St. Paul daily globe., 1895-02-10
WHY GOLD is. EXPORTED.

1t is only since the, panic Of 9S
that attention has been drawn
strongly to the exportation- Of gold
Prior to that time gold came ana
went unnoticed, performing its func-
ton of trimming the ship of COM
merce and keeping it=upon an even
keel. The movement out and in, the
ebb and flow Of the golden tide, had
been SO long coincident with the
movement of crops outwards and
merchandise in, that the ebb was ex-
pected to follow the period OIL
heaviest importations and the How
that of the period of export OF our
staples Unnoticed before, these move
ments of gold have become matter
of public concern. Business men
take alarm when the morning pa
pers announce that more or less
millions of gold have been with
drawn from the treasury for ship
ment abroad.
Various are the theories and con-
lectures given to account for this
unusual movement, which disre-
CARDS what has become to be con-
sidered the customary movements
Of the metal. Mr.. Heidelbach, of the
banking firm of Heidelbach, 1ckel-
heimer & Co., who have been
largely concerned with the shipment
of gold, both out and in, and whose
firm is one of the leading firms of
this country engaged in interna-
tional banking, answers in the cur
rent Forum the oft-put question,
Why is gold exported? 1t is not due
to any balance of trade against us,
because that is largely in our favor,
nor is it due to a continued return
of our securities from abroad, be-
cause, he says, that has virtually
ceased. The accumulation of gold
by Russia and Austria is a factor,
but a slight one, as England, with
it's stock of gold and lower rates
of interest, would be the natural
source Of supply for them.
The explanation he gives is prob
ably drawn from his own experience
as banker engaged in international
banking, but which cannot be veri-
fed by any public record, as none
are made of the transactions which
draw gold abroad He estimates
that American tourists spend abroad
annually $100,000,000 The same sum
is paid for freight in the transport
of our products. Seventy-five million
goes to pay the interest on American
CIT oil
other $75, 100000 to pay the profits of
foreign corporations doing business
and Of non-residents from invest
ments here, making a total of $780,
100000 annually, which exceeds the
balance of trade in our favor of some
$240, 900, leaving a balance pay
able in gold.
In ordinary times, when the coun-
try was prosperous, these dividends
and interest and profits were left
here for reinvestment, but now their
payment is demanded in gold. This
change he attributes to two causes,
the mismanagemento of our railroads
by their managers, which has dis
cOuraged further investments, and
has withdrawn those made, and the
second is the widespread and not
altogether groundless fear that the
currency Of this country is shifting
from a gold to a silver basis, which
will inevitably further depreciate
their investments, and make them
not only reluctant to invest their
money here, but anxious to get it
out altogether.
He valves all question of policy or
theory, and, like a business man, ac-
cepts facts as he finds them. 1t is
vain to attempt to convert these for
eigners to a belief in silver as a
money metal, and if we are to have
their capital we must meet their
terms. We are yet borrowers, and
must be for a long period of time to
come. It is never for the borrower
to dictate terms. The exports of
gold will cease being abnormal and
resume their normal fluctuation of
tides when this country assures the
world that it proposes to base it's
currency upon gold. The abnormal
conditions will continue increasing
as long as the continued agita ton
in this country creates the fear, both
at home and abroad, that invest
ments made on a gold basis will be
returned on a silver basis.