The Washington times., 1914-09-10
THE GOLD FUND PLAN.

The program of raising, among
the American banks, fund OF $780,
100000 to pay off American obiiga-
tiors abroad, ought to be anything
but difficult one. New York city
has large amount of its short-time
paper, city treasury warrants, out
standing in Europe. Europe wants
the money, not bonds or new war
rants. 1t presented a difficult situa-
tion, but Inc city authorities and
bankers got together, raised the
cash, and every dollar of the foreign
held obligation will be paid in gold.
Of course, as is always the case,
as soon as it IS perfectly certain
that the gold is there, many people
will not want it. This is especially
certain to be true in the matter Of
the gold fund plan. 1t is calculated
that if the American banks guaran-
tee {. S150.0OO00C fund, they will
probably have to raise and send
abroad not .over s25,0O0,G00 of it..
For as soon as the foreigners realize
that the United States is still able
and willing to pay its debts, they
will feel so cheerful that they will
not want to collect. 1t will be exact
ly parallel to the case of the bank
Gepositor who wants his money until
he discovers that the bank has it;
then he doesn't.
Let US send the first s25,0O0.000
Of this gold, and the receipt of it
will give a huge impetus to conf
dence and business on the other side;
specifically, Of course, in Great
Britain. People will suddenly resume
sending orders for the things we
have and they want. They will con-
clude that it's perfectly safe to order
cotton, wheat, meat and the other
nccessaries that we have here, and
that we are especially anxious to
sell. The result will be that, while
we will pay perhaps S25, 100000 of
Our foreign obligation in gold, that
payment will so stimulate exporta-
tioDs that the balance will be paid
in products. We can spare the
products; we want to sell them. We
can't spare the gold.
The question is, briefly, whether a
show of confidence and resources will
now save more than a policy of ex-
treme prudence, bordering on pen
ury, in the management: of our gold
stock. 1t is probable that the vigor-
Gus and confident plan Of paying our
debts, even though nearly all the rest
Of the world has suspended paying
for the time being, will produce the
best results. Paving debts has be-
come a right questionable perform
ance. Near a score of countries have
rcsolted to the moratorium; for
those not directly involved in the war
are in some cases quite as badly in
jured fiscally as those involved.
Perhaps the most telling argu-
ment in favor OF the bold program
ot raising the fund and paying our
Gebts, is the experience of Germany
since the war began. Germany de-
clined to order moratorium. 1t
went on doing business. ana of
course making all possible effort to
increase the reserves Of gold, The
result was that when the war was a
month old it was stated that the
Reichsbank actually had very con-
increased its STOCKS of gold,
and held more than at any other time
in its history.
At least that performance OF the
most scientifically organized banking
institution in the world should
strengthen the purpose of these
patriotic American men of finance
who want to maintain our crcdiC
abroad, even though the rest Of the
world gives up ir despair.