New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-04-27
GOLD GOES WHEN
THE TIME COMES
Story of an Attempt That
Failed to Keep 1t in
This Country.

The proposal was made in the middle
Of last week seriously in some quarters
that II the government was going to war
with Mexico immediate steps should be-
taken TO protect the gold supply OF this
country by preventing exports OF the
metal. Just how this was TO De accom-
plished no one stated but there was
report that some unnamed international
bankers had iourneyed down TO Wash
ington 10 see the President about H. The
suppositlOn being that the President
would turn the problem over TO Secretary
McAdoo. who might. perhaps. put the In
defatigabe and ingenious John Shelton
Williams on the job.
Some of the international bankers who
were left behind did not, it is true, show
much enthusiasm over the prospect Tor
damming up the streams of finance, nor
lend much encouragement 10 the hope
that K could be done. Ne her did they
seem 10 think that il was necessary. And
among them there were several who did
not hesitate to suggest t. their mission
would have done well before travelling
capitalward TO have read over the history
Of the famous experiment Of 1879.
In 1873 there was a great deal more
reason for wanting to keep the gold sup
ply of the country intact than there is
now A series OF industrial calamities and
the constant redemption OF the legal ten
der certificates with gold at the Treasury
Department had reduced the Treasury
gold reserve by the beginning Of Febru-
airy TO only a little over 81 10000 In jan
uary alone So. 10000 had been exported
from the country and A5,00o.0O withdrawn
from the Treasury by the redemption OF
legal tenders. Every time the govern
ment had sold bonds for gold it had
found itself obliged to supply the CON-
because the subscribers for the bonds re-
deemed their legal tender certificates TO
get IT, There was no other way for the
government to rcplenish its store than
through the sale of bonds. and that gave
Il only temporary relief. for exports OF
gold were going on constantly.
Al last form of relief was found. The
famous Morgan Belmont syndicate was
formed, which agreed botn 10 guarantee
the maintenance Of the Treasury's gold
reserve and to prevent the expectation or
the metal from the country while IL was
carrying out it's contract. 1t was stipu-
lated. and agreed 70. that the syndicate
should DO allowed to buy some 100000
OF thlrty-year per cent bonds at price
equivalent 10 loiis, though the market
price OF other 1 per cents at that time.
bonds with less than half the time TO run.
was III. The syndicate bound itself 10
get at least half the $50. needed To
pay for the bonds I'm Europe, bringing in
the gold at the rate of about 100000 n
month.
Exchange rates we're then we'll above
what is sometimes called the automatic
export point. and the only way for the
syndicate TO carry out its promises was
TO borrow money abroad on its own credi,
I'm order TO supply with foreign credits
those who had To remit TO Europe. so
that they would not have 10 send gold.
And TO mako certain that no competing
lankers could send out gold they clint
mated competition. or thought they did,
by taking into their agreement every
banking house and bank In New YORK
city with important European connec-
tons. Tho price Of tho allegiance was
share In tho bond issue.
From February until July all went well.
Gold exports ceased. except few unlm-
portant ones To the West Indies. EX-
change rates continued high for time.
hut a new European buying demand for
American securities began 10 swing the
international balance IN favor of the
United states tC1TSi sterling fell again. The
prices OF all commodities and of stocks
went booming. The boom. however was
shortliVcd aud IL was its own enthu-
slasm that wrecked II. Not TO 80 into