The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1904-03-09
DOES RUSSIA GET
AMERICAN GOLD?
France May Use Canal Money
to Meet Muscovite Bond
FIotation.
Globe Special Washington Service,
1d17 = C&roa4


1417 G Street.
WASHINGTON, D. c.. March s.
There probably is considerable inter-
national significance in the fact that
the Panama Canal company of France
has indicated to the government OF the
United States that it is expecting that
the payment of $40,000,000 for the
Panama canal will be made to that
company in gold Immediately upon
the passage Of the title. This notice
was delivered to the government of
the United States two days ago, and
the assumption has been arrived at
in Washington, not, however, without
confirmatory details, that the Russian
government is about to negotiate
loan in Paris, and that this gold will
be needed to increase the gold supply
of France to meet the coming Russian
bond flotation.
It had been expected that the canal
payments, amounting in all to $780,
100000, would be met without the
shipment of gold from the United
States. This expectation was based
upon the belief that a sufficient
amount of foreign exchange could be
accumulated to meet the cash re-
quirements Of Paris, that balance of
the payment to the Paris company
would be taken in the securities of the
canal company, or in American securi-
ties generally, and that the payment to
Panama would not have to be made
for some time to come. In the case of
Panama, only $2,000,000 will have to
be paid in gold delivered to the repub-
lie. The remaining $4,000, 900 to be paid
for the land through which the canal is
to run will be invested in the United
States, and the officials of the republic
of Panama some time ago designated J.
P. Morgan, M. A. Hanna and William
Nelson Cromwell as a committee to
invest this money in such a way that
between and per cent per year could
be derived from it. This would give
Panama a fixed income of rising $780,
900, which would be sufficient to pay
the running expenses of the little re-
public.
In the case of France. however, the
indications now are that approximately
100000 in gold will have to be ship
ped as soon as the title or deed to the
canal has passed to the United States.
and it is expected that the title will
pass within the next two weeks. There
has been accumulated in New York
something like $18,000,000 of foreign
exchange to be used in making the pay
ments. This, of course, is available
and is apt to increase to about 100000
600 before the payment becomes due.
The balance of the price will have to
be in the form of gold shipments.
OF the total amount of $50,000,000 to
be paid, the depository banks will have
to make UP $30,000.000, and the balance
of $20,000,000 will be drawn from the
treasury vaults. Treasury officials fail
to see how the drawing of $30,000,00 of
the $154,000,000 now held by the de-
pository banks, in government money,
can possibly embarrass the money mar
kets, considering the fact that the mon
ey rates are, for this time of the year,
at a remarkably low figure, and that
the accumulation%of funds at New
York, Boston and Philadelphia has been
going on for some time. 1t is estimated
roughly that these three financial CEN
tiers will be called upon to contribute
about $15,000,000 of the total, and it is
believed that New York alone could
make up this amount out of govern
ment deposits in national banks with
out creating real money stringency.
Walter E. Clark.