demand
bill OF exchange on London, but to pay
any higher price is not as profitable as to
ship sold. That condition exists at the
present time. Not being able to get the
bills wanted at a 50 to the pound sterl-
ing, the house decides to ship gold
The questions to be decided now are
how to get the gold, and how to get it to
its destination securely. First of all, the
house sends its manager to its bank, and
informs it of the contemplated shipment
of gold, so as TO prepare it for so large
payment, The house then deposits with
the bank checks to the amount of 81 000.-
900, which it has received from importers
in the transaction of business over the
the clearing house for collection. The
clearing house collects the money from
the different banks upon which the checks
are drawn.
Ii is important to notice that the money
which the clearing house takes at the
present time from banks is principally
greenbacks, gold certificates, treasury
notes of 1890 and national bank notes
There is more or less discrimination
against silver certificates, because these
are not legal tenders.
The bank which is to furnish the money
for the exporter of gold notifies the clear
ing house to pay it such bills as win be
received by the sub-treasury in exchange
for gold. The bank adopts this means
of getting the gold for its customer rather
than to give it directly from its vaults
At the present time the bank in question
wants gold certificates and legal tenders,
because this form of currency is the
surest to get the gold from the sub-treas-
ury, owing to the fact that the govern
ment stock of gold is reduced to point
where more or less discrimination must
be exercised in regard to the different
forms of currency taken In exchange for
gold
The clearing house. in answer to the
banks request, tries to accommodate it
with the currency it wants, but cannot
go beyond a certain. point in favoring it
because all the other banks in the clear
ing house may desire equal aCcOmmOda-
tions. although this at present is not
strictly the case AT any rate, the bank
gets large proportion of greenbacks, say
go per cent, the balance being given in
treasury notes Of 1890, and perhaps very
few gold certificates.
After the bank has received this money
from the clearing house it notifies its Gus
toner the foreign banking house, that it
has the money on hand subject to its
order The house then sends it's clerk to
the bank with an attendant and large
valise, and gets from the bank the million
dollars in the forms of currency Indicated.
This clerk and his attendant return with
this money to their house, where it is re-
counted. Afterward the manager of the
house, with an attendant as a safeguard,
takes this money in a valise to the sub
treas ury and presents it to the cashier,
stating that it is his wish to get 81 ,000. 900
in gold coin in exchange for this paper
money for export.
The cashier of the sub-treasury receives
the money, and again it is
counted. The cashier on finding the
counting correct looks over the
different kinds of gold coin in store
and gives the house certain proportion
of double eagles, eagles and half eagles
according to the amount of each kind
held by the subtreasury. The house must
know approximately, before it decides to
ship, just what kinds of coin will be
given, because the smaller the coin the
greater the abrasion in handling it, and
that must be taken into account in esti-
mating the expense.
Therefore, while the employees at the
sub-treasury are counting the money de-
posted by the house, the manager of the
house receives from the cashier of the
sub-treasury an exact statement of the
kinds of gold he can give and what he can
do in preparing it for shipment. Assum-
ing that the estimated loss from probable
abrasion and expense of packing, etc,
can be afforded, the house orders s., 0OO,-
900 of the coins to be put up for shipment
The sub-treasury then puts the gold coin
in canvas bags, each holding s. 900, and
puts these bags in kegs, each keg contain
ing $50, 900, and each keg tightly fastened.
For this of course, the sub-treasury makes
a small charge.
When the kegs are ready the house
sends duly authorized draymau to take
the gold to the steamer. During this
time also the house ConSultS the
insurance company about insuring
the gold while on passage The
whole time occupied from the point of de-
Gliding to ship to the actual placingof the
gold on board the steamer is about forty
hours sometimes more, sometimes less,
according to the trouble involved in get
ting the proper currency from the bank,
and the difficulties attending getting the
gold from the sub-treasury. The various
expenses of insurance, carriage, packing
and freight amount to about one-quarter
of one per cent.
While these details may seem insignifi-
can't and very mechanical, there is never
theless at each step an important risk in
volved, and the greatest care must be ex-
ercised in counting and calculating, and
great confidence must be reposed in those
to whom the task of executing these de-
tails is given.
OF course, the main point in gold ship
ment is to determine the principal factors
in the first place which will make the
probable shipment profitable one. These
lie outside of these mechanical operations
already enumerated. These factors in
clude on gold shipment to London. the
rate of sterling exchange here, the dis
count rate in London. the money rate
here, and the weight of the gold The
money rates are also important, because
of the time the honses must be without
the money while it is on the ocean.
At present the gold shipped goes to
Bremen, and from there to Vienna In
this transaction not only the rate of
sterling exchange on London must be
known here, but also in Paris, Vienna and