Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-09-08
U. S. to Step in
and Fill Breach.


and the United |
and Fill Breach. States is the only
nation left at peace which is strong |
enough to step in and I'LL the breach. |
The natural consequence of such an
event must be that the powerful bank |
ing firms i'll this country will come
into as general recognition and fashion
as have been the firms of London. The
dollar will become a measure of value
around the world, and the dollar draft
be negotiable on terms every whit as
favorab BILE as the pound sterling draft.
The United States bankers are equal
to this situation. The financial power
of this country is enormous. In our
Treasury lies considerably more than
our share OF the worlds gold. The
federal reserve act provides for a
strong organization of our national
banking system, and for concerted &C
ton by all members of the system.
1t permits national banking associa-
lions with capital and surplus equal
to 100000 or more to establish
branches in foreign countries, and a
number of our larger banks are pre-
pairing 10 intrench themselves in
foreign fields. 1t also provides that
member banks may accept drafts and
bills of exchange growing out of
transactions involving the importation
or expectation of goods drawn upon
them, SO paving the way for the trans
ference of much of London's, Paris
and Berlins International brokerage
business to this country.
At the time of writing the interna-
tional exchanges still continue in bad
state of disorganization and uncertainty.
Several tentative suggestions have been
made, one which looks to the induce
ment of the English houses to recon-
nlence their regular international bust
ness While the large European banks
: have plenty of gold-the basis and only
true basis of international financial OPP
eratons-they are boarding 1t against fu-
ture eventualities. They have no gold
hut for necessities and for national Sc
curity. For many months the countries
% Europe have been engaged in the bust
ness of piling up vast gold reserves
against the time of war.
4 x
Ciermany's war chest was increased
from S1s4 100000 in gold December 81.
1872 to 1885,
European War Chests 100000 June 80,
Are Filled to Top. cen menths
France piled up her gold reserves from
S616,Ooo000 to s792. 900 600. while Russia
managed to secure gold to the value of
SSOc.OCI0oo. This gold, however, is not
for trade. nor for the financing Of other
than the most urgent of home needs.
Furthermore. in all likelihood, the ma
tons of Europe will not be able to pay
much iii commodities, as the war will
put firm brakes upon their industries
where it does not stop them altogether
New York is looming larger with every
month of the war. upon the horizon OF
international finance. -.....
Despite our enforced export Of SS4, 900.
go In gold to Europe before the wal
broke. and further gold export of some
SJ0,00ooo0 afterward. the conditions OF
gold supply are favorable. Though
bankers do not believe that we should
send more gold abroad, except in tht
payment of our debts which cannot b.
met otherwise, their attitude Is rather
one of protection of our exporters thar
one of fear lest the country be unduiy
drained of its gold.
Moreover the United States will be able
TO finance much of its foreign trade
through the exchange of its own com
modities. while Europe will have to de
pend largely upon her gold. The problem
of getting this gold, however, Is con
siderable one. On the other hand oul
payments tn Europe account of divi
dends earned upon our securities hei,
there, or maturing bonds and loans. ar.
always falling due. In September abou
Sl2.eO.O0o of New York city's obligation
held in Europe fall due. So. the bank
ItdSpN tndt THESE uue pdytleUl
should provide the exchange wherewitl
TO finance our shipments of goods to Flu
rope, rather than that we should send he
gold.
With the establishment Of our ney
banking system and consequent bette
contro oil O
U. S. Is Building our gold sup
Financial Supremacy. the fol,or.in
cut of the policy. as far as possible, c
paying our continually maturing debts I
Europe with produce rather than gold
with the accomplishment of our own fol
eign exchange business without calling
a disinterested partner. and with the e,
pansion of our commerce to the fulle,
extent with the neutral world. fnancis
conditions in this country should deyelo
more elements Of strength and promis
than ever before And upon the founds
lions Of the greater strength. the Unite