The Birmingham age-herald., 1914-10-30

the state government, the equalization of not less than s15o. 900 on current ac- count, probably as much as s2oO. 900. GOO and some of the bankers were inclined to think that this estimate was too small. since 1t was made, however, New York city banks have underwritten a gold fund or sS2000,C0O which is to be used to pay the current indebtedness of New York clty abroad In addition, the banks of the federal reserve system have under
 written gold fund of $100, 900 900, which Is now available for the payment of part Of the American indebtedness abroad lhls will leave only about s75, ,000 900 of in- deDtedness not yet covered. But we are Low exporting commodities in excess of our imports in such quantity and of such money value that before the end of the year these exports should in themselves be sufficient to liquidate the balance of our current obligations abroad.
 Another Factor
 We are also importing relatively very little. Furthermore, the sale of letters or credit to Americans to be utilized across the sea has practically stopped. Herein is contained the chief reason why the impression is so strong in the financial district that within a few months we may have accumulated credit, balances unprecendentd in our history. These facts have undoubtedly been brought to the attention of Sir George Paish, although as an expert authority he must have had some knowledge of them through his own sources of information.
 Undoubtedly he had this probable | situation in mind when he said that
 he did not look for any large sale of American securities by foreign inves- tors after the stock exchange Is opened But if we accumulate credit balances within the next six or eight months | in great amount we shall be able to pay easily for all the securities Grea, Britain may offer to sell to us. In 1898 and 1900. we absorbed approximately a billion of American securities. without l in the least affecting the money mar
 kets. and we were at that time import l ing gold heavily that at last il was serious problem how safely tc store that gold fin the clearing house vaults. About $100.0O0,000 in gold came l in at that time. This movement which characterized the beginning of the present century was made possible by
 our heavy experts, some of which rep | resented the purchases of Great Britain on account of her South African war;
 An Immediate Effect
 There is no question that the de-
 cline in sterling exchange which be-
 came pronounced last week was in great measure due to our increased
 exports When the New York city banks
 underwrote gold fund of ss2,ooo,oOt
 for the purpose of enabling New York
 Lefty to liquidate the notes it had sold
 in Europe. bankers did not know whether or not they would be com pelled to use all this gold for that pur- li,ose. Now. they are persuaded that Il will not be necessary to call upon the
 banks for their full subscriptions il gold. Nearly $30s000 900 of New York l city obliga tions have already been paio
 and this has not required all of ths gold sent to Ottawa for that purpose. l The national gold fund of $100,000,
 900 to which all the banks in the fed eral reserve system subscribed, is no 1 likely to be exhausted by those wht want to pay their obligations in Flu rope. At one time 1t was thought tha | it might be necessary to send out O.
 the country s1s2,0o0,0Oo in gold so tha our current obligations abroad coult
 be paid. Now 1t seems probable tha 1 for a considerable part of this sub
 scription to the gold fund the banki
 will not be called upon to make remit
 tanoeA '
 Agriculture and Manufactures l This new and stupendous movemen
 of commodities from the Atlantic state' l to neutral and belligerent nations fl possible because we have developed
 agriculture and manufacturing side b,
 side. Leaving cotton out of considera
 tion--for the cotton question Is not ye decided--our exports of commodities seem already to be equally divided int two ClaaQaQ rAnre9antAt1Ve O
 American agriculture and the other O
 the manufacturing industry. Whatevel
 criticism may have been justly mad'
 of the organization of some of the larg'
 corporations commonly known "bif
 business" 1t is certain that American
 industry could not have responded t,
 the foreign demand for manufactured commodities but for the organization
 of these large industries.
 The record made by the American
 farmers in the year 1914 is an in
 fluentiai factor in maintaining heav, iexports of agriculture commodities. Tn money value of the crops, even wit large depreciation of the market pric , of cotton, is considerably over $9,00O.
 900, 900. There Is no other nation 1
 which the manufacturing industry an
 the agricultural industry could marc side by side in meeting the advance ' of foreign purchases as our own man ufacturing and agricultural industrfe are now doing The resources of tn country are now ample not only fo ' our own needs, but for the emergenc needs of every, other nation. and thi lis ono of the reasons why the belle
 Is gaining ground that during ths con tinuation of the war New York wi become the worlds commercial clear
 ing house.