The evening herald. [volume] (Albuquerque, New Mexico) 1914-1922, 1915-06-22
ANCHORS or FORTUNE.

about by the war. First-the United
states Is the one market where the
great bulk Of extra THINKS needed by
tbs hciiigerent nations can be OBJ
tained. The purchase Of these things
in vast quantities., constantly ncreas-
ms In the last ten months. has grad
uaIly reduced tho purchasers re-
sources In things with which they
might be able to pay. These resour-
ces consist. roughly, In commodities
which we want. securities which we
viii take. and gold. The amount Of
commodities Is limited. both by rea-
son OF our NJ economy in imports
and BY the restrictions OF war on for
cign manufacturing. OF securities we
have taken a very large amount OF
those that their owners were willing
70 qart with up 10 date. n has come
down 20 a question Of gold. and this.
20 the extent Of over 10 millions. has
been paid 70 us on balance this year.
But neither the allies nor Germany
can spare gold. and the import Of this
must DC fast approaching restriction
and stoppage. This state Of things
has brought about a decline In the
rates Of foreign exchange. hat Is. the
dollar here. OF gold into which il u
exchangeable, has become more valp-
.ahla th., ap.F.. ~. f.r.r.. ...t..
10 tine extent OF a greater or less
premium. A premium on the dollar
means. Of course. a discount on for
eign currency. The rate OF this dis
count on currency or premium On
gold. has been considerable for some
time In Germany. Italy n Russia.
and to a less extent In France.
Hut England. until last week. has
been able 10 maintain nearer par thar
others. on Monday Of last week,
however exchange on London sank
10 the lowest record IN forty years
and went still lower on Tuesday.
when II touched 4.7sA. This means
70 discount of 2 per cent on British
currency. as compared with gold. At
least in this market.
This whole situation II. Of course.
brought about By h enormous pur-
chases made "a this country and
shipped abroad. and to the moral ef-
feet OF huge orders for war munitions
contracted FOR. but not yet delivered.
and estimated 10 amount TO $1,000
O0O, 600, with no cessation in sight.
The question H.. how are these
enormous debts 60 be liquidated as
they grow. The surplus supply OF
gold IL absolutely insufficient. For
tunstely there Is M other kind OF
payment which Is acceptable and
which IL, in fact. rs good aF gold TO
Us, and that Is our own securities.
These are still held abroad to the
extent Of some thousands Of millions,
Notwithstanding the huge amounts
which We have already taken over.
But these securities are held by In
dividuals and private concerns. n
they weer owned ~ the variou, gov
crnments the problem you'd hc easy.
they were owned by n various gov
pledged as collateral ana borrowed
against. II IS stated by New york
financial Journals that an attempt is
already being made 10 gather these
IA for this latter purpose.
In France "a loan of Sis.00o,o0o
Pennsylvania sA per cent bonds was
placed in 1906. and In 1910 SIS .oOo.-
900 81. Paul a. were taken there.
The greater amount ~ these two is-
sues are presumably sim held there.
az they were issued In francs and
coupons payable only In London and
Paris. u b. reported tina the French
government IL offering the eqaiva'
lent Of % for the Pennsyvanias and
80 FOR the 81. Pauls. with the object
Of gathering ia as many a. possible
90 be used az collateral Tor a loan
mere. American bankers would glad
ly negotiate such q loan,
England Also may move In this a.
rection. In Parliament last week
according 10 the news dispatchof, one
member OF the house referred Co o
movement OF the chancellor lookini
10 support Of the exchanges by issue
OF a loan in the United statos. and
another suggested the authorization
Of a board 10 undertake the purchase
OF American securities in exchange
for government scrip. the securities
to be used over here for payment
either by sale or against borrowing.
The difficulty. Of course. Is 20 In
duce holders Of American securities
abroad "a part with them. A. de-
]struction proceeds. these issues be-
come more and more desirable ~ an
chOrs OF Fortune.