The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-12-27
FINANCES OF THE NATIONS.
Rejoinder by DR.. Oberfohren From the
Pro. German Point Of View.

RejOlnder by DR.. O~berfOhren from INC
Pro. German Point Of View.
To the EDITOR OF HI SUN--Sr:
suppose ''veritas,' whose letter APP
peared in the columns OF THE L or
December II, does not expect an
answer to his letter. and indeed ne
makes II impossible to enter into a
controversy with him, since he adopts
a tone OF invective and insult In when
/ do not feel inclined to follow him
HIS personal remarks against me / Will
leave aside altogether. n II l mention
his letter at all II is in defence OF Dr.
Helnerich. with whom "veritas" claims
personal acquaintance. although he calls
him president Of the Reichsbank. a posi-
ton which DIR. Helfferich neither holds
nor ever held. His personal acquain-
lance and feigned esteem do not pre-
vent "veritas' from branding DR..
Helfferich a liar by blandly stating
that he makes Statements that he
KNOWS are not true" venture to say
that 'veritas" il as well acquainted
with the subject matter Of DR..
Heifferich's words as he is will his
position. However that may be. though
I do not know DR.. Helfferich personally.
I do know his books and his record as
a private and public official. and l
protest against such baseless insinua-
lions against an apseh. oun.r.l"a.
man who is of universally acknowledged
rectitude.
In THE Sun OF December % Mr..
James s.. II. Umsted reiterates most oil
the statements which l have questioned
in my last letter.
MI. Cmsted Is his.aheh ~
sumes my Ignorance OF the eNis.eIoe VI
the Stdftsf and the Economtst. SHINY
accepted ms igures because NJ ,ne III
meht OF Wri'ihs ! "au no"c vi '
Engiish puoncat'ohs al manu-.
As to the Facts. the gold Tor 'reasuty
notes Is stil DeiieEeo 10 pe a 'e"u.'
only py those VINO 90 not troupie 'neIi-
selves about an explanation OF 'ne sun
den increase OF goid hoidihss ny 'ne
Bank or England IN the nrst moh,is OF
the war. Besides the goid reserve D.
the institutions ! mentioned III my ias.
letter every avaiiaoie par'lcle OF soiu
held In the public coners OF the uhiteu
Kingdom has been transferred 10 '"e
vaults OF the Bank OF England.
am well aware That a separate ac-
count Is being Kept or the currency
notes. In fact THIS mas nothing 10 oo
with the Bank OF England. Deionsihs
as II does TO the province or the treas
ury. But the figures In the currency
notes account do not represent gold heid
beside mat which is accounted Tor DIV me
Bank or England. n gold set aslue
FOR the redemption OF currency notes
is delivered TO the safe Keeping OF the
Bank or England and thus fgures IN
its gold stock. That the same sum hg-
ures In two distinct accounts Is per-
fectly Justi1able and n constant prac-
tice In Europe. where always
consider their deposits in the central
institution as identical with cash in
hand. But II Is not 5usti1able to pile
these sums one upon the other. ] do not
doubt that the account or the institu-
tions whose gold treasure has been in
corporated In the Bank OF England are
m good order. but their stock has been
merged with that legitimately belong
ing to the Bank of England. h fig
ures are hereby involved ts shown by
the TACT that the last account published
by the Belgian National Bank reported
ABOUT ss0.ooo,ooo IN coin and bullion.
II this sum as well az the gold hold
lngs or the other institutions were 10 lie
disgorged by the Bank OF England its
own gold holdings would be much
smaller mar ! nave inquired. But Mr..
Cnnsteu apparently prefers TO pass these
things In silence.
AS 10 the silver question, even strong
believers IN English finances will prob
ably doubt that the whole stock of
"NH ''b'
OF the Bank or England amounts TO not
more than fl62,S6'. which sum includes
even a certain amount Of gold. \
separate account or It's silver holdings
not pelng gwen the natural inference
IS that the management or the bank IL
able 10 STRAIN the KINGS English suffi-
GENTLY TO INCLUDE the holding OF silver
IN its ngures or com and bullion. Mr..
l nsted passes IN silence the question
OF the French silver cover for notes.
by putting the notes Issued by the
German war loan banks .on the same
leVel with the notes Issued by the CEN
tral banks Mr., Cmsted shows how lit
Tie ne ~ acquainted with the working
or these institutions. Whereas the CEN
tral BANKS issue their notes mainly
against discounted bills of exchange.
the principal security being the sound
ness OF the underlying commercial
transaction. the war loan banks grant
loans only against collateral their se-
curity cannot he impaired by CONNER.
cial failure. The speedy return of the
loans Is guaranteed by the strict condi-
ton Imposed upon the borrowers. and
pari passu with the decrease of the Sc
curities goes the decrease In the
amount or notes. They are only a
temporary measure designed TO relieve
the great need for currency which is
caused by the intensihcation OF Ger
many's economic life through her iso-
lation from the rest of the world. The
notes or the war loan banks will take
care OF themselves and will snee1il u