Nogales international., 1936-08-22

about to start on it's way from the
vaults of the Treasury and OF the
Federal Reserve banks to it's secure
hiding place in the great new gold
vault which has been constructed
at Fort Knox, Kentucky.
The problem of transportation has
given the Treasury considerable
concern. If this 5000 tons of gold
were to be shipped in ordinary
freight cars of the standard ca
pacity of 80 tons, it would make a
train Of 300 cars
That isn't cafe enough, however,
so specially des gned armored
freight cars have been provided.
These will be coupled into trains
filled with armed guards, and it is
expected that more than SO such
trains will be required to move the
nations treasure to it's home.
Reason for New Vaults
There are two reasons why the
gold reserve is being stored in Ken
tucky. One reason is that the gold
storage VOLTS in the Treasury at
Washington and in the Federal Re-
serve banks ate overcrowde1. The
most impo; .art reason, however, is
that this is a measure ,; military
preparedness.
Washington and New York, mill
tary experts believe, are too exposed
to attack from a foreign power ia
case Of war. While the chances are
greatly against any successful raid
Upon the Atlantic and Pacific
coasts yet that IS possibility, and
for years the military and naval
tauthorities have been urging the
concentration of gold and of basic
industries in the Mississippi Valley,
between the Alleghenies and the
Rockies to make them more secure
in time of war.
Whether the United States can
avoid being dragged into another
general European war is hotly de-
bated question. That Europe will be
at war within two or three years,
even although the Spanish situa-
tion may not be the immediate pre-
cipitant, is now generally believed
here. The hard-boiled and some
what cynical observers of long ex-
perience feel certain that whatever
our present intentions, America cam
not help be ng involved if the ex-
pected war should drag on for q
year Or two.
War and Currency
There is pretty general agree
ment that one effect of war in
Europe would be worldwide cur
rency initiation Indeed, the interna-
tional armament race has already
resulted in greatly increasing the
demand, and consequently the price,
of large list of commodities re-
quired by armament makers. Indus
trial production and consumption OF
goods is rising steadily.
Nearly all European nations are
financing their deficits by initiation
of bank credits. Thus all OF the
worlds moneys have a lower pur-
chasing power, measured by the
gold standard, than they have had
at any time since the great 1nrla-
ton of the German mark IN l92o-
81.
While the neutrality laws passed
by Congress last year are an effort
to prevent American bankers from
financing a foreign war, the latest
reports indicate that there are more
than $6,O0O0OO,OOO of foreign money
invested in American securities,
which the governments of the varl-
GUS countries involved could com
mendeer and cnn-c~f i-@+0 dOlla"e
thus enablino them t. purchase war
supplies here in our OWL money.
Anything like a United States
government loan to a fore. gn ma
i'm for war purposes is prohibited
under the Johnson Act. to any ma
ton which has not settled it's obli-
cations 10 the United States. 1t Is
anticipated here that the lmpend-
ing war situation may result IN
offers from some of the larger
European nations to settle their
debts remaining from the last war
on some compromise basis. No serl-
Gus move in that direction has been
made, however.