The Ogden standard. [volume] (Ogden City, Utah) 1902-1910, 1909-02-02
ACCUMULATED GOLD.

/ NSW 1OIk lUdIlC.GI. UG VI
France ha. thus TAI this ycal aeon
mulated the largest stock Of gold in
its history; Its last reported holdings
of this metal were S70G 100000 against
, S535.000,00n a year ago; compared
with the INV point reported on Janu-
AIRY ] 6, 1908, the gain has been UPWARD
of s150,000.000. 1t is noteworthy, too,
that, with the exception OF s2S.000,-
900 from New York, the accumulations
have been chiefly from the London
bullion market or South Africa. How
these vast holdings of gold have been
always a creditor nation and never a
| debtor, and because OF this fiscal po-
| sition the bank can command gold
whenever 1t shall desire to attract 1t
| from any available source. Owing to
| its contiguity to London there are
constantly investment operations in
progress between the two centers;
when rates OF discount at Paris are
relatively higher than are those at
London, French bankers buy securI-
ties or discount paper in the British
market, and when these holdings OF
securities can be protitably liquidated
they are sold and the proceeds arc
drawn from London through the ex-
changes. AS discounted bills mature
they are collected and the money is
remitted to Paris, also through the
exchanges. This process of investing
and OF discounting is conducted not
Only by French bankers in London
Tut in Berlin or any other continental
center wherever there are opportuni-
ties for conducting them. 1t may be
| observed that while official discounts
at Paris seldom change and these
only within narrow limits, unofficial
discounts fluctuate according to local
market conditions which are con-
trolled by the Bank of France. Thus
temporarily adverse discount condi-
tions are easily corrected and by reason
OF this control Of discounts exchange
ie practically regulated at the Will OF
the bank or as often as such regulation
shall be desirable.
The Bank of France prevents with
dTawals of gold from its stock for ex-
port by declining to redeem It's notes
In gold when such payment is re.
quested by a holder Of the note; pay
ment is however rendered In silver
and accepted when the note shall be-
presented by holder who desires the
coin for local use. If gold is required
for export it must be bought In the
open market; a premium therefor is
demanded which premium is regulated
by supply and demand. During the
late crisis when gold in the market
was not obtainable because OF its
scarcity, the bank, on the application
Of American bankers, sold the amount
required at the unusually high pre-
mium OF six francs per thousand; then
the premium on gold at New York
was 80 great as to make the shipment
to this city profitable. AT the time
of the crisis of that year the Bank
of France loaned the Bank OF Eng
land $15,000,OOO through the direct me-
gotiation of trade bills, part of which
were paid at maturity and part were
extended at the convenience OF the
Eank of France; this, it may be noted
was the third time that the Bank OF
| England had been relieved by that OF
France in an emergency through sim.
| liar operations,
The Bank of France usually accumu.
| lates gold with some special object
in view, which is not always disclosed
| Sometimes the operation is conducted
in anticipation OF the negotiation OF in
| teTnational loans; the long expected
| emission of a S2S0,000, 900 loan for Rus-
| sin, which was placed this week was
| the primary motive for the banks alb.
| sorption of the metal last year. The
| fact that the banks requirements for
| gold incident to the Russian loan were
| 80 greatly In excess of the loans re-
| quirements-part OF the issue being
for the redemption or exchange of i'm
| perlal treasury notes-has caused
much surprise but no explanation has
been offered. 1t appears probable.
though, that the motive for the large
accumulation and persistent buying or
the metal from London and elsewhere.
even after the sum required for the
Russian loan had apparently been
obtained was largely political While
Frances relations with Germany are
not positively unfriendly the former
has had reasons to be suspicious of
her neigEbor. Early last year Ger
many began to accumulate gold os.
tensibIy 70 the Reinforcement: OF the
Reichsbank's reserve CT the metal In
the process of accumulation the Ger
man bank. at the instance of the gov