Evening star., 1940-06-20
French Gold Expecte
To Stay Regardless
OF Peace Terms
Huge Funds to Come
Under Presidential
freezing Order
BY PAUL d. GESNER,

NEW YORK, June 20.-Around
$500, 10000 Of French earmarked
gold heaped In bank vaults in this
country is likely to stay here, re-
gardless Of what demands may be
put on France by Germany, bankers
said today.
If any German attempt should be
made, either direct Of indirect, to
effect withdrawal of French gold
from the United States for German
account, the earmarked gold, along
with other French funds, will come
under the Presidents order freezing
French balances here.
II German demand should be
made on France for surrender Of
the gold en- bloc, the Federal Reserve
bank here probably would impound
the metal along with other French
balances as an Offset to American
investments In France. The gold
would presumably remain impound-
ed until the fate of American prop
critics in German n-dominated areas
was known, and adjustments for war
damage or seizure of American
owned plants effected.
u. s. Has "Ace in Hole"
If other methods Of retaining the
French gold here failed, the United
States Government has a final ace
In the hole" to keep the metal from
falling into the hands of a French
conqueror The French gold might
be seized by the United States Gov
eminent as part payment of the
French war debt owed from the last
World War.
Altogether, there is around 81 $780,
100000 of foreign earmarked gold
reposins in the vaults of the United
States Federal Reserve banks.
While the Government does not
make public the holdings Of ear
marked metal by countries, unofn-
cial Washington sources have put
Frances share at about $500, 900 900.
OF the remaining $l,l50, ,O0O, 900,
around $500, 900 900 to $3.50, ,00O, 900 Is
believed to be metal earmarked for
the account Of Great Britain, With
the remainder split up among many
small countries, including Switzer-
land and German-dominated Hol-
land and Belgium.
In the event the war should go
against Great Britain and a con-
queror's demands for her gold
should develop, a procedure of keep
ing the metal here similar to that
which may be followed in the case
Of France is likely.
Britain, like France, has huge
debts from the last World War on
our books. against which the metal
might be credited by prior lien.
Meantime, while the next phase
Of the fighting is being decided,
bankers here expect no letup in
the now Of gold to these shores from
Great Britain. Despite intensity of
the war on the sea, empire gunboats
have kept necessitous shipping lanes
open, and on one occasion since
May 10. when the German invasion
Of France began, over $500 600 900
OF the metal arrived here in two
days.
Flow to Continue.
Bankers think there Is still around
$4,000, ,000, 900 In gold in Britain and
Canada, and that ships will continue
to ferry metal reserves here to cover
payments on overwhelming pur-
chases Of airplanes and other sup
plies.
II Britain sends all her remaining
precious metal here, 1t is possible
United States gold stocks, now at the
record figure Of almost $40, ,0O0, ,O00,-
600 may rise In excess of $25, ,000, ,00o,-
GOO. A gold store Of this size would
represent close to 95 per cent of all
known monetary gold existing in the
world.
The United States Government is
open to suggestions Of useful pur-
poses to which its rising store of gold
may be put. At the present time,
the United States Treasury keeps
the bulk of it buried In vaults like
the huge one out at Fort Knox,
KY.