New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-13

discrimination in favor of sovereigns
is due to their greater acceptability In
Spain.
The premium on the Spanish pesetas
and the heavy costs incidental to the
shipment of gold to Spain have caused
American importers of merchandise
from Spain considerable difficulty and
expense in making remittance. In one
case an American importer OF ollie
oil appealed to the Washington au-
thorities in an effort to have steps
taken toward regulating the Spanish
exchange. Nothing has come from this
however, and the situation remains un'
altered.
The Spanish View
Information received from Spain in
dicates that Spanish business men are
deeply concerned about the instability
Of the exchange, which has placed the
sterling pound and the American dol
lar at a substantial discount in Spain
and caused a steady flow Of gold into
the vaults Of the Bank of Spain. While
bankers and importers are rejoicing
about such a situation, exporters and
other business men adversely affected
are urging the government to take
steps to give stability to the exchange
and rehabilitate the American dollar.
The statement Of the Bank OF Spain
shows that at the beginning Of July
the stock of gold and silver amounted
to nearly 100000 pesetas (S3OO,-
OO0, 900 in normal tines. The stock
has increased about 800 ,000,0 900 pesetas
(s60,0O0,000) in the last six months.
Bankers expect the stock to reach by
the end of the year the amount OF
1000 100000 pesetas (s4OO,0oo,ooo)::
II this proves true the cash reserve Oh
the bank will have increased about lOo
per cent during the war.
Favorable for Spectators
Bankers and spectators consider
this situation very favorable. Inc
manager of bank in Madrid said re-
Gently that the Allies are taking out
of Spain even old rusty nails; but since
they paid everything in gold and at
good price, and since Spanish produc-
ton has been increased, the SITUATION
could not be more favorable tor the
country. =,
"The import of gold"-he said
charms none. In the first place, the
country is benefited because its circu,
lation has a larger and more SOLID
guarantee; the Bank of Spain is bene-
flied because 1t buys gold at discount;
the bankers. who get commission on the
imports of gold, are also winners; ana
this profit is obtained at the expense
of countries which not long ago placed
our peseta at a heavy discount
Not everybody, however, looks at the
situation from the same point of view
Spanish exporters and merchants are
disturbed and fear it will greatly han
dicap foreign trade. The association
known as "Circle of the Spanish-Ameri'
can Mercantile Union" addressed q
note TO the Secretary Of Finance stat,
ing that "the continued and persistent
flow of gold into Spain has not only
placed its monetary value on the same
level as silver, but has also produced
a depreciation because of the instablll'
w in its value as measured in foreign
money, and also the fact that foreign
gold does not circulate, thus becoming
a merchandise, the price OF which IL
arbitrarily fixed by the Bank Of Spain
at would be to our advantage 70
solve this problem, which the American
importers cannot understand, as they
fail to see how their money, considered
heretofore as having a fixed value, can
be deprecated, leaving international
trade without a standard Of exchange.
"Spain is greatly interested in main
tanning and increasing its exports 70
America, since the imports Of European
nations are dependent mainly upon the
needs created by the war, and 1T is ADJ
solutely necessary to adopt measures
intended to regulate the value OF for
eign money in order to prevent injury
to international Spanish trade"
Large Reserve
The Circle praises the attitude
adopted by the Bank of Spain in increas-
ing its gold reserve until 1t Is twice
as large as the reserve of silver. But,
the note says, "the Bank OF Spain
has adopted policy that may curtall
the importation of gold. The bank has
decided to buy sterling pounds and
dollars at price DeloW par AT we
present time it is paying only 24.75
pesetas per sterling pound and ABS per
dollar. Since foreign money is not a
legal tender in Spain, it becomes kind
OF merchandise, and the Bank of Spain
arbitrarily fixes its commercial price
at a profitable discount"
The Circle claims that such an atti-
tude on the part of the Bank Of Spain
may compel the United States to forbid
the export of gold, causing a greater
and more serious disturbance in the ex-
change market.
The Mercantile Circle urges the gov
eminent to authorize the Bank of Spain
to accept in all of its Offices the ster-
ling pound and the American dollar, at
par value of % and 5 respectively, is
suing notes for the amount of foreign
gold held in reserve. Aad In order TO
prevent an imitation in the circulation
of banknotes the government is urged
to accept foreign gold coins as legal
tender or to have them minted and
turned into Spanish pieces.
, WY r.