The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-02-26
GOLD OF TWO COUNTRIES.
A Criticism Of Some Financial State
ments OF DR.. Dernburg.

To THE EDITOR OF TIL SUN-Sir: In
an article in THE ScN of February II
Dr. Dernburg In his comments on the
British gold position made some re-
markable misstatements.
He says. among other things:
on July 81, 1914. German notes were
covered to the extent of SOL per cent, In
gold; England's 3S.5 per cent. on 10,
nary 30, 1915. German notes were Cos,
cred to the extent OF 35.i per cent, Eng
lands 50 per cent.
The true figures as regards England
on the dates mentioned are 149 per cent.
and pol per cent. of gold against the
Bank of England notes in Circulat on.
If DR. Dernburg includes in his calcula-
lions the f36,026, 900 currency notes
Issued by the British Treasury to meet
the demand for smaller notes han the
IS denomination issued by the Bank Of
England he must remember that on
January 20, f21 800, 900 gold was held
against these currency notes; therefore
on that date the Bank of England notes
plus currency notes We're covered by
gold to the extent of 1919 per cent. The.r
however, DR.. Dernburg must include N
his German figure the millions OF notes
issued by war banks" against which
not one cent of gold is held.
\ leading authority has made an In
teresting contrast between the position
Of the lteichsbank and tn Bank Of Eng
land In a late number OF the Economist
lie po nts out hat the only way t.
make a correct comparison Is to see
what would happen If the R~eichsbank
were to eudcavor to reduce It, not" cir
c~ulation to normal figures. which may
he taken as those Of a year ago
While on January %, 1915, the Reirhs-
banks gold holdings amounted to $40
600. 900, II had s6i0.O O0. 600 more notes
outstanding than or the same date last
year.
II the attempt were made TO revert
10 normal figures. every cent of gold
would disappear from the Rcichsbank's
Golfers and there would still he In CIR
culation 500, 900. 600 notes.
The Bank of England held on Jan
nary 81, 1914. $40. coo. 600 gold and the
note circulation was s14l. 600. 900. whil1
on January 90, 1915, the circulation
amounted to sl74,o0O. 900, against which
$3.50. 900. 600 gold was held. In order,
therefore, to reduce the present note
circulation to normal figures only s33.-
600. 900 would rave to be redeemed In
gold. II the huge surplus remaining
added TO the gold specially held against
the currency notes mentioned above
after retiring the latter. would leave
the Bank OF England n stock OF gold
amounting to SEAS 900. 200. or t35. 600.
600 above the normal.
Will Dr. Dcrnburg still maintain that
the percentage of gold covering the
notes ~ the Rank Of England has never
been lowe han NJ ~present'H
We have heard OF sermous IN the
German churches urging the melting
down % wedding rings, and one German
banker has even said every mark will
Ne squeezed until Il shireks." As n
DernburE says Germany IL practi'ally
cut on and II Is impossible for gold "a
leave the country. since there is nothing
20 be paid for. Il would he interesting
To hear from a person as wei iuformel
as he is why such efforts are Doe nc
made to have every ounce OF gold IN the
country collected In the Golfers 81 the
Reichshank. 5. g,
New YORK, February rs