The Birmingham age-herald., 1915-05-29

to buy foreign exchange so that the ex. Now if there is truth in the report tha, the house of J. P. Morgan & Co. is ir such understanding with the British treas. ury that should foreign exchange go oi seem likely to go below a certain point then the Morgan house will buy exchange upon falling market with intent to prevent the importation of gold.
 Twenty years ago. J. Pierpont Morgan stood for six months engaged in the most desperate financial struggle of his life. He had promised President Cleveland that he would see to it that the gold which he sold to the government should not be withdrawn from the treasury and then exported. In no othep way could he do this than by offering exchange on Lon don with which to meet foreign demands for American gold. We could not spare the gold then. The treasury department had been for two years in dire extremity. As fast as the Secretary of the Treasury, John G. Carlisle. brought gold into the treasury, $50,000, GOO at a time, it was with drawn through the utilization of certain features of our currency system Pres- dent Cleveland called this transaction the endless chain.
 Now the United States possesses the largest accumulation of gold within the control of any of the nations of the earth. We do not need gold, and we do not want it, and yet the foreign exchange situation might make it imperative that gold flow in large amounts into the United States where 1t is not needed and from countries which greatly need to maintain their stores of gold and to increase them if possible.
 In these two reverse conditions is con talned much of the history of the ad- vance of the United States since the senior Morgan for six months prevented the outflow of gold. The extraordinary anc suddenly developed features of the European war, of course. explain in great measure the present situation.
 MT. Vanderlip's Prediction
 It remained for Frank A. vanderlip president of the National City bank, to give authoritative acknowledgement of a condition of which leading financiers have been speaking in private, especially since the return of Henry P. Davson from Lon don and. later. the return of J. F. Nor gan. MT. Vanderlip took the opportunity which the meeting of the Pan-American
 
 this country is now entering upon period which will be additionally associated with the financing of very great loans by the united States in favor of other nations lie spoke as one having authority, since his wonderful experience since August 1 of last year has brought him in intimate personal touch with the great impulses which now make it possible for him to say that we are entering a period of great expansion of loans to other nations, especially those of South America. MT. Vanderlip doubtless, had he thought it ex- pedient or necessary, could have in con- firmation of his statement referred to re- cent transactions, daily transactions, in fact, in which his own bank has been en- gagged. Probably not day passes, cer- ta1nly not week, when heavy payments of American business and industrial man agers are not mase through drafts drawn upon funds deposited in MT. Vanderlips S bank by foreign nations.
 The amount of these funds in the aggre- gate now in American hands Is some thing stupendous. Those who are familiar With the facts say that the aggregate fig ures are so great as almost to stagger the imagination. These funds. which swell the amazing amount of money in the American banks, state and national, md the successful operation along certain lines of the federal reserve system, make 1t possible for the United States to finance, and to an enormous amount, the reed of other nations.
 The Merchant Marine comment upon the significant statement