New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-01-27
GOLD OF ALLIES
NOT ALL USED
FOR CREDITS
Sir Edward Holden Com
plains of Federal Reserve
Attitude on Loan

London, Jan. 26.-Spcsking at the an
nual meeting Of the London City and
Midland Bank to-day, Sir Edward Hol-
den, managing director of the bank,
said that Of e232 900, 900 of gold which
rad flowed into America IN TO the end
Of 1916 about e212 100000 represented
the amount contributed by the Entente
Allies 20 form the basis Of loans.
OF the total foreign loans of America
since the beginning of the war, aggre-
eating about sl6O,cOO.OOO, he said,
$4,000, 600 was borrowed by England
and her allies. The amount of gold re-
qured for reserve on this basis, he
added, would be only $50 geo, and
therefore s143,0OO,0OO of the Allies
gold had been used for some other pur-
pose, and it would appear that $4,000
900 was locked up under the Federal
Reserve system. Continuing, he said:
after the Allies had 50 handsomely
contributed to the gold reserve of the
United States, thus facilitating the ex-
portation of American commodities to
the extent OF Gf,913,OO0,000 between
July. 1914, and November 80, 1915, IL
seems difficult to understand why the
Federal Reserve Board should have en-
deavored to place difficulties in the way
of American bankers creating further
loans, and particularly when they could
have had collateral security for new
loans"
Hopes for End OF Difficulty
Sir Edward expressed hope that new
agency arrangements with the Bank Of
England and with France might be the
means of clearing up any difficulties
which might have arisen in the past,
and that the Entente Allies, after the
great exertions they had put forth to
increase the reserves OF gold in
America, would be enabled TO take adj
vantage Of the increased loan super
structure. lie also gave utterance to the
hope that it also would be mutually
beneficial in continuing to support
British exchange in America.
The speech OF Sir Edward was a re-
view Of tho entire financial position Of
Great Britain and her Allies before and
since the war. with comparisons Of the
effect Of the war. financially in Great
Britain and Germany.
He alluded TO the great economic
phenomena which was 10 be observed
in both Great Britain aud Germany; Of
countries overlooking with money and
credit, of the large profits that are
being made owing greatly TO increased
prices Of commodities and of the work
ing classes earning larger wages than
ever before, some of them spending
their money freely and others saving.
Regarding the financial position Of
Germany, Sir Edward pointed out how
Germany had adopted every means to
maintain the gold reserve of the
Reichsbsnk at the necessary one third
Of the note issue. Germany, he said,
had issued notes to the extent of $780,
100000 and Great Britain to the extent
Of e36S,OOO,OOO. The gold in the
Reichsbank now was 5000 900, which
gave Germany a percentage Of 1871,
while Great Britain had sS1 900 900
gold, giving her percentage of %. Il
looked, said Sir Edward, as though
Great Britain were keeping up her end
pretty we'll
Entitled TO Borrow More
On the basis OF the 10 per cent re-
serve required by the American bank
ing system, Sir Edward argued that the
Entente Allies, by the amount of gold
they had sent to the United States dur
ing the war. were entitled to loan up
to sl,400,0O0,0OO, but that they had re-
ceived under f430,O0O,0OO.
Without expressing an opinion as to
the propriety Of German and Austrian
banks having branches in England after
the war, Sir Edward said he thought
1t would not be wise to exclude for
eign banks. He considered that the