Omaha daily bee., 1920-03-12
Gold Exports and Imports
From the New York Times.
The report that England and France, ali

Inc report tnat England ana france, alone
or together, will send us in gold any consider.
soon to mature here is not an intelligent anticpa-
ton of events and should not be encouraged by
Us. When their bank reserves are about half
of ours, which are thought too small, they need
the gold more than we, and we need to support
their commercial strength more than we do to
support Germany's. There is not the least doubt
that they will make liberal settlement with
their creditors and they could send gold enough
to supply base of credit for that operation
without sending sums mentioned which exceed
the worlds free gold, existing or to be produced
in the interval. The addition of scores OF mil
lions of gold to our sufficient present supply,
not to mention $200,0O0,0W more or less, is not
altogether desirable at time when our bankers
are struggling against imitation.
1t was announced recently that $2l 100000
more gold had been engaged for shipment to
South America, chiefly to Argentina. This year
the gold export movement has cost the federal
reserve Sl80,000000 and reduced its ratio OF re-
serve some six points, to the point OF
uneasiness. Last week the local federal re-
serves were depleted by the loss of gold to
Argentina to an amount smaller than that gong
tomorrow by half and were restored by the ex-
pedient of counting in them, treasury silver de-
posted and earmarked for export. The January
figures of foreign trade show that in seven
months we have exported $3l9 100000 gold. That
is about one-half our debt on trade movement in
total Of all trade. But the $4,G00,000,000 brought
us in the same seven months only $38,000,OO0
gold. If it were only matter between South
America and United States, our direct balances
might be settled in that manner for long time.
But what is called the depreciation in sterling,
the United States and the world. England could
pay its trade debt to us alone in gold as we'll as
we could pay South America in specie But
there is always the danger through the triangu-
lar operation that England can pay US in paper
which we would have to take instead of gold,
pay her trade if she could secure our obi
cations due to others than England.
1t will be remembered that New York
learned by bitter experience that, if New York
banks refused to send currency to the Interior
the interior would make no remittances as
United States-has now stopped remitting in the
only international currency, and consequently
there is a worldwide construction of the ex-
changes of both goods and currency. Trade can
not be done one-sidedly, and exchanges must
be balanced to the lowest terms compatible with
the satisfaction Of necessities Thus It comes
about that trade is restricted just at the time
when the expansion of trade is the remedy Tex
hbited' or "ndcated"-as the financial doctors
might say.
The most direct application of these ideas
is that it is not possible for the United States
permanently to remit gold if the rest of the
world sustains embargoes on gold. The United
States will exchange either goods or gold with
no limit but the sky, but it cannot sustain es-
ports of either goods or gold unless there is
freedom of movement for both. 1t is idle to
apply normal rules to an abnormal situation.
The United States IS prepared for the rigor
of the game, according to the rules, but the
rules must apply to all, not to the United States
alone. Yet those who break the rules are find
ing the United States responsible for the situa-
ton in which the United States comes nearest
to trading on settled principles. 1t is the same
with goods as with gold Our foreign friends,
who are so desirous that we should appreciate
the discomforts of their situation, not only
check their imports from US, but demand that
we shall finance their buyers of our goods. This
is said sympatheticaly, and with recognition
that they are doing their best to balance their
debts with either goods.or gold The fact re-
mains that 1t is against good business prac-
tice for the seller to finance the buyer. The
buyer is supposed to finance himself with the
assistance of his own hanks But foreign buyers
are asking that we shall finance both sides OF
the business between the United States and the
world