Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1915-06-16

millions. But the bank of England.
never had carried q vast gold re-
serve and had no such reserve Ia
August, 1914, when the war broke
out. The bank Of England hasn't a
large stock OF gold on hand today,
although the amount in the vaults is
larger than usual. having been rein
forced from the bank Of France,
during the last few months By
hundred million dollars.
England has had no necessity for
boarding such treasure, either az a
basis OF circulation or as a precau-
ton against possible war She has
sent out her gold about as fast as Il
came In. because assured Of a never
failing inflow from her colonies the
Transyaai, Australia. india and oth-
ers. II is estimated that from such
sources twenty million dollars worth
Of gold reaches London every month.
The English policy thus has been, not
to hoard q great sum OF idle gold, but
40 keep most Of her gold at work all
over the earth
70 buy abroad In war time a ma
ton must pay out gold. While cred
its may be established abroad and
goods bought on what Is practically
an l. O. e.. nevertheless gold must
be shown England has vast credits
everywhere because nearly every
where great sums IN the way of in
tcrcst and dividends are always ow-
ing her. but at the rate OF oxpend-
lures In this war her credits are fast
being eaten up. and resort will have
to be had eventually to gold to pay
for her purchases
English credit, backed by French
gold. il pretty much financing the al
lies. The new British finance minis
ter met the Italian finance minister
az soon as Italy entered the war, rs
previously Lloyd-George conferred
with the French and Russian finance
ministers In Paris II the Balkan
states enter the war their needs will
have to be similarly provided.
on the other hand, Germany has
devised self sufficient financial
plan The German bank had aecum-
nlaled vast treasury Of gold before
the war, and since August has aug
mented 1t by inviting or compelling
the deposit Of about all OF the gold in
the country. Judging from the mea-
ger Information we can get the sys-
tenn seems to work. How long Il Will
work is another question. Germany
pays out gold with extreme reluct-
ance; yet what supplies she does re-
ceiyo from Holland and the scandi- |
navlan countries she pays for mostly !
In gold, and as the war drags on. she
must LET 70 Of more and more gold Or
do without outside supplies.
Credits are established in America
for all Of the bellserents. and they
are equivalent TO loans. or will be !
equivalent before long, because cur
previous indebtedness TO Europe isl
liduldated, and we are becoming
more and more the creditor. while
our securities owned In Europe viii
be passed back to us, there is limit
to such exchange. European holders
Of securities viii retain part of
them. as those above par are least
liable to depreeiate Moreover the
Indebtedness Of Europe 70 us mounts
By such leaps and bounds that more
than returned securities VIII be re-
quircd to liquidato Il.
Hence gold will flow into this
country, and more rapidly the longer
the war lasts, aud If the war contin-
ues for a year or two longer. we may
have in our possession or by pledge
the greater portion of all the worlds
gold.