The Washington weekly post., 1900-05-22
EXPORTING The GOLD.
Why the Yellow Metal l. t.sins TO Bank
OF France Iu.t Noty.
From - New Yors Mai and Express.


Why TIE yellow Metal Il Goins to Bank
of France Ju-t Nsw.
From ~ New Yors Mai and frpress
On three successive Thursday mornings
have steamers sailed from this bort with
eonsignments Of gold sc- the Rank 81
France The total amount of these chip
ments Is not large. being only about g.
V@"t but the gold movement mas been
so Influential factor 10 Wall street that
by this time everybody Is iuIuiring iuto .t.
This i in spite Of the fact that bankers
explain that this movement Is rot 20 paw
trade balances against this country. hat
10 increase the balance due this country.
Europe being fain 10 borrow money tenn
pcrarily from wealthy America. The
sight OF John F. Bsrkieys express Wag-
ons drawn UP IN front OF the assay Office
Is an object that is more convincing than
explanations. and Il has TO GoUb; helped
flons the selling movement IN the stock
market
a remarkable fact in this connection Is
that France was the last country that the
financial writer's had picked out "a the
objective Of gold shipments Germany was
said 10 be most I'm need Of gold. judging
BY interest rates and trade conditions. au3
Great Britain was expected TO be an early
bidder Tor American gold as a means for
prosecuting the war In South Africa. Now
that France has taken the Initiative
everybody says:
"Of course, The letters Of credit ~
thousands OF tourists 10 the Worlds Fair
will have to be met"
For the first time since 1897 gold bars
have been shipped this season. The res-
son Is that the tax on them OF oUe-tenth
Of 1 per cent. which was formerly In
force. was reduced last winter to four
hundredths Of I per cent, so that IL IL
cheaper 10 get the bars than 10 send dOu-
BILE eagles and stand the loss from abra-
sion, which Is said 20 average about sew
en-hundredths OF Fer cent. in each trans
FEY.
The packing Of gold for export IS an art.
The gold is put in small oak kegs. bound
with brass hoops Bars are packed In
Sa WduSt, 50 tnat no two can come TN CON
tact. I'm which position IL j. said TO be I'M
possible TO lose anything from abrasion.
Each keg contains $1,000. Coin Is placed
in bags, each Of which will hold 5000, and
ten of these are placed In "A keg In
either case it il easy TO see how much IS
being moved, ana an express wagon gong
10 the pier with 4 load Of twenty kegs Il
carrying OF 81 000. Gp the weight of which
Is about two tons The trucking IL all
done by Mr.. Barkey. whose father was IN
the same business before him.
The process Of getting gold out OF the
country is not n easy as one would sup
pose. All the large foreign banking houses
and some Of the largest national banks
with foreign connections have exchange
experts who are figuring constantly on al
kinds OF international transactions. II -
the highest art of banking To discover how
TO make q prOfit cut Of the casual fluCtu-
ations of exchange between the various
money cnnteFg Of the world. In A simple
gold shipment from New York to Havre,
the price II exchange on Paris is 90 high
here and the price or gold Is so high IN
Paris that IL pays TO sell exchange and
invest the proceeds N gold. transporting
a nd inE II an
CAPITAL invested. The recent shipments
have only been possible because the Bank
OF France allowed interest on the
amount involved.
But the exchange genlrs often discovers
means Of getting his gold to the best mar
ket even when the rate OF exchange be
tween his own cCuntTy and that Of the
best market is rot sufficiently high. The
City Bank is a Csss in point. Although
the gold goes 10 France, the exchange
operations which II will liquidate were
participated in by bankers I'm three Euro
an capitals. and It is tanchincally called
a quadrangulGr transaction.
T A bill of exchange IS an order for the
payment Of money like any other draft
and when, owing 10 difference In inter
est rates between two capitals. IL is OF
advantage TO bankers In one city TO buy
exchange on the other in the open mar
ket, large amount is naturally Invested
In this way. Interest rates In this city are
Europe they are higher. an almost unprec-
Adented condition Cf affairs. so that New
York bankers have invested very freely in
exchange. This accounts for the high
prices now ruling for exchange in New
York. Bankers, however, generally deny
hat the amount OF capital tied up In ex-
change at this time Is anywhere near So
OOOO6 as has been estimated.
This illustrates the fundamental prinCi-
pie OF gold movements that abnormally
low interest rates drive out gold from n
country and abnOrmally high interest
rates attract gold from other countries
The best authorities agree that the prin-
,ipal influence bringing about the presen.
gOId movement has been the Increase IN
,an6 note currency, which has lowered II
erest rates, and promises 20 keep ther1
Ow As to the probable extent OF the
present movement opinions differ, but few
.xpeCt II to exceed SD.0O0O0J.
The foreign exchange expert ts one o.
he shrewdest and best-informed men in
Wall street When he cOntemplates &
TRANSACTION. il is necessary
or him to conceal his purpose. Other
wise some competitor would step IN
,head of him and share his profits. He
,uys and sells exchange, and the ex-
hange broktS who go from banking Of
Ice 70 banking office are often In the dark
egarding his desires. IL they happen to
lave a line Of paper that the expert
wants, he bargains with them for II otter
IS If it were matter or supreme lndif-
erenca to him and ne even offers 10 sell
he same paper to them at the price they
sk II that price is higher than he thinks
air.
In negotiating exchange for the goll
hipment Of Thursday last the National
ity Bank purchased at anywhere from
0-l00 to 20-l00 Of ! per cent below the
rice at which Il sold This illustrates the
arrow margin that exists In exchange
the merest fraction meaning
thousands Of dollars on very large ship
lents.
Every important ocean steamer now
las treasure room especially construct
q for the safe conveyance Of gold and
liver. which is a recognized department
+ the ocean transportation business. The
alue Of such shipments on a single YES.
81 Is usually limited 20 GO00.OjO as the
companies refuse 10 insure a
arger amount on a single vessel.