The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-26
THINKS FOREIGN CALL
FOR GOLD Is UNJUST
"Financial Chronicle" Says Ma
tions Abroad, Not America,
Are in Default.
ADVISES GUARDING METAL

The Hnd1ctoi Cnro~fcfs Of Saturday.
in discussing the settlement Of this coun-
trys indebtedness 20 Great Britain, said :
Tn the limo or general crisis like
tho present zeal on tho part OF one cctin-
try IN protecting It's metallic reserve
and indifference on tho part OF smother
involves a risk of danger to the latter
II means inevitably that the energetic
country will profit at the expense of the
apathetio one Tho situation IL made
more acute by the fact that these Eu-
ropean countries have ceased meeting
their obligations either in gold or in any
other way. and therefore make 1t i'm
possible for US 10 collect what is owing
70 us. Nevertheless. they are insstcnt that
we must meet our own obligations, NOT
merely IN the ordinary course through
settlements in foreign exchange, but by
the actual delivery OF gold
II we fail to produce tho gold but ask
that allowance shall he made for tho
moneys duo us and which we cannot coll
lect. We arc charged with attempting 20
repudilte our obligations and told II with
surely injure our credit They conveu 81
i"ntly overlook tho fnct that thcy are
in default. not We
Since tho outbreak of the war Tho
Bank Of England has increased It's stock
of bullion by no less than t33, t40,8s7,
equal 60 S162. 900. This IL favorably
commented upon on every side, and the
English banking system comes IN for a
great deal of praise, az II always does on
such occasions, on the part OF the news
paper press.
but as The greatcr pert Of TIE new
supplies OF gold which tho Bank Of Eng
land has nh
United states and we continue 10 make
further large contributions week by week
to the banks stock IL would seem open
to question whether the Improvement IN
the banks pos ton Indicates so much tho
superiority NJ the English banking system
as II docs the unSonted liberality on the
part OF tho United States In so readily
stripping Itself or its supplies OF tae
metal. II should not be forgotten that
anoat for Europe when -he war hroke out
We having parted " IN nearly 500. OQO, Oul
OF gold during Juno and July Durlu,
the early part OF August tho outflow was
arrested for n time IN Difference 20 popli-
lar sentiment. soon. however. We wee
asked 20 resume shipments again. the gold
being for British account but going "a
Ottawa, 80 rs not to be subject to capture
b. the encmy and m that form the move
ment has continued week by week since
then
~ the Rank OF England Is strong 60.
dny and has escaped dir. peril Il should
not be forgotten that Il has been maze
strong with tho aid OF American gold J.
y prcSumptuous "a osl, what would r@ ~,
position Of the bank to-day 10 Immediately
upon the outb rcIk Of the war tac l'u!rCI
States had Ike the European Goy.-n,
ments adopted drastic measure. 20 pre-
vent "a drain upon It's gold reserve
suppose the United states Government
, had had tho power to prohibit exports
OF the metal and had exercised that power
| how then would the Bank of Engiano
have managed 10 strengthen It's position
II can get no gold from France or Ger
many or Russia for obvious reasons. Ac-
{ cordingly ther0 would have been no
/ source Of supply for the metal except the
South African output and tho drblets OF
gold that com" from Australia. In III,
/ event that tho United states had forbid
I don exports oC gold what then would
have become Of tho fine spun theories a,
| To- the principles underlying foreign OK,
/ change operations, which are SOUND
enough IN ordinary times but do not al
all M war times? Is Il asking too mucl
| to request our banking interests 20 dc
I what Il wou1d clearly be the duty OF th'
Government TO do IL u had the necessar,
/ power? II tho Bank OF England knew
! tndt bdnklnE interests mere were deter
mined not 10 let any more gold go on
efforts 20 get gold would cease.
Most serious consequences may result
I from the present gigantic conflict In Flu
rope. II the struggle should be pro
iongcd tho greatest financial cAtacylsm o
( all tho ages may ensue. Al such a TIM
and with such possibilities II Is the duty
OF tho United States, in its own interss
and in the interests OF tho entire world, 4
be prepared for any and all emergencies
We must keep ourselves strong and abov,
all conserve our gold supply, OF whlcl
there IL no superabundance In this coun
try, views 10 the contrary notwithstand
ing,
THE fact that the deficit OF the Clear
ing House banks has been oxtinguishe,
should not lu.l us into "A false sense o
security Notwithstanding the deficit N
longer exists the Clearing House bank
have added surprisingly little 20 the'
gold reserve during the last two months
and their holdings to-day show only me
crate recovery from the low level reach -
IN August Furthermore. what little gall
they have made has been mainly NJ m
fxpcnge OF tho United States Treasury"