The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-06-24
Shipping Out Our Gold.

Shipping Out Our Gold.
In the whole world we have become
the paramount creditor nation.
Since the war began nearly Ave
years ago this country has lent abroad
net sum of ten billions Of dollars.
This country has bought back from
foreigners American securities to an
amount estimated all the way up to
another ten billions Of dollars.
This country, Furthermore, is in
creasing the worlds debt to us every
hour with q foreign trade balance
now running In our favor at the ter
rife rate Of very nearly four billions
of dollars a year.
| Yet-and the news startles Ameri-
cans--we are shipping out gold. What
does 1t mean, they ask, that II every
body owes us we are sending $1S,000,-
| 600 In gold to SoHtff America and may
send there, right on its heels, another
$10,OOO,0O0? How can 1t be, as finan-
cial rumor says, that we may ship to
Japan twice, perhaps four times as
much--a round $1OO,OO0,OO02
Well, for one thing, everybody
doesn't owe us. The world as a whole
does; the world as a whole Is up to
Its neck in debt to us; but here and
there, like a speck in the wide sky,
Is part of the world We owe.
| In South American countries we
have been making more trade pur-
chases than sales. Examples are the
Argentine, Chile and Brazil. The
same thing is true of the Far East,
where the conspicuous example is
Japan. Besides this trade score we
have been investing in foreign coun-
tries. We have been buying their Sc
curlties. Within their boundaries we
have been building American rail-
roads, developing mines and setting
up mills and factories. So we pay.
For another thing, nation cannot
be creditor Of the world without being
banker to the world. One country
4
goods-a trade credit. Another Dor
rows gold. Still another gets paid by
the creditor-banker in behalf of a
third which owes the first but has a
balance with the banker.
A banker to the world, like a banker
to a community, stands prepared to
receive or to pay. to collect or to
lend. A banker to the world, like q
banker to a community, must be ready
to honor good drafts in favor Of any
body anywhere. So we bank with
gold and we trade with gold. We buy
gold, we lend gold, we sell gold.
AS for our gold supply--if we. are
to be banker to the wOrld-it Is for
just such use as we are now making
of it and as we shall make of it more
and more. We have It In prodigious
store. We have the bulk of t he
worlds banking supply. We shall
have 1t for long time.
Our stock of gold, as money, Is some
three billions Of dollars. In the chief
countries Of the world there isn't a
great deal more. The Bank of France
counts in round numbers a billion
dollars-but some of 1t, under the war
arrangement, may still be In London.
The Bank of England holdings are
about half a billion--but pretty
penny of 1t Is in Ottawa, right next
door to us. When we want 1t we can
get 1t. The Bank Of Germany records
some $500, 200, 00O--but It is too fluid
to stay in Its own needy vaults from
day to day.
After those great holdings Of Eu-
rope there Is relatively little anywhere
else. The holdings of those three are
not much more than half of ours
and of doubtful local stability at that
Five years ago they were the bankers
for Europe, Asia, Australasia, South
Africa and South America. They
were the bankers, pretty much, for
even our own United States. All that
to-day Is changed. Those countries
and continents alike look to us.
Out of our three billions and more
Of gold--while our debtors continue
to pay and pay us In gold as they can
or must--we shall spare a pinch OF
twenty-five millions to South America,
Of fifty or ashundred millions to the
Far East, and never turn a hair. We
can-we shalI--follow that up, as oc
caslon demands, with hundreds OF
millions. It is our business. Our
single Is out--bankers TO the world.