Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-09-23
GOLD POOL IS NEEDED
TO L|Qu|DA7E DEBTS
Money Likely to Be Returned Soon
in Purchases of Bread
stuffs.
Securities Situation Shows Some I'm
provement-Bfg Holders Of Bank
Stocks in New York City.


said regarding the formation of the
proposed s100.000,001 gold pool in New
York but little has been written that
would give the average layman an un-
Outstanding of the necessities for its
creation. In answer to correspondents
the following explana ton is offered:
A debit balance exists in favor of
Great Britain against business inter.
ests in the United States. 1t matters
not how that balance was created. 1t
may have been through the liqufda ton
of American securities by investors on
the other side; preceding the closure
OF the New York Stock Exchange 1t
may have been for goods imported
from England.
In times of peace and plenty such bal
ances. while of frequent occurrence, are
not subjects of much discussion. Usual
lE our heavy expectations of grain and
provisions create a balance of trade IN
IavoT OF the business interests OF the
United States, especially where Eu-
rope retains, as she usually does, her
Investments in American securities.
Bills of foreign exchange drawn
against this balance must be met New
York bankers have been facing the
help from The interior. There is an
abundant supply of gold in the banks
of the country to easily wipe out this
debit with fair contribution to the pool,
the other obligations which her banks
must care for, as the chief reserve CEN
ter of the nation.
For this reason a call has been made
upon Chicago and st. Louis, and in
turn on bankers generally to contrib
formation Of the pool. The Treasury
Department and the federal reserve
board are lending all aid in the matter,
and lit is likely that they will exert
press more emphatic approval of the
measure.
The completion of the pool and the
liquidation of the debit will cause a
decided Improvement in the market for
foreign exchange.
Will Not Be Lost to Nation.
That this gold will. be lost to the
United States Is even less than prob
ability. 1t will probably be paid to
representatives of foreign creditors in
Canada, and from there it will prob
ably be sent back to the United States
in settlement of purchases Of grain,
pork, beef and other supplies. There is
hope, too, that expectation of cotton
will soon be resumed to our largest
consumer, England, and this would re-
suit in relieving the situation in the
cotton field. Moreover, large exports
of breadstuffs have greatly relieved the
situation already.
John ]. Mitchell, president of the IL
linois Trust and Savings Bank of Chi
cago, says that the west will be a sub
scriber for so per cent of the neces-
sary gold lacking to complete the pool,
to which s20.0OO.000 to $25.000,000 has
been contributed.
Improving Tendency.
An improving tendency in securities,
in bonds and in the financial situation
is reported from New York. Boston and
Washington, although this betterment so
far has been more in the nature Of
sentimental betterment rather than
actual.
The general and generous response
to the New York city Offering Of Is has
caused some loosening of investment
funds. Exchanges are permitting sales
for cash at slightly under closing figures
of July 80, but they still hold control
of trade where recessions are made and
are opposed to the public advertising
Of securities at recessions.
Action by the interstate commerce
commission in putting value under the
railroad shares would be the greatest
boon to the perplexed situation, but no
one can be even optimistic that the re-
hearing will mean material concession,
much as they are hoped for.