New-York tribune., 1919-06-10
Embargo on Gold
Exports Is Lifted
By Reserve Board
All Restrictions Removed on
Metal OH Recommends.
ton of President Wilson:
Bankers Approve Action

WASHINGTON, June 9.-To hasten
return to normal economic conditions
and restore the American dollar to a
parity in several foreign countries, the
control exercised by the government
over transactions in foreign exchange
and the expectation of gold coin, bull
ion and currency was terminated to-
day by President Wilson, acting oh
recommendations of the Federal Re-
serve Board.
Exceptions made by the President
included importation or expectation of
ruble notes or exchange operations
with that part Of Russia now under
the control of the 'Bolshevik govern
ment and exchange transactions with
territories in respect of which such
transactions are at present permitted
only through the American relief ad-
ministration.
Attention also was called by the
board to the fact that termination of
! control did not authorize transactions
with enemies except so far as such
transactions may be authorized by
general and special permission granted
by the war trade board.
licenses Still Necessary
Licenses to export coin, bullion or
currency will be required, but will be
granted "freely" by the war trade
board irrespective of destination or
amount" the boards statement said.
Applications must. however, continue
to be made to the Federal Reserve
Board until such time as the President
shall by proclamation formally bring
to an end the present control, insti-
tuted when the United States entered
the war.
Removal of the embargo on exporta-
tion of gold will enable foreign nations
to obtain metal needed to strengthen
their economic position, said the board,
adding that anything that tends to
restore the economic power of for
eign countries will make secure pros
pcrity in this country.
Government credits to the Allies
virtually are exhausted, the announce
ment said. SO that flow of gold to
this country may be expected soon,
tending to advance existing high
high prices. This will be offset, how
ever, by the outward movement of
gold. very considerable movement
abroad could be made without danger.
it was said, because of the great re-
serves accumulated since 1914, amount
ing to one-third of the worlds sup
ply.
Will Restore Parity of Dollar
One important effect expected is the
restoration of the American dollar to
parity in exchange with South Amcri-
can countries, particularly Colombia
and Venezuela, where it has been at
a discount of 20 per cent.
Restoration of a free market for
gold, with the removal of practically
all of the war time restrictions upon
the inflow and outflow of gold from the
United States, occasoned great salts
faction in local banking circles ycstcr-
day. Bankers hailed the move on the
part of the Treasury in lifting the en-
bargo on gold shipments as one of the
most important steps toward the re-
Mobilization of international finance
that has yet been taken.
Will Lose Little Gold
The opinion was expressed that the
restoration of a free gold market will
not result in any important export
movement of the metal, since the
United States occupies the position of
a creditor nation and the international
trade balance is running strongly in
our favor.
Bankers said that Japan might with
draw substantial amounts of gold from
the United States, but the extent of |
that movement would probably not
be large and would likely be offset by
the inflow of gold from other direc-
tions.
The head of leading international
banking house indicated a belief that
in the long run the stock of gold in the
United States will increase, as, in his
opinion, exports will be less than the
total of imports. Great Britain re-
sumed the shipment of metal to this
country last week after a lapse of
more than two years, when $4,000 900
came in from Canada. More is ex-
pected from that quarter. |
Will Widen Gold Points
The gold points, the marks IN the
scale of foreign exchange fluctuations
at which it is more profitable to ship
geld than to buy exchange, will be
wider apart henccforth than in pre-
wal years, bankers pointed out.
Higher freight and insurance costs
constitute the reasons. Other factors
which bankers consider in normal
times in deciding whether it is profit
able to import or export gold are
charges for packing, carting and
freight If the sum of all these
charges is less than the differential
in exchange rates between two coun-
tries, the banker can gain profit by
the metal.
Asked why Canada was exporting
gold into the United States at this
time, Frank A. Vanderlp said: "To
settle British balances" American
credits to Great Britain are practi-
Gully exhausted. France is enabled to
settle her balances for the present by
the expenditures of the American and
british governments in France for
their respective forces. Bankers de-
clare that new credits will have to be
issued as soon as these expenditures