Yorkville enquirer. [volume] (Yorkville, S.C.) 1855-2006, 1909-04-16
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INTERNATIONAL FINANCE.
Some Interesting Facts About Gold
ENGAGEMENTS.

Some Interesting Facts About Cold
Engagements.
Every business day you see on the
financial pages of the newspapers an
item that reads something like this:
1.-The gold engagements today amount
ed to $4,000, ,O0O." In the same item you
are likely to see that some big New
York bank has shipped half a million
in gold coin to South America. There
will also be a cable about the premium
on gold in London or Madrid and a
statement about the government gold
reserve. When you look at a bond you
almost invariably find engraved on IL
that It is payable in gold. Wherever
YOU turn, in financial news or AFFAIRS,
YOU find some reference to gold. Ev-
cry one knows, Of course, that gold Is
the bulwark of credit and the universal
standard of monetary value, but not
every one realizes the important part
1t plays in the daily drama OF finance
and investment and how its influence
reaches to the smallest investor. This
weeks article, therefore, will be devot-
ed to an explanation Of the main facts
about gold, and especially gold ship
ments. No attempt will be made
to take up the relation between
gold supply and wages or prosperity
or the so-called menace Of Its overpro-
duction. These are subjects for eco
discussion.
In the first place, gold Is a commo
dity like wheat or corn, and its price,
like the price of commodities, Is sub
ject to the law Of demand and supply.
Although intrinsically valuable, 1t Is
more valuable at some time than at
other times. It's fluctuations anect the
markets of the whole world. 1t has
been stated that the production OF COLO
is the most stupendous of economic
forces. The total production OF mod
ern times is more than twelve billions,
while the average yearly output In
recent years has been about 100000
900. Although more than $1S5,000,0OO
worth Of gold Is used each year In the
arts, not all Of the huge annual pro-
duction is actually used. The very
fact that it exists, piled high in vaults,
gives stability and character to bus
mess everywhere. Gold is almost con-
stantly passing back and forth between
the great commercial nations. Last
year we exported s72,00O,OOO and i'm
ported $14S,OOO,OO0. This process OF
importing and exporting has a wide
Tho Cause Of Gold Shipments
Why should we ship gold to Europe
and why should Europe send gold to
us? There are two good reasons. One
Is that all final balances Of trade be-
tween the peoples Of different nations
and between the nations themselves
are settled In gold; the other is that
eold,. .like-ethe money, naturally seeks
the market or place where 1t can earn
the most.
Gold enters into the operation Of
foreign exchange which has already
been explained in this department.
Summed up, foreign exchange Is an In
exchange Of credits. The
credits do not always even up, so this
balance Is paid in gold. If there Is
a credit balance, the United States re-
ceives gold; If there Is debit balance,
the United States sends gold. Gold
exports are unpopular because, for one
thing, they decrease the loaning pow
er of the banks.
There are seasons in gold shipments,
as there are in the shipments Of other
In the autumn, for ex-
ample, when much money is needed
to move the crops, the United States
usually imports gold. In the spring,
when foreign exchange rates are very
high, banks and firms find it cheaper
to send actual gold than pay the high
rates. This is called the gold export
point" Sometimes there is no ex-
change for a certain foreign place and
gold is sent. Hence gold shipments
or engagements.
The phrase gold engagement Is used
because the New York banker or firm
goes to the United States assay office
down in Wall street and literally en-
cages gold for shipment. The banker
says: I'VE want to engage for ship
ment on next Saturdays steamer for
Liverpool gold bars equivalent to ST.
OO0, 900" In payment for this the
banker gives legal tender The gov
ernment charges nominal fee Of four
cents for each 500 of gold to pay the
cost of assay.
The old white building known as
the New York assay office which stands
in the very heart of Wall street ham
dies all the silver bullion and a large
part of the gold which comes to the
government for assay and marking.
The gold metal which comes in ranges
from old family heirlooms and plate to
granulated raw gold from the South
American placer miners. Great pains
are taken to make the assays Of the
most minute exactness. A consignment
of gold, for example, is first melted by
the assayer all in one lot, If possible,
and then cast into bars. If the metal
is only sufficient to make one bar sam
pies are cut from both ends and each
given to a different assay for exami-
nation. If there are many bars from
the same lot samples are taken from
each bar.
Metal bars are known as bullion. In
fact, all uncoined gold or silver Is call
ed bullion. These bars are stamped by
the assayer as to their weight and fine
ness. Standard bullion is composed Of
nine hundred parts pure gold and one
hundred parts copper alloy. An ounce
of pure gold has a coinage value Of
s20.67, while an ounce Of standard
bullion has a coinage value Of $3.50.
Pure gold cannot be coined for the rea-
son that 1t would wear off too easily.
This wearing away is known as abra- =
sion.
The Government Gold Bricks
The ASSAY office furnishes the shin