The commonwealth. (Greenwood, Miss.) 1896-1923, 1915-08-27
THE GLUT OF GOLD.

THE GLUT OF GOLD.
Europe has sent this country about
$16O, 600, 600 in gold since the beginning Of
the year and the yellow metal continues to
from all parts of the earth. To the
huge sums thus diverted from their normal
uses must be added the product of our own
mines, which may amount to forty millions.
The cause of this tremendous shifting Of
cash is well understood. The Allies, in ur-
gent need of war supplies and unable to pay
for them in the ordinary fashion, have to
send the only stuff that is always and ever
current, says the Times-Picayune Of the
Oath inst.
Thus it is that the foreign exchanges
are ~demoralized. Nor can the exchanges
be given the semblance of stability, except
by shipments of gold, or vast sales of secur-
tiles. Some progress in this direction has
doubtless been made, through the return of
.giltedged railway bonds which Europe took
in times when she had an unwieldly surplus
of capital, but no permanent relief is to be
had from this source. The necessary read
justment might be accomplished by floating
foreign loans here. But American investors
will instinctively fight shy of foreign loans,
while the outcome of the wal is dubious.
Nor is such an attitude at all strange. To
know what Consols, or Rentes, are really
worth, one must know when and how the
war is to end. With Germany triumphant,
Britain and her allies would find it hard to
meet the interest on their bloated debts. not
to speak Of the principal. And the Teutonic
powers would be in similar plight, if the de-
|cision went against them.
1t is consequently improbable that the
exchanges will be stabilized by sales of for
eign securities. How, then, is an absolute
glut of gold, with it's attendant evils, to be
averted? The allies, completely organized at
last, may be able to manufacture their w
munitions and the level Of c~ommodity-val-
ues may fall low enough to wipe out the
adverse balance that remains. The first
stages of this process are already observa-
BILE. A year ago Europe was buying our
grain, at fabulous prices, Wheat, for May
delivery, rose to t$1.65 and many experts
Expected it to touch two dollars, whereas
December contracts may now be bought
around 81 "a. And the change will then
be still more revolutionary, if the allies sue
coed in opening the Dardanelles, for the sup
plies would, in that event, feel the weight
of Russia's surplus, now impounded by the
closure of the Straits. Cotton is not likely
to sell so low as it did in the last months of
1914, the more especially if the allies i'm
pounded quantities to offset the takings of
the Teutonic mills. But, even so, we can
not expect our exports Of commodities to
continue on the scale which brought about
the disquieting imports of gold.
It is futile to theorize concerning mat
tiers of this sort. In finance, as in all other
human affairs, the inevitable is simply the
unexpected after it happens. In the first
|days of the war, we sent a hundred millions
of gold to the Bank Of England's Ottowa
branch, wondering the while how we should
ever get the millions back. Now, on the
ever throw off the yellow burden which Eu-
ropes needs are imposing. In such matters,
it will not do to forget that everybody is
wiser than anybody and that Father Time
is wisest of all.