The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1914-06-26

are not seeking funds from the banks.
but instead. in anticipation of the enor-
nous harvests, are depositing money in
large amounts. If this condition fairly
we'll represents the farmers of the grain
growing regions. then it is possible that
the great financial centers will not be
called upon for funds in large amounts
with which to finance the moving of the
crops.
This is one of the apparently paradox
ical conditions of which so many have
been observed in the past year and a half
IN the United States. Not the slightest
apprehension of any stringency of the
money market because of demands for
funds for the movement of the crops
seems to be felt in any part of the coun-
try. IT, however there should come a
SWIFT and great business activity which
could be traced to the stimulating effects
of the crops, then undoubtedly money
rates would harden and unless the move
ment of gold across the seas was check
ed before that time would probably put
an end to the movement.
Incomplete Explanation
Reports have been received in this city
of the attempt of senators at Washing
ton to explain this phenomenal exporta-
ton of gold. Some have asserted that
d
international trade represented by in
crease of importations and decrease of
exports. Yet that is not the view taken
by the leading authorities upon foreign
exchange for the expectation of gold.
The operation of the new tariff law may
have influenced to some extent this move
ment of gold, but the best authorities say
that the influence Is very slight
One senator is reported to have at
tempted to explain the movement by re-
ferring to the increase in the price of
foreign exchange. That, however, is
really symptom and not a real cause
1t is now the belief of the best authori-
ties in the financial district that this
movement of gold is to be, and in fact,
already Is, of great advantage to the
United States. 1t represents economic
laws and only indirectly political agita-
ton or action. All of the civilized ma
lions of the world. it was said at the
clearing house this morning, are now
upon the gold basis. The comparatively
recent establishment of the gold basis
by these nations has unquestionably
made it imperative that there be an
equalization or a parceling out SO to
speak, among the nations of the gold
supplies of the world. Three or four
years ago Europe permitted too great an
expansion of credit in view of the COM
paratively small gold reserves which
were held by European nations. This
and the effect of the Balkan war brought
these nations perilously near perhaps
the most grievious financial and industri-
al catastrophe of modern times. The
United States was able to give Germany
much needed aid and the crisis in the
German empire was to a considerable
extent, averted or ended by this assist
ance.
A Crisis for Us
So closely connected are the various
financial and industrial nations by means
of the cable and swift ocean commune
cation that it is impossible now for any
serious disturbance to take place in any
one of the large nations without caus-
ing unhealthy reaction in the United
States. That was especially illustrated
at the time of the failure of the Barring
Brothers at London in the early nineties,
for although the desperate situation was
relieved by the action of the Bank of
England, yet the shriveing of credit
which was occasioned by the credit was
of serious consequence in the United
States, and was one of the causes of the
hard times in the winter of 1898.
IT, therefore, the United States-which
possesses abundant supplies of gold and
is receiving approximately each year
100000 of newly minted gold which is
to furnish Europe with gold which is
needed to build up the reserve of the
great banks of the continent we are in
that way aiding ourselves, for We are
preventing. in part at least. what might
be serious collapse of credit.
Two years ago the condition in Europe
was desperate 1t was sometimes spoken
of as financial breakdown, and it was
one of the chief causes for the business
depression which prevailed all over the
world. This. rather than political or leg
islative agitation, really explains in no
small measure business depressions