Omaha daily bee., 1921-05-15
America Holds
Sc Per Cent of
Gold In World
Banking Authority Says if U.
S. Comes Into Possession Of
All Yellow Metal, Inter.
national Bankruptcy
Will Follow.
By HOLLAND.

... BY HOLLAND.
Gold continues to flow in currents
OF amazing magnitude from other
parts of the world to the United
States. This accumulation of gold
causes some discussion and perhaps
a little apprehension. Some have
thought that it would be possible to
employ gold in the payment of the
entire trade balances and debts. But
the best opinion seems to be that
even if it we're possible to do this the
policy would be harmful.
Some attempt has been made to
: obtain a fairly accurate estimate OF
the amount of gold available for
money which is held in all the coun-
tries of the world or was held at the
close of 1920. There is agreement
upon the figures which represent the
estimate of the total amount of gold
held by the principal countries of the
world, including the, United States.
The estimate is that the aggregate
amount is $7,600,000,000. OF this
amount the United States held at
the beginning of the present year
$2,76l 100000. Were world condi-
tions normal. SO great a holding as
this by one country would throw the
international financial situation out
of gear.
Would not IIquidate Balance.
II this estimate be correct then all
the other nations held at the beginning
OF the present year a little over $4,S00,
900 900 In gold. II all this gold was used it
would not liauidate the trade balance
one-haf OF the debt which the allies owe
10 the United States and not quite one
third of the total debt which includes
interest and trade balance. An estimate
of this kind clearly demonstrates that 1t
Is impracticable, even impossible, that gold
be used in sauaring UP accounts with the
United States
Ten years ago the gold mines Of the
$3.50, 600, 10000 of new gold.
But after the European war began a
siserease in production "" was noticed. n
was yielded by the mine. Our own pro-
ducton has fallen Oft The experts say
there Is gold In plenty In our mines. but
ne cost Of bringing Il to the assay office
Yet, Notwithstanding the falling off in
tha production from the gold mines of
the world, our own stock In gid has
Is luCTeaSeu IL luS lHllUW OIL
gold continues for some months our own
holdings Of II will be much in excess
OF 81, 1000 o0e. .oeo.
ss pSpns'en sas snso Of this the uns
Try holds ss per cent Of the worlds gold.
This statement alone is sufficient to show
why the other countries Of the world
with few exceptions are no longer upon
q gold basic.
President Poor's Opinion.
iuyu -
is one Of the leading banking authorities
ef New York. spoke before the general
forum OF the American Institute of Bank
that Il the United States came into pos
session OF substantially all of the money
gold In the world then there. would be
bankruptcy. Furthermore 1t
is not impossible that the continued In
cresses in our supply OF gold will cause
gold TO become internationally demone-
tixed snd IL that should happen it would
compel the other nations Of the world
to make choice of a new measure Of
value and exchange.
These statistics seem to be sufficient
TO show that the United States cannot
liquidate OF trade balances. Sometimes
the suggestion has been made that we
rely for the payment of our balances upon
very great ns,h, inSrssse IN t1e impos popd ha
relied upon without detriment to our % own
trade then an excess of at least $1,000
600. 900 OF imports over exports each year
would be necessary and this must be
continued for seven years. This is the
estimate which was made by Mr.. Poor.
If then the debts and the trade bal
ances cannot be liquidated either by the
use Of gold or by very great success of
imports over exports the question arises, |
is there any way by which we can pre-
serve our economic position, protect the
and improve them and at the same time
make our domestic markets proof against |
imports7
There Is Remedy.
: Ma Poor has put in words what many
Of our leading men Of finance and bank |
declared to be the reasonable and satis- |
factory method of protecting ourselves
and securing the payment OF indebtedness
This can be done. he asserts, BY the con. on
foreign nations which are now held by
our government into the securities of the |
commercial and industrial en-
terprises OF foreign peoples. these Sc
curities to be. held as an investment by |
our own people.
According to the treasury report. the |
unpaid interest upon the promissoryy ~ notes ot
IL this interest be included In the aggre- |
gate Indebtedness Of other nations which |
is represented by demand notes held by
from $4,000, oeO 900. Mr. Poor made one
statement which without explanation
would cause establishment. For he said
that $1,000, 600 IN interest had been
paid UP to May Is, 1919. 1t has been
the common belief that no interest has
been paid by tho foreigners. II was paid
by the proceeds of loans made by the
Ths business man who add
ed to his banking Indebtedness the in
terest which was constantly accumulat- /
ing would be regarded as on the high road
10 bankruptcy. AS soon as the allied gov
ernments begin payments on account OF in
terest their own internal taxes will be
increased while our internal taxes should
decrease. The effect of this would be
favorable In International trade. exchange
rates and private credit Meanwhile the
accumulation OF gold increases. No one
can tell exactly where this gold comes
from. No one ventures to predict how long
these mighty currents of gold flowing
across the Atlantic, to the United States
viii continue. These facts are sufficient
to show the magnitude of the financing
and financial issues which must be ad-
justed as soon as possible
Bonds.
The following quotations are furnished
q D1kA rr.. hxS{1 1urer