The Washington times., 1915-08-10
THE GREAT GOLD SHIPMENT

like to have more of it.
THE GREAT GOLD SHIPMENT
Not the least remarkable fact in
connection with the shipment Of
about s1OO,0OO,OOO of gold from
Britain to this country, is the
secrecy with which the operation
was conducted. Until the consign-
ment Of treasure was safe at Hall
fax, there was not an intimation to
the public, not whisper or sus-
picion, that such gigantic trans
action was afoot. British exchange
was permitted to fall away to a new
low level, with never an intimation
that might have braced it up. Of
course. the reason was that trans
portation of such a treasure by
ocean is a risky business, with un-
der-sea destroyers skulking every
where and with the Germans only
recently demonstrating their willing
ness, in the Orduna case, to attack
even an innocent ship sailing toward
America. Doubtless part of the
German strategy in the Orduna at
tack was to impress on the British
people that the transfer of gold to
this side in payment of balances
was not to be regarded as entirely
safe.
Britain, by the shipment of this
hoard of gold, does more for her
fiscal rehabilitation on this side
than merely to pay S1OO,OOO,OOO on
account. That transfer of gold pro-
vides a stable credit basis on which
the allies will be able to finance war
purchases of several times the
amount of the bullion. 1t is very
we'll known that important Ameri-
can banking interests and Govern
Iment authorities have been desirous
even to prevent imports of gold so
far as possible. 1t has been felt
that the most important use for gold
in the present juncture is to keep on
the fighting line in Europe; that is,
to remain where it would insure the
maintenance of the gold standard of
money in England and France, the
real bankers of the allies. This is
not merely Of supreme Importance
to those countries; it is also of the
utmost necessity to the United
States if this country shall continue
making shipments of all kinds of
commodities abroad, far in excess of
our imports; for, once the money of
the buying nations should be depre-
ciated, once there should be even a
serious fear that it might become
deprecated, the difficulties of
handling great transactions with
them would be multiplied many fold.
Manufacturers on this side would
have to demand prices high enough
to insure them against the danger of
a suspension of specie payments
abroad. The reduction of sterling
exchange yesterday to the new low
record of s4.75h, when the par of
this exchange is $4.8665, represent
ed, in the last analysis, the measure
of this fear that England might not
be able to pay her obligations to us
promptly in gold; precisely as the
great depression in the value of our
exchange in the European markets a
year ago was the measure of Euro
pean fear that we might be unable
to meet our obligations there.
1t is not possible to state the ex-
act measure of the ebb and flow of
the gold currents since the war be-
gan. There was a great demand on
US, at the beginning, which necessi-
tated shipments to Europe; then the
tide turned and all that we had sent
away, plus perhaps $14O,OOO,OO0, has
come back to US; assuming that the
present shipment from England is
$1OO,0OO,0OO.
Financiers are agreed pretty gen.
orally that to the extent that we can
finance foreign trade without forcing
Europe to send us gold, it will be
better for US, in the end, than if we
were able to, and did, exact pay
ments in gold. First, Europe would
be able to buy far less from US.
Second, as she bought and paid by
shipping US her gold, she would be
making her own money system less
and less secure because the gold
basis on which it rests would be
slipping from under the towering
structure of credit currency. Third
the receipt of such vast amounts of
gold would be constant temptation
to initiation and speculation in this
country. Thus Europe would suffer
a poverty imitation, in paper money
while this country would experience
q nrosneritv imitation in 1oId The