The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-02-06
GOLD IN THE WAR.
About 900 Millions n Year From the
Allies Mlnes--Germany's Limit.

Allies Mlnes--Germany's Limit
To THE ED1ToR or TUE SuN-Sh.
According to Sir Edward Holden, one
of England's most prominent bankers,
the gold resources Of Germany will
enable her to prolong the war for
year. After that time she may con-
tinue to fight. but 1t will be as a ma
ton thrown wholly upon an ire
dcemable currency basis. with all the
disadvantages in conducting any pos
sihle foreign trade in such circum-
stances and all the discredit that will
handicap her future indefinitely. The
cable necessarily condenses his speech
in reporting II, hut that seems "A fair
Interpretation Of his words.
Let us examine some broad facts
of the situation hearing out this Eng
lish bankers prognoss, though the
cable does not quote him to this pur-
pose. The gold production Of Europe
proper is almost negligible. Armies
on land and navies on the seas have
cut off the two Teutonlc allies from
power to increase their gold supply
from outside their borders They can
not build up a merchandise trade bal
anCe on which to draw gold even
Germany's sales Of her American Sc
curities, If successfully managed,
could not get gold to her. But reichs-
mark exchange in New York is now
at discount Of about per cont and
has been still lower in recent weeks.
on the other hand, the Allies of the
Entente have the power to divide
the annual gold production of the
world according to the power they
may possess by ownership of produc-
ing mines. favorable trade balance
or their credit
In Germany and Austrii Hungary
immense emissions of paper currency
have been made in connection with
war financing. But the Dual Mon
archy may he dismissed from consld-
Grafton. At best its gold standard
was precarious one, maintained
practically by artificial exchange
operations. The Hapsburg empire is
now financial drain on Germany.
SO, to deal solely with the German
ReiChsbank, II can collect to its cof-
fers no more than the domestic stock
of gold In Germany, II every coin
should he successfully commandeered
from private and institutional pos
sessions. There Is no recent estimate
from the United States Mint. an un-
doubted authority, but Its data AZ of
December 81. 1912, gave $3.50, 1000 900
as the amount Of gold in circulation
In Germany outside Of bank and
treasury holdings; the circulation in
Austria Hungary was less than $50
5000 The former amount has been
increased by imports in excess of eN-
ports, though English financial au-
thorities contend emphatiCally that
the rates Of exchange have not war
ranted these net imports; that the
shipments to Germany from London
in the last two years have not been
made in accordance with economic
laws" But Germany's circulation. plus
these import gains, has been reduced
by whatever additions have been made
to the stock of the Reichsbank. In
one year these were, in round figures
800, O0O,O The London Statist
hardly comedies $3.50. 900 900 as Ger
many's present circulation of gold.
But whatever he the true amount. il
is the maximum limit to which the
Imperial Bank can expand It's gold
holdings.
What are the gold resources of the
Allies? Accepting the Mint statistics
for want of better ones, the gold in
circulation in Great Britain is about
1896. 900 900, in France, $5Sl, 600 600:
in Russia, 1854 900 900 total OF
S1,27l 100000. The gold circulitirG in
Australasia, South Africa and Canada
Is comparatively unimportdnt. per-
haps s2j.00O.0OO. The grand total
may be about $4,000 900 or
double the supply Of Germany ex-
traneous to the banks There are no
means Of estimating with any degree
of accuracy the boards of India, yet
as a last resort, II they could be eX-
plotted, they would cast tremendous
weight in the scale,
But the British Empire has fabu-
lous sum to draw upon from each
years gold output Of It's colonies. I'm
round figures, the annual production
of all British territory Is:
South Africa. INSTANTANEOUS 5000 600 600