Gold Exports

The large exports of gold recently made from New York in a single day ran to $12,000,000. It has been taken by some as marking the end of the danger of "gold inflation" in America. The exports of American gold were mainly occasioned by large foreign loans recently floated in this country. J. P. Morgan & Co., for example, in one day sent $5,000,000 in gold coin to the German Reichsbank, on account of the $110,000,000 German loan sold here this fall. This single gold shipment exceeds all exports of gold to Germany from New York since 1914.

Thus far, only an infinitesimal part of America's huge gold hoard has been drawn abroad. It is by no means certain that the movement will long continue ; even if it should, it would take a long time to drain away the huge gold surplus now in the country.

Foreign loans may lead to temporary gold exports, but interest and sinking fund payments later tend to draw even more gold back to our shores. Not until the trade balances are on a very different basis than at present, is it likely that considerable American gold exports will continue.