The Birmingham age-herald., 1913-06-04

sons in this city. His statement was in
the nature OF a confession that a some
what critical condition prevailed during
tne latter part of the autumn of last year.
ne American banks were then undertake
ing 10 AID the movement of the crops from
the nelds to the markets and were also
sreatiy occupied with attending to the de-
Hiahos OF men of business for commercial
accommodations. These accommodations
were needed because the reaction from de-
presslon TO great activity had at that time
begun.
just then the fear of general war in Eu-
rope led to the withdrawal of bank de-
posts from the banks of Europe and the
noarolns or enormous amounts of money.
therefore in order the better to protect
the situation In this country Mr. Talbert
and his associates undertook to import
gold from London. They were willing to
import this gold at loss. They made Of
iefs which In ordinary times would have
been tempting. But the reply which they
received from London was a curt, abrupt
refusal to let any gold go. The London
bankers went so far as to intimate that If
the American bankers set the machinery
in motion by which gold importa ations
could be forced that would be looked upon
as hagrantly unfriendly act
Struggling Along
Not until Mr.. Talbert made this state
ment was it known to any but very
rev persons that the situation was re-
garded as critical enough to undertake in
small way what was successfully under
taken In larger way at the time of the
currency panic of 1907 Then London and
Europe were in a position to let us have
all the gold we needed, and we got a lit
tie over 0000 from abroad within a
few weeks.
Not Any OverprOduction
II there were truly overproduction of
gold and II the forecast were that this
overproduction would continue for some
years then it might be deemed expedient
to increase the amount of gold contained
within dollar. But, whatever the uni
Verslty professors ray think, the banking
world is certain that there is no overpro-
duction. If business continues 10 expand
proporuonately as it has since 1900 the
world will welcome all the gold that the
miners can produce. There are to be.
within the next two or three years. strong.
practically imperative demands for gold
from China. For instance, Willard d.
Straight, who represented In Chan the
American syndicate two or three years be-
fore the republic was established there
negotiated contract, which j. p. Nor
gan &; Co. and other American bankers
agreed to execute, by which $50 100000 was
correcting the Chinese currency system
and establishing that system upon a gold
basis. This contract was Cancelled auto
matically when the republic in China was
established. But China will be compelled
speedily to secure gold in a large amount
If the republic is to obtain stability and
begin new era of national prosperity.
Chna's demands and the need for great
amounts of gold with which to replen-
ish the waste occasioned by the Balkan
war are certain, in the opinion of our own
bankers, to demonstrate that instead of
an overproduction of gold we are really
dangerously near a shortage If short
age of gold on a large scale is found to
be world phenomenon within the next
two or three years it is inevitable that
this will cause a decrease in commodity
prices. Some qualification is. expressed
that the apparent visible internationa
trade balance in favor of the United
States for the current fiscal year will be
in excess of 5000, 100000 Our bankers say
that it is fortunate that the immedia lie
balance, that which represents the diff
ference between our purchases in foreign
goods and our sales to foreign countries
is as large a sum as s600O00,OOO. For this
sum will go far toward extinguishing the
real debt which we owe to other nations
a debt which is believed to amount 10
nearly 81 200, 100000 That is to say, an
amount of this size will be needed COM
ple.ely to liquidate our foreign obligations
for the wear.